How much should you spend in each budget category? This post lists a debt free budget percentage breakdown from Dave Ramsey and our real-life debt free budget.

Wondering how much you should spend in each budget category? Here is a budget percentage breakdown comparing our real life monthly household budget, Dave Ramsey's budget percentages, and the spending habits of the typical American. Plus, tips for making your own debt free budget plan.

Since our debt free story went viral,  I’ve been getting a lot of questions about exactly how we did it. Today, I’ll be answering one of the most common questions by sharing my real life debt free budget percentage breakdown. 

Specifically, I’ll be sharing my thoughts about one of the most common questions I get asked: “How much should I be spending in each budget category?”

And to satisfy my own nerdy love of data, I’ll be comparing my own budget while we were working to be debt free to the budget percentage breakdown that Dave Ramsey recommends, and just for fun, the spending habits of the Average American.

My Debt Free Budget Percentage Breakdown

(The table is best viewed on a desktop computer rather than on mobile.)

 Our Debt Free BudgetDave Ramsey Monthly Cashflow Plan (1)Average American Spending (2)
Saving0%10-15%n/a see Savings, Debt, Other below
Housing15 - 20 %25 - 35 %27 %
Utilities6 - 10 %5 - 10 %n/ a included in housing
Food(Groceries and Restaurants)3-20%5-15%17%
Transportation2-4% (car payment included in debts)10-15% (car payment included in debts)14% (includes vehicle purchases)
Medical/Health4-27%5-10%6% (includes health insurance)
Insurance1-4%10-25% (includes health insurance)9% (health insurance included in Medical/ Health)
Personal4-24%5-10%5% (All other expenses)
Debts23-77% (includes car lease payment)5 - 10 % (Goal is 0 % )n/a, see Savings, Debt, Other
Savings, Debt, Other not includedn/a, see aboven/ a, see above14%

A Few Notes on My Debt Free Budget Percentage Breakdown

You’ll see a range of budget percentages for my debt free budget. These varied from month to month for a few reasons.

As time went on, I learned to save more, especially in the grocery category.

Also, our income was varying wildly each month as I hustled to earn as much extra from home as possible. Sometimes, we had just our usual paycheck. Others, I might have gotten paid for a big project or blog promotion. The higher spending in the personal category included childcare while I worked part time the last couple of months to finish up our debt payoff.

Other expenses outside the usual did come up once in a while. Specifically, the first month we paid the midwife for the birth of our second child, so you’ll see a big variation in the health category.

Where We Cut Costs

Following the Dave Ramsey baby steps, we focused completely on paying off debt at this time, choosing to wait on saving and giving until later, so those percentages are quite low. (This is his book that got us started on our own journey to debt free. affiliate)

You can probably see from my debt free budget breakdown that we spent almost nothing on clothing, entertainment, and household items.

To cut costs on transportation, my husband drove to the park and ride and took the bus to work.

We were very blessed to have very affordable rent at the time.

These are the ways we were able to ‘balance’ our budget and get out of debt fast. Your situation is probably completely different, so I’ve listed a few key tips below that can get you started on making your own debt free budget.


(1) Dave Ramsey Monthly Cashflow Plan

(2) Bureau of Labor Statistics, Consumer Expenditures 2013

Wondering how much you should spend in each budget category? Here is a budget percentage breakdown comparing our real life monthly household budget, Dave Ramsey's budget percentages, and the spending habits of the typical American. Plus, tips for making your own debt free budget plan.

How to Make Your Own Debt Free Budget

If you’re working on creating your own budget, feel free to use the budget worksheet I created for my own budget as a starting point.

Click here to download my free Family Budget Worksheet printable.

If you’re looking at the budget category guidelines above and then looking at your own spending and wondering how you’re supposed to get from there to here, here are a couple of suggestions.

If you find that you are spending significantly more in a particular category, it might be time to make make a big change to start living within your means and get out of debt. After years of struggling against what we thought our lifestyle should be, my husband and I had to get honest about what we could truly afford.

Another approach is to look for smaller changes to make to cut your overall budget and start paying more toward your loans. We implemented almost every one of these 97 Easy Ways to Save Money to pay off debt faster.

As you create your own budget, be sure to include these commonly forgotten budget categories. There’s nothing more frustrating than working so hard to stick to a budget only to find that you’ve forgotten a major expense.

Above all, though, as you make your budget, don’t lose sight of your bigger goals. Do you want to get out of debt and start moving toward some big dreams for your family? Do you want more financial peace and freedom in your household?

Once you know where you’re going, and why, then you can work backward from that and set your spending and budget based on what you need to do to make that big goal happen. Even if you have a long way to go before achieving your goal, just starting to live into your true values and priorities can be so rewarding!

Which of the 3 budget guidelines does your budget most closely resemble? What are the budget categories where it’s the hardest to save?

Where can I send your free Family Budget Worksheet printable?

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