What Are The Four Walls In Budgeting? -Must Read In 2024

According to Dave Ramsey, the four walls are food, shelter, utilities, transportation, and in some cases basic clothing. All of these are basic necessities that must not be left out when paying debt or creating a budget.  

Having a hard time paying your debts? 

If so then a good budget can bring your finances in order. However, no matter how rigorous your budget is, you must not ignore the four walls. But what are the four walls? 

Well, you are about to find it out in this post. Because here I am going to briefly describe  What Are The Four Walls of budgeting? Moreover, I’ll also cover what priority four walls hold in your budget, some key components of successful budgeting, and many more. So, stick here. 

Check Out budgeting methods for low-income families

What Are The Four Walls in Personal Finance?

The four walls is a metaphor used by Dave Ramsey to describe the basic necessities. The four walls include

  • Food
  • Shelter
  • Utilities
  • Transportation

He also included basic clothing in the four walls for some instances. 

Dave Ramsey compares the basic necessities with four walls because your family or the four walls of your house must be protected. So that you and your family can be most effective in dealing with a tough situation.

As a result, the first priority in your budget should be keeping these four walls protected even though you are living paycheck to paycheck.  

Now let’s have a look at the four walls in detail. 

Example of the Four Walls of Budgeting

The below infographic provides an example of the costs of four walls.

What Are The Four Walls of budgeting

Now let’s look at What are the 4 components of a budget Dave Ramsey in detail.

What Are The Four Walls of Budgeting?

Food, shelter, utilities, and transportation are the four walls in budgeting and if you spend wisely then they should not take more than 50-60% of your income. 

What Are The Four Walls In Budgeting

In this section, you will find each of the walls in detail and estimate how much these basic necessities can cost you. 


Food is the most basic human necessity and also the first component of the four walls. Because with a hungry belly, no work can be done right. 

Moreover, if you cut costs on food you can end up paying more in medical bills. So, always keep your and your family’s belly full. Food can be managed with 10-12% of your take-home pay. But it largely depends on your income and family size.  

However, you should also keep in mind that eating out in restaurants or takeaways is considered a luxury in hard situations. So, don’t cut costs on your home food and absolutely avoid restaurants. 


No matter how bad the situation is, you have to put a roof over your family’s head. That’s why shelter comes second in the four walls. The shelter is also the most expensive one. 

Doesn’t matter whether you have your own house or you are renting a shelter can cost you up to 30% or more of your take-home pay. Because you must pay your mortgage or rent in order to have a home. Otherwise, you might end up homeless or in more debt. 

So, before choosing a house make sure you will be able to pay the mortgage or rent. 


Utilities are also important. Because you or your family can’t survive without electricity or water. The utility can cost you up to 5-8% of your income. The utilities include

  • Electricity bill
  • Water bill
  • Gas bill
  • Internet bill
  • Phone bill

Utilities are important but it does not include your Netflix subscription. Because subscriptions are luxury items. Phone and internet bills can be considered as needs but other subscriptions aren’t necessary to live. 


Transportation costs are also included in the four walls. Because for you to pay the bills you need to go to work, right?

Moreover, commuting is also essential for buying food and other necessities. Transportation can cost you 5-10% of your take-home pay. 

However, in tough situations, you should consider using public transportation. I know they are not the best option. But you can save a ton on gas prices and car maintenance. 

These are the four walls you must protect. If you can complete the four walls within 50-60% then you can keep 10% as an emergency fund and pay the rest to clear your financial burden.  

Basic Clothing

Basic clothing is also needed. But you don’t have to pay to buy them each month. So, it is not included in the four walls. But it is as important as others in some instances.

Now let’s look at some key components of successful budgeting.

What Priority are the Four Walls in your Budget?

The four walls should be the first priority of your budget. Because they are necessary for basic survival and well-being. Other expenses, such as entertainment, vacations, and non-essential items, should come after these essential expenses have been covered.

However, it’s important to note that everyone’s financial situation is different with different needs. Moreover, there can be other more essential expenses to consider based on your circumstances.

For example, healthcare expenses may be the most essential expenses for some individuals. However, if you have these kinds of priorities then the four walls can be placed second. But you must protect them at any cost.

But it’s important to prioritize expenses based on individual needs and financial goals.

What Are Some Key Components Of Successful Budgeting?

There is no specific answer to this question. Because the key components of successful budgeting will vary depending on the individual and their specific financial situation.

However, some critical components of successful budgeting.

  • Never ignore the four walls. 
  • After fulfilling the four walls, start paying your debt. 
  • Keep Track of all your spending so that you have a clear view of where your money is going.
  • Always Plan ahead and be proactive, rather than waiting until you are already in a financial bind.
  • Being realistic about what you can afford and what you need to save for
  • Having a solid savings plan in place
  • Being disciplined and sticking to your budget even when temptation strikes
  • Do not force yourself to strict budget rules like 60 30 10 if you can not maintain it.
  • Seeking help and advice from a financial planner when needed. 

These are some of the components of a successful budget. You should also focus on the last step of your budget

How Many Categories Should You Have In Your Budget

There is no definitive answer to this question. Because the categories will depend on your specific needs. 

Some people feel that they need just a few categories, while others may have upwards of 20 different budget categories. The number of categories you need ultimately depends on your own personal spending habits and what you deem important.

One way to think about it is to divide your budget into two main types of expenses. They are 

  1. Fixed: Fixed expenses are those that are the same each month, such as your rent or mortgage payment, car loan, or insurance premiums.
  2. Variable: Variable expenses can change from month to month, such as food or groceries, gasoline, etc.  

Once you have broken your budget down into these two categories, you can then start to think about what specific sub-categories you need and budget accordingly. 

By now we have found the answer to what are the four walls. Now let’s look at some of the related queries.


Here are some of the frequently asked questions related to this topic.

What are the four walls in order?

The four walls in order should be

  • Food
  • Shelter
  • Utilities
  • Transportation and Basic clothing

However, medicine can also be added to the list for people with health conditions.

What Priority are the Four Walls in your Budget?

The four walls in your budget are the most basic expenses you need to cover to keep your family sound. They should be given the highest priority in your budget, and you should make sure to allocate enough money to cover them before you pay for anything else.

In simpler words, If you are struggling to make ends meet, your four walls should be the last thing you cut from your budget. Because without food, shelter, utilities, and transportation, your family will not be able to function properly.

How often should you Create a Budget?

You should create a budget based on your financial goals only once following a particular budget rule. However, It is recommended to keep track of your budget every month. This will help you track your income and expenses and make sure that you are staying on track with your financial goals.

However, you might need to change your budget plan depending on your individual circumstances. For instance, if your income or expenses fluctuate, or if you are making major financial changes, such as buying a house or having a child, then you will need to create a budget more often.

On the other hand, If you have a regular income and expenses, and your financial situation is relatively stable, then you may be able to get away with creating a budget less often, such as quarterly or even annually.

In Summary

To deal with tough financial situations, you must have a calm mind. But if you cut costs on the four walls or food, shelter, utilities, and transportation then it can bring more stress for you and your family. So, always protect the four walls.

I hope this post on “ What Are The Four Walls” meets your needs. Let me know if you have any queries. 

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