Dave Ramsey Allocated Spending Plan: Guides & Forms

If you’re struggling to stick to a budget then the Dave Ramsey Allocated Spending Plan can help.

This form will help you break down your paycheck—and show you where all your money goes.

Dave Ramsey Budget Percentages

If you had an average monthly household income of $5,000 your budget allocation may look something like this:

  • Charitable Gifts 10–15%
  • Saving 10–15%
  • Housing 25–35%
  • Utilities 5–10%
  • Food 5–15%
  • transportation 10–15%
  • Clothing 2–7%
  • Medical/Health 5–10%
  • Insurance 10–25%
  • Personal 5–10%
  • Recreation 5–10%
  • Debts 5–10%

Dave created this list through years of experience in helping families with their finances—and plenty of research.

If you find that you spend much more in one category than the percentages recommend, you should “consider adjusting your lifestyle in that area in order to enjoy more freedom and flexibility across the board.”

Dave Ramsey Allocated Spending Plan

The main factor that sets Dave’s budget apart is that it allocates expenses by pay period. You are no longer creating your budget in four-week or monthly “blocks”.

For Regular Income Planning

If you get paid on the 1st and 15th, then your pay period for July, for example, would look like this:

  • 1st until the 14th
  • 15th until the 31st

Irregular Income Earners

Dave’s recommendation for “irregular income earners” is that you plan your budget based on your lowest earning month for the previous year.

While very strict, Dave’s budgeting approach has become very popular in the U.S. It shows you where your money is going—and reduces the impact of any “financial emergency” that may pop up.

The 4 Steps to Complete the Dave Ramsey Allocated Spending Plan

The Dave Ramsey Allocated Spending Plan is designed to be completed in the following four steps:

  1. Insert pay periods
  2. Estimate expenses
  3. Track expenses throughout the period
  4. Rebalance to zero

To complete the steps mentioned, you’ll need the following two forms below.

Dave Ramsey’s Budgeting Forms

Here are the two forms you’ll need to complete the Dave Ramsey Allocated Spending Plan:

Form 1 – Monthly Cash Flow Plan 

You’ll use this form to estimate your monthly expenses—and fill in the “actual figure” when the time comes to pay the bill!

Form 2 – Allocated Spending Plan

This form will build on your Monthly Cash Flow Plan and go more in-depth, by breaking your income down by pay period.

The four columns on this form represent the four weeks in a given month.

Step 1. Insert Pay Periods

You’re going to be splitting your month up into four columns, one for each week of the month.

So the first step is to insert the days you are paid and how much into the Monthly Cashflow Plan.

For many of us, periods pay periods are not consistent. For example, freelancers or otherwise self-employed people may get once a month, or seven times a month.

This makes it more difficult to create a monthly cash flow plan, so I’ll simplify it.

If you have inconsistent pay periods, you should still split up and estimate your earnings on a weekly basis.

How to Complete the Monthly Cashflow Plan

Within each main category, such as Food, there are subcategories, like Groceries.

Start at the top and work your way down, filling out the Budgeted column first. Add up each subcategory and put that number in the Total box.

Also, pay attention to Dave’s recommended percentages. This will help keep your budget balanced.

Step 2. Estimate Expenses

The next step is to insert the data you collected in the Monthly Cash Flow into the Allocated Spending Plan.

What should your Allocated Spending Plan look like?

Here are Dave’s recommended budgeting percentages to refresh your memory:

  • Charitable Gifts 10–15%
  • Saving 10–15%
  • Housing 25–35%
  • Utilities 5–10%
  • Food 5–15%
  • transportation 10–15%
  • Clothing 2–7%
  • Medical/Health 5–10%
  • Insurance 10–25%
  • Personal 5–10%
  • Recreation 5–10%
  • Debts 5–10%

Remember that you must breakdown your monthly expenses into weekly increments. This is what makes the Dave Ramsey Allocated Spending Plan so effective.

You’re done once you’ve budgeted every expected expense over the next four pay-periods.

Step 3. Track Expenses Throughout the Period

Now it’s time to track your expenses over your pay period as they come up.

Your goal is to spend less you budgeted for, and any money left over will be added to the “remaining” column.

If you don’t like manual tracking, you can use Dave’s budgeting app EveryDollar.

EveryDollar syncs across all your devices so whether you are budgeting from your desktop or phone, your budget is always up to date.

Once you reach the end of the pay period you arrive at the last step.

Step 4. Rebalance to Zero

Hopefully, you have some money left in the remaining column at this point.

You’d think it’d be a good idea to roll over these funds into the next pay period, but that’s not what Dave suggests.

Here’s what you should do if you have money left over at the end of the column.

Go back and adjust an area, such as savings or giving, so that you spend every single dollar. “Every dollar needs a home.” As Dave says.

A lot of people like to allocate their remaining funds to their most urgent financial goal. That could be building an emergency fund, debt repayment or building wealth, to name a few.

It’s imperative that you allocate every dollar to some part of the Allocated Spending Plan. This allows you to start off fresh the following month.

Other Budget Methods

The Dave Ramsey Allocated Spending Plan is not the only budgeting method out there. But it is certainly one of the most popular!

Another popular budgeting method is the 50/30/20 rule—which I explore further here.