Budgeting

Frequently Asked Budgeting Questions

What is budgeting?

Budgeting is simply making a plan for your money before you spend it—so you’re telling your money where to go instead of wondering where it went. At Ramsey, we use a zero-based budget, where your income minus your expenses equals zero.

What should a budget include?

Include every category where your money goes each month.

For example:

• Giving: tithing or charitable giving
• Saving: emergency fund, other goals, retirement (based on your Baby Step)
• The Four Walls: food, utilities, shelter (rent/mortgage) and transportation
• Other essentials: insurance, childcare, debt payments (if applicable)
• Everything else: entertainment, dining out, subscriptions, personal spending and other nonessential expenses

How often should I make a budget?

Make a new budget every month before the month begins. Each month will look a little different, so your budget should flex with it.

If you get paid weekly, biweekly or monthly, just plan your expenses around each paycheck and adjust as needed.

What if my income changes every month?

The best way to budget with irregular income is to use your lowest earning month from the past few months as your estimated income for the next month. This helps you avoid overspending and keeps you living within your means.

How do I stick to my budget?

Keep it simple: Plan your spending, track transactions as you go, and adjust when needed. It’s also important to remember your why—the reason you need to stick to your budget (getting out of debt, saving for a vacation or a house, etc.).

How do I choose budget categories?

Before you jump into the bills and other expenses, set aside money for giving. We believe in putting 10% of your income here. And if you don’t have an emergency fund yet, make savings one of your priorities.

Next is the Four Walls: food, utilities, shelter and transportation. Create a budget category for each of these. Do the same with your remaining essentials like insurance, childcare and debt (if any).

Finish with nonessentials like personal spending, entertainment, dining out, subscriptions and miscellaneous.

What if I go over my budget?

If you go over in a category, that’s okay! Just cut back somewhere else to keep your budget balanced. Then, for your next month, update that category based on what you learned about your spending.

Do I still need to budget if I make good money?

Yes. It doesn’t matter how much you make—budgeting is about what you do with what you make. Some people making six figures a year live paycheck to paycheck because they don’t manage their money well. A budget gives you clarity, direction and peace with your money, no matter your income.

What's the easiest way to start budgeting?

1. List your income.
2. List your expenses.
3. Subtract expenses from income.
4. Track your expenses (all month long).
5. Make a new budget (before the month begins).

What's the best budgeting tool or template?

The best tool is the one you’ll actually use and stick with. Start with a simple budgeting app, like EveryDollar, or a template that helps you easily plan, track and adjust as you go.