The Dave Ramsey Budget: Can You Use This Method & Fund a Business?

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dave ramsey budget

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dave ramsey budgetRegardless of what type of business you start, they all cost something: in time and money.  Depending on what type of business you’re starting the startup costs can range from the hundreds up into the millions, and it can be a challenge to decide how you’ll fund your new business, and it doesn’t matter where you’re starting from.

Some people muster their grandiose business idea while living paycheck to paycheck with little to no extra cash to invest, and others, find ways to get cash infusions like debt, equity funding, or borrowing money from friends and family.

Dave Ramsey, is a radical money evangelist who advocates for self-reliance and teaches how to live below your means, pay off debt, and scale your lifestyle after investing and saving, but can this method work if you’re an entrepreneur with a big dream?   That’s what we’ll be talking about in this post.

The Dave Ramsey Budget Backstory

Like many young entrepreneurs, Dave Ramsey was very ambitious in his youth.  He was taught work ethic and had the inclination to go into business at a young age.   His parents started instilling the concept of earning money at 12 years old by taking him to a print shop and getting business cards for a lawn care service.

As a result, he learned customer service and many other business skills very young.   When he graduated high school, he started selling real estate.  In his early 20s, he started buying and flipping real estate.  He had a real estate portfolio of $4 million worth of real estate, and $3 million dollars worth of debt.  By many standards, he was wealthy.

He was bringing home $250,000 per year after taxes, and he and his wife were able to live comfortably.   Abruptly, his banks were sold, and some were simply tightening up because of economic shifts.  His banks called all of his notes; forcing him to repay all of his loans instantly.   They lost everything, and were forced to file bankruptcy.

Then, they turned to the Bible for knowledge about personal finance.  The Dave Ramsey Budget was born as the Ramsey family relearned principles that enabled them to climb back up the economic ladder, and stabilize their wealth.   Now, Ramsey Solutions, Dave Ramsey’s business empire, has 13 million radio listeners per week, hundreds of thousands of book readers, and filled events all over the US several times per year.   You can hear the entire backstory on this video here:

Dave Ramsey Budget | What is it?

The Dave Ramsey Budget is a zero-based budget, therefore, if you have $5000 in income, you would add every dollar into an expense line item until you have $0 left.  Some of the line items could be:

  • Shelter line items
  • Transportation line items
  • Healthcare line items
  • Business investment line items
  • Savings
  • and, Other investing

Dave says you need to “tell your money where you want it to go”, or it will run away and you won’t know what happened to it.

Dave Ramsey Budget | Who’s it For?

The Dave Ramsey budget is for people who want to:

  • Cut debt
  • Accumulate wealth
  • Live debt free
  • Invest for retirement
  • and, stabilize a self-reliant wealth stream

Dave Ramsey’s Followers and their Business Funding Success Stories

Dave Ramsey listeners and readers have SEVERAL success stories.  Some very notable success stories can be heard in Dave’s Millionaire Hour.

In Millionaire Hour, people call from all over to share their stories of being everyday employees and employers who have a net worth of $1 million or more.  These people are proponents of bootstrap business and self-reliant personal finance.  This playlist will show you some very notable millionaire hour episodes:

Dave Ramsey Budget | How To Do It

Dave Ramsey’s course Financial Peace University (FPU) is the most comprehensive course that explains how to apply the Dave Ramsey Budget.  It comes with budget worksheets, video courses, prompts, the Dave Ramsey “envelope system” and more.

It walks you thru the Dave Ramsey Babystep System which starts with:   1. A $1000 Emergency Fund 2. The Debt Snowball 3. Filling the Emergency fund with 3-6 months of savings 4. Invest 15% into a Roth IRA 5. Save for College 6. Pay off Mortgage 7. Give   Financial Peace University also helps you to overcome common obstacles that deter some people from succeeding in the BabyStep System.

Recommended Reading

These are other articles that may be relevant to your journey to pursue budgeting and bootstrapping your business:

Dave Ramsey Budget | Products To Help You Get Started

The most noteworthy products by Dave Ramsey to help understand and apply the Dave Ramsey Budget are the Total Money Makeover and Financial Peace University.

The Total Money Makeover:

Ebook| Paperback | Audiobook

Financial Peace University Homestudy:

DVD Home Study Course

Final Words on Dave Ramsey Budget

The goal of this article was to show examples of how the Dave Ramsey Budget can work to fund a business. You don’t have to follow all of the buzz and hype about external funding if you don’t want to.  There’s lots of freedom by bootstrapping your business, applying good sound budgeting principles, hard work, and discipline.

If you have questions or concerns about this, don’t hesitate to leave them in the comments section.  I’d love to help you out!   If you would like to start or scale your business, check out my free e-course. It’s a framework to help you grow your business: from idea to enterprise. Check out my free e-course here.

Now, it’s Your Turn…

Have you or someone you know tried the Dave Ramsey budget?  Have you used it to save for business?  What are your thoughts on the Dave Ramsey Budget. Leave your comments below.

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14 thoughts on “The Dave Ramsey Budget: Can You Use This Method & Fund a Business?”

  1. Tiffany Domena

    I love Dave Ramsey’s tips on budgeting. I actually never knew anything about personal finance until I took a course he designed for college students. It changed my life and the way I think about my money. It is because of his budgeting techniques that I was able to afford the start up costs for my website.

    1. Tiffany Domena

      Hi Evette! Thanks for sharing your experience. Dave Ramsey has definitely changed alot of lives. I think it’s cool that you have a success story about using his methods to start an online business!

  2. Tiffany Domena

    Hey Tiffany!

    I’m fairly budget minded, and in the process of trying to scale a new-ish online business, so there are probably things here that I could apply to that process. I’ve always tried to take the “emotional” connection out of finances, and rely on the fact that money is really record keeping, with input and output. (Also trying to get our son to understand that. But he’s getting better. Lol)

    Could you explain the zero-based budget a bit more? I’m not sure I quite got the main principle there.

    Thanks! Stella 🙂

    1. Tiffany Domena

      Hi Stella! It’s good that you’re sharing the principles of budgeting with your son. For the zero based budget, you basically start with your income at the top, then list all your expenses as line items to subtract from that until you have a zero at the bottom. The point is to designate a place for each dollar to go: whether to saving, investing, or expenses.

  3. Tiffany Domena

    Great post on budgeting. I particularly like the line “you need to tell your money where to go” – so true.

    I do think “bootstrapping” your business can be challenging, but any method that avoids relying heavily on bank finance or finance with prohibitive interest rates must be a good thing.

    I had a similar experience where the banks called in my lines of credit, literally overnight. Luckily for me (and my employees) I found a workaround.

    I’m going to take a look at Dave Ramsey a little more closely now thanks to your post!

    1. Tiffany Domena

      Hi Les! I hadn’t heard about banks calling in credit until Dave Ramsey. Wow. That happened to you too? It must be more common than I thought. I agree with you that the pros outweigh the cons with bootstrapping. Thanks for sharing your experience.

  4. Tiffany Domena

    Great to see all these inspirational people’s Bio’s on your site I personally didn’t know Dave Ramsey, but now after reading your article I will check him out more than what I’ve learned already by reading the article. Plus because of your site, I’m gonna be reading your article about retractable banners. Thanks 

    1. Tiffany Domena

      Hi Tommy!

      As entrepreneurs, we need to have people who are doing good things that we can emulate, which is why I like to highlight successful entrepreneurs, and give tips on things they’ve done. Glad you enjoyed reading about Dave Ramsey. He’s definitely someone that’s great to watch.

  5. Tiffany Domena

    Hi Tiffany 

    The Dave Ramsey budget sounds like a very good plan to help move people’s finances in the right direction.

    I’m planning to look at this further however does it mean if you are putting money into lines to save and pay debts do you need more than one bank accounts?

    The concept of being organised with finances to budget is ideal  for a business plan and I’d happily use it on my business as I think it will work regardless as you just change the names of the lines.

    Great review and thankyou for sharing

    1. Tiffany Domena

      Hi Darren! There’s no push to have more than one bank account–that would be up to you. Some people separate bank accounts so things like grocery money doesn’t accidentally get used to pay debts, or vice versa. Great question!

  6. Tiffany Domena

    Hi Tiffany,

     Thanks for sharing the opportunity like Dave Ramsey Budget. You said it right. Every business need some kind of funding to grow fast and especially in the beginning. I have an ecommerce business which needs funding right now. Dave Ramsey story seems very interesting and credible too. I would definitely check his ebook in future.

    1. Tiffany Domena

      Hi Sanjay,

      Needing funding is something all businesses experience at some point or enough.  Big businesses that appear to have alot of money also struggle with having enough money for all the things they want to do, so don’t feel bad about that. Being creative with how to get the money is a muscle you want to learn to grow in your business. I’d recommend checking Dave Ramsey out for leadership advice and personal finance advice, but you can apply his principles to bootstrapping a business. Best wishes for your E-commerce Business!

  7. Tiffany Domena

    Hi Tiffany, 

    I feel “The Dave Ramsey Budget” is an excellent resource for funding a business. I have read Dave’s books. Most of the advice he gives is just common sense. My mom and dad used to teach the same thing. Like don’t spend more than you make. Thank you for offering tools that are proven and successful, if we put the concepts to use in our lives. The videos you added were very informative. One of our biggest obstacles is lack of knowledge. This is an easy fix, especially with websites such as yours. Keep up the good work. johnny

    1. Tiffany Domena

      Hi Johnny! It sounds like your parents were teaching you what many parents don’t. As a result, you think Dave Ramsey’s principles are common sense, but for many people, they really aren’t. It’s good you had that advantage, but if you look at the debt crisis, you’ll see that many people are spending more than they make. Thanks for sharing your story.

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