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Dave Ramsey is a huge influencer in the realm of personal finance. Whether you love or loathe him, his budgeting tips for becoming financially free are spot on.

Here are 6 of his best budgeting habits that you can use for financial planning, money management and becoming debt free!

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Important Side Note:

If you’re in debt, I highly recommend reading Dave Ramsey’s book ‘The Total Money Makeover’ which you can check out here. It has helped MILLIONS of people climb their way out of debt and achieve financial security quickly.

He also has another great book called The Legacy Journey. Check it out here!


1. Take care of your ‘four walls’ first

When budgeting it’s always a good idea to prioritise your spending. Dave Ramsey recommends focusing on the four most important things in your life first and budgeting accordingly. These should always be accounted for first.

The four walls include:

1. Food

2. Shelter/Home

3. Transportation

4. Clothing

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2. Create an emergency fund

Dave Ramsey recommends creating an emergency fund as soon as possible.

We all know that unexpected fees and payments pop up when we least expect it.

After accounting for the ‘four walls’ in your budget, try to look at what you put away or save each month. This may differ each month which is okay! Ramsey recommends having a $1,000 emergency fund.

3. Use cash instead of a card

It’s very tempting to keep swiping your card without thinking about what your spending.

A recent study showed that when we use cash we spend 15-20% less in shops because we are conscious of how much money we are handing over.

Using cash envelopes is a good way to do this. Determine how much money you wish to spend before you go shopping.

You can create envelope categories to stop you overspending i.e. one for food, clothes, pets, dining out, kids etc.

4. Use sinking funds

There are some expenses which we can prepare for yet when they appear we often aren’t prepared and struggle to come up with the funds.

These things can include dental fees, routine veterinary bills, vacations, birthdays, Christmas etc.

These are all things you can save for months in advance and put into a separate cash envelope so it isn’t used in a bank account.

5. Pay off credit cards monthly (and fast)

Interest rates on credit cards can be astronomical and can quickly add up. Ramsey recommends paying your credit cards off monthly.

Based on my experience, some credit card companies will negotiate a lower payment fee per month if you are consistent with your payments so it’s worth checking with them first if that’s possible for you.

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6. Live like no-one else so you can live like no-one else

This may seem common sense but in today’s society we are obsessed with the here and now, often to our own detriment.

Ramsey believes in sacrificing what you want now so you live the life you truly want later, without all of the stress, debt and worry!