Dave Ramsey Says Now Is Perfect Time To Calculate Your Budget: How To Get Started
Written by
Cindy Lamothe
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Cory Dudak
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There’s perhaps nothing scarier than looking at your bank account and trying to drum up a budget. However, according to finance guru, Dave Ramsey, October is the perfect time to start watching what you spend.
“When you sit down and write out a budget, you might just realize that things aren’t as bad as they seemed,” he posted to X (formerly Twitter). “A written plan erases confusion and gives you clarity to see a path forward.”
Creating a budget may initially feel like a daunting task, but remember this: It’s entirely achievable. How, you ask? By dissecting the process into manageable steps. Here’s a Ramsey-recommended guide for setting up yours today.
1. Start With Your Total Income
Income encompasses all the money you anticipate receiving in a given month, including your regular salary and any additional funds from activities such as part-time jobs, garage sales, freelance work or similar sources.
For instance, if you earn money by working weekends as a barista, that income should be accounted for in your budget. It’s essential to create separate budget lines for each paycheck you (and/or your spouse) receive. Keep in mind that you should work with your net income here — the amount you take home after deducting taxes and any other withholdings from your paycheck.
2. Jot Down Your Expenses
After organizing your incoming funds, list out all of your fixed expenses (the ones that stay the same each month like rent or mortgage). Ramsey noted that you should look to cover your Four Walls: this should include your home, utilities, transportation and food.
You can use your online bank account or bank statements to estimate how much you’ll need for all your other expenses like insurance or child care and nonessentials like personal spending and entertainment.
3. Deduct Expenses From Your Income
Here’s where you subtract all your expenses from your income. This number should equal zero, according to Ramsey, who suggested using a zero-based budgeting system (Meaning: not letting your bank account reach zero). Always leave a buffer of $100-$300. Ramsey’s website noted that “Zero-based budgeting just means you give every dollar a job to do: spending, giving, saving or paying off debt. It’s all accounted for and given a purpose.”
The above guidelines are just a few steps you can take today to help set you up with a budget that works for you.
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