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The insurance category is for allll the insurances! I’m talking homeowners, renters, health, car insurance, life insurance. Pretty much anything and everything health related (minus insurance!). The health category is for health related costs, like fees for annual checkups, copays for any medication, costs of any over-the-counter medication. That means gas, car tag renewals, oil changes, etc. Your car payment and any other necessary maintenance for your car go into this category. This housing category is rent, and if you own a home that means mortgage, your HOA, any PMI fees, and insurance and taxes.įor some people putting only 25% of their income into housing isn’t very realistic, but I think 25% is a good starting point, and it’s your budget after all, you can change it up to fit your own life. Utilities include your water, electricity, trash services, and gas/propane. If you’d like to lower your food spending, check out these 10 cheap meal plans. The food category includes regular groceries, and can include eating out (or this can be part of recreation or personal spending). This category also includes any investing you’d like to do. This savings category includes short-term and long-term savings, like emergency funds, sinking funds, and a house nonpayment. According to Dave Ramsey, this category is necessary to have, even if you’re in debt or have other investing/savings goals. This giving category is for things like tithing and giving to charity. Now that you know what categories are included and what percentage of your income you should be spending in each category, let’s go over each one in more detail. You can get personalized budget assistance and help with more complicated things, like negotiating with your creditors or finding out which financial assistance programs you qualify for.5 Sources Dave Ramsey’s Recommended Budget Categories Seek help: The National Foundation for Credit Counseling is a reputable nonprofit organization that offers financial planning help.This doesn’t mean you deprive yourself of these things forever it just normalizes not spending as much money on them and finding cheaper alternatives. Do a no-spend challenge: Try to eliminate spending for a month (or several) on a problem area in your budget, such as clothing or entertainment.You can ask a lender for a modified payment plan or refinance your debt into more manageable payments. Negotiate with creditors: If debt payments are pushing you into the red, reach out to your creditors.But going through your bank statements to see what you really spend can help you find areas you can work on. Review your spending: It’s easy to guesstimate your spending with the calculator above.Find ways to boost your income: Whether it’s working a side hustle or a part-time job or asking for a raise at your current job, finding a way to boost the income side of the equation can have the biggest impact of all.
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Other: This is for all other expenses that don’t quite fit in any of the categories above.Savings and investments: Money that you regularly save for an emergency fund or vacation fund, as well as long-term goals like college, retirement, and a home.It also includes medications, glasses or contacts, and the like. Health care: This includes all the out-of-pocket costs for health insurance, dental insurance, and vision insurance, such as premiums (if they're not deducted from a paycheck), copays, coinsurance, and deductibles.This category also includes debt payments (outside of mortgages and student loans) and vacation expenses.
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Personal and family: Cellphone bills, entertainment-including TV streaming services like Netflix and other subscriptions like Spotify-fitness, pet expenses, household supplies, personal care (haircuts, toiletries, etc.), and clothing.
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Also include any student loan payments you have. for children in K-12 and adults going to college.