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What Are the Four Walls of Budgeting?

Tamara Wilhite is a technical writer, industrial engineer, mother of two, and published sci-fi and horror author.

What is the four walls budget?

What is the four walls budget?

All About the Four Walls Budget

One of the first rules of budgeting is paying the most important bills first. How do you prioritize bills, and which bills must you pay when there is more month than money?

The Four Walls Budget is a budget based on supporting the four walls (of your home). In order to support the four walls of your home, you must pay the following essential bills: basic shelter, basic food, and basic transportation, basic clothing.

Dave Ramsey calls for budgeting for the four walls when creating your budget, especially if you have insufficient funds to pay all your bills so that you pay for necessities first and foremost before paying anything else.

We’ll assume for the sake of simplicity that income taxes are already taken out of your paycheck or no longer due and you are deciding what to do with the rest of the money. What does each category include, and what is not included?

When money is scarce, you must choose the most important bills—and only pay those. Then you will know that you can take care of what matters most—your family.

When money is scarce, you must choose the most important bills—and only pay those. Then you will know that you can take care of what matters most—your family.

What You Need to Know

These are the four fundamental expenses you should be prioritizing.

Basic Shelter

Basic shelter expenses include those expenses required to keep a roof over your head. Basic shelter expenses include your rent or mortgage payment, though it does not include additional principal against the mortgage. Basic shelter also includes your basic utilities such as the water bill, sewer bill, electric bill, heating oil bill, property taxes, and minimal phone service to reach 911.

Basic shelter expenses do not include:

  • lawn maintenance,
  • pool service,
  • pest control contracts,
  • optional homeowner's association services,
  • high-speed internet,
  • decorating expenses,
  • vacation rentals,
  • or timeshares.

In a bare-bones budget, you must cut everything that is not necessary to stay in your home and maintain it as a refuge during a financial storm. Your homeowner's association dues may be a necessity if failure to pay them allows them to foreclose on your house, something allowed in Texas.

Basic Food

Basic food is that which keeps you fed and includes all essential nutrition. Eating out is not part of a basic food budget—eat at home or brown-bag it. Basic food expenses do not include soda, beer, wine, or any premium brands. If you cannot meet your financial obligations, organic food is a costly luxury you cannot afford.

Coffee is also a luxury, though an addictive one. If you cannot function without it, switch to a generic brand and ration it—and do not stop at the coffee shop. This is why the coffee shop "latte factor" was coined to describe the little leaks of money that ruin a budget.

Basic Transportation

Basic transportation covers the minimal costs to get to and from work, school, doctor's appointments, shopping as required for maintaining the household, and so forth. Basic transportation includes:

  • car registration and inspection costs,
  • minimal payments on a car payment to keep the absolute minimum number of cars,
  • legally required auto insurance,
  • and required car maintenance.
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If you use public transportation, a bus pass or train pass to get to and from work is part of basic transportation. Basic transportation does not include trips to visit friends, vacations, payments for a motorcycle or "spare" car, boats, vacations, recreational trips, or going "home" every few months.

Basic Clothing

Basic clothing is just that, basic. If you have a closet full of clothes, you shouldn't need to buy anything at all except undergarments, socks, and replacement shoes for a while. For families with children, new to you (don't shun secondhand) clothing in the next size is necessary. Prom dresses, new seasonal fashions, new clothes to keep up with the latest fashions, and wardrobe updates are luxuries you cannot afford.

It is insane and irresponsible to spend money on recreational shopping when you cannot pay for your own food or utilities. Reading glasses and eyeglasses that permit you to see fall under this category, but there is no excuse to buy new sunglasses to maintain a "look."

What Isn't Included?

The budget is pretty straightforward; here are a few examples of things that are not included in the Four Walls Budget.


Entertainment is not a part of this budget. Find free entertainment. This could be an afternoon at the library, a walk through the neighborhood, or a potluck dinner. Listen to the music you already have or watch movies you already own. Blowing money on concert tickets or video game subscriptions when you are late on student loan payments will land you in hot water.


Education is also not in this budget. If you cannot afford to support yourself and there is no one else (parents, partners, a spouse) to help you, educational expenses must be slashed. If you can't pay your bills, you cannot afford to pay for luxuries like:

  • private school,
  • continuing in college,
  • music lessons,
  • yoga lessons,
  • life coaching,
  • and seminars.


Charity is also not part of this budget. You can still contribute time to causes you support, volunteering, or working in their fundraising group. However, if you cannot support yourself, afford to support them financially, no matter how worthy the cause. Give the gift of your time and talent instead.

This article is accurate and true to the best of the author’s knowledge. Content is for informational or entertainment purposes only and does not substitute for personal counsel or professional advice in business, financial, legal, or technical matters.

© 2012 Tamara Wilhite


Tamara Wilhite (author) from Fort Worth, Texas on October 19, 2017:

Robert Erich Thank you for the praise. I first heard about this concept from Dave Ramsey.

Robert Erich from California on May 23, 2012:

I love this four wall concept. I have never thought of it like this before, but it makes sense. Living on less is definitely something that I am interested in doing more of.

Brenda Barnes from America-Broken But Still Beautiful on April 09, 2012:

I have not heard of the Four Wall budget before now. I do agree with most of it. It is good sense and can make a big difference. I disagree with the position on charity giving though. I believe we can always help others even if it is a small food offering. When we give, we receive. Thanks for the information on this budget.

Mark Shulkosky from Pennsylvania on April 08, 2012:

Good Hub. Many don't want to make the difficult choices and sacrifices to get back on financial track. We think we have many "needs" when really, many of our needs are really wants.

Voted up.

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