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Gazelle Budget: A Practical Way to Achieve Financial Freedom

What is Gazelle Budget?

Gazelle budget, also known as the “Gazelle intensity” budget, is a budgeting system that focuses on paying down debt and building up savings as quickly as possible. The idea is to become “as fierce as a gazelle” when it comes to repayment and saving. This budgeting style was popularized by Dave Ramsey, a personal finance expert, on his radio show and podcast, The Dave Ramsey Show.

Benefits of the Gazelle Budget

The Gazelle budget offers several benefits. First, it helps individuals create a plan to get out of debt quickly. This is done by focusing on eliminating debt with the highest interest rate first, and then working down to the lower interest rate debts. This way, the individual can save money by paying less in interest. Second, it encourages individuals to save for the future. By setting aside money each month for savings, individuals can build a cushion for unexpected expenses or plan for retirement. Finally, it helps individuals stay on track with their budget by providing a simple and straightforward system.

How to Create a Gazelle Budget

Creating a Gazelle budget is relatively easy. The first step is to figure out your income and expenses. This includes all bills, payments, and other financial obligations. Once the income and expenses are determined, the individual should list the debts in order of interest rate. The highest interest rate should be at the top of the list.

Next, the individual should calculate how much money they can put toward their debt each month. This should be based on their income and expenses. After the amount is determined, the individual should create a budget that allocates that amount to the highest interest rate debt first. This amount should be the same each month until the debt is paid off.

Once the highest interest rate debt is paid off, the individual should move onto the next highest interest rate debt. This process should continue until all the debts are paid off.

Saving Money with the Gazelle Budget

In addition to paying off debt, the Gazelle budget can also be used to save money. After the individual has paid off their debt, they should create a budget that allocates a certain amount of money each month to savings. This money can be put into a savings account, an investment account, or any other type of savings vehicle.

The individual should also create a budget that includes an emergency fund. This is important to have in case of an unexpected expense or job loss. By setting aside money each month for an emergency fund, individuals can avoid taking out loans or using credit cards for emergencies.

Sample Gazelle Budget

Sample 1

Income: $4,000/month

Expenses: $2,500/month

Debts: Credit Card $2,000 at 15% interest, Car Loan $5,000 at 6% interest

Savings: $500/month for emergency fund, $1,000/month for retirement

Sample 2

Income: $2,500/month

Expenses: $1,800/month

Debts: Credit Card $1,000 at 15% interest, Student Loan $8,000 at 4% interest

Savings: $500/month for emergency fund, $500/month for retirement

Sample 3

Income: $3,000/month

Expenses: $2,200/month

Debts: Credit Card $2,500 at 15% interest, Medical Bill $1,000 at 10% interest

Savings: $500/month for emergency fund, $500/month for retirement