I’m another Susan, retired now for over 12 years. I kept precise accounts my entire life, adjusting my budget through the years as circumstances changed (when I’d have a significant raise, when the mortgage was paid off, etc). Several years into retirement, I realized a budget wasn’t really very meaningful anymore because my regular monthly expenses (excluding Medicare supplement!) were far less and spending on such things as travel were much more. Basically now I just stay careful not to overindulge, and I do compare each month’s balance with the previous one as a guide. I haven’t touched my IRA, living on my pension and social security just fine, though I expect when I replace my car I will take that expense from the IRA. Enjoy your retirement!

Good point. I tried to dive in a bit more on his site, and he doesn’t clarify.

Since most are W2 employees, they don’t necessarily save for taxes. So, I think what he’s trying to do here is to advise to save 15% of gross income in a 401(k) and then budget what’s leftover from net pay.

Of course, if you’re self-employed, you need to save for estimated taxes, which would create a separate budget category.

R.J. – a recommended savings rate of ~15% is associated with gross pay, not net pay.

You are probably getting confused because Dave usually makes a house expense recommendation based on take-home (after-tax) income.

I think this graphic needs some updating.

I would think most Ramsey followers would not even consider having any accounts with fees of any kind. (Well except his own app, of course)

Recommended budgeting percentages are ideal for the typical household that still has a house/rent payment, car payments, etc…

As you said, your best bet is to figure out a budget for yourself best on your situation. A good start is to analyze where you’re spending now versus how much income you have coming in.

I’d base my budget on my net take-home pay.

What I do specifically is take a generous amount off the top for taxes from my business checking account before I pay myself, e.g. between 25 and 30%. That money then sits in a separate savings account just for taxes.

After finalizing taxes for the year, any money that’s left over in that tax account I consider a bonus.

I’m also self-employed. How do you account for taxes in your budget?