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Good morning! I hope your first week of March has gone well.

I recently received a newsletter encouraging readers to ask themselves a simple question: Why? Why do we create a budget and stick to it? Why do we make certain financial decisions? Why do we buy that new pair of shoes?

Understanding the why behind our financial choices can help us become more intentional with our money. When we recognize our habits and motivations, we can align our spending and saving with what truly matters—creating a financial plan that works for us.

TODAY ON REASONED REFLECTIONS:

• Articles 💰;

• Market Movers 📈;

• Reflection No. 25;

• Fun fact of the Reflection 🗓️;

• Quote of the Reflection 🧐.

ARTICLES 💰

Time for a bit of R&R

• It’s going down!

  My Take - Mortgage rates are at their lowest levels since last year, which is excellent news for homebuyers waiting on the sidelines. But remember that just because rates are down doesn’t mean you should stretch your budget or buy more house than you need.

• Stay calm!!

  My Take - Market volatility is tough to stomach, but it’s just part of the game. If you’ve got time on your side, the best move is to tune out the noise and avoid making rash decisions.

• Mr. Wonderful puts out the FIRE

  My Take - Kevin O’Leary makes a great point: work isn’t just about the money. There’s a social aspect to it, a sense of purpose, and a feeling of self-worth that many people don’t realize they’ll miss when they retire (especially if they do so in their 50s or earlier). While financial independence is the goal for many, it’s worth thinking about what comes next beyond just the numbers. 

• Social Security

  My Take - Social Security is a hot topic right now, and for good reason. Here’s an insightful discussion from the Social Security Commissioner about the last time the program underwent a major legislative overhaul. 

• Spending responsibly

  My Take - Reasoned Reflections is a newsletter about personal finance, and we are covering budgets this month. However, is spending just as important as saving? Probably not. However, spending intentionally so you can enjoy life while still building a solid financial future is a good skill to have.

📈 MARKET MOVERS 📉

Top Gaining Large-Cap Stocks From This Week

Data was pulled from MarketBeat as of 3/5/2025 based on the preceding 7 days. It includes U.S. NYSE and NASDAQ companies, covering all sectors, and focusing on large-cap stocks ($10b+ market cap).

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REFLECTION No. 25: EveryDollar Budget

I - Issue: What’s an EveryDollar budget?

R - Rule: EveryDollar is a budgeting system created by Dave Ramsey that allocates every dollar of income. You start by adding up all your expected income for the month and then subtract necessities, debt, and savings until you reach $0.

A - Analysis: Dave Ramsey is one of the most well-known figures in personal finance, offering books, podcasts, and a budgeting app. His “Baby Steps” framework focuses on becoming debt-free, saving aggressively, and giving generously. 

An EveryDollar budget follows this philosophy by assigning every dollar a job. Here’s how Dave suggests breaking it down:

Giving - 10%

If you are in a good spot financially, allocating part of your budget to giving back can be rewarding. Whether it’s donating to a charity, tithing, or supporting a cause you care about, giving can provide both personal fulfillment and tax benefits (see Reflection No. 23 on itemized deductions).

Savings - 10%

Your future self will thank you for prioritizing savings. A good starting point is 10%, but saving more is always a smart move if your budget allows. The percentage you choose here could include any contributions your employer makes, but I would only include those employer contributions if they are not subject to vesting. If there is vesting involved, then I would try to save 10% on top of that employer contribution. 

Housing - 25%

A quarter of your budget towards housing?! Yep. Housing costs continue to rise whether you own or rent. As a homeowner, I try to keep my PITI (Principal, Interest, Taxes, and Insurance) payment to 25% of my take home pay. This is probably a more conservative approach, but it helps me ensure I’m not buying more house than I can afford. 

Utilities - 5% to 10%

This category can be difficult to budget for, so I think it makes sense to start on the higher end of the range. Utility prices—things like water, electricity, and energy—can fluctuate seasonally and tend to increase each year. You can adjust accordingly once you track your bills over a few months.

Food - 10% to 15%

This can also be a difficult category to budget properly. Especially if you have kids (teenage boys specifically). And with the bird flu wreaking havoc on egg prices, and thanks to Tariff Tuesday this week, who knows how much grocery prices will continue to rise. If you overestimate, you can always reallocate funds from this category to other parts of your budget later in the month.

Transportation - 10%

Getting from point A to point B isn’t cheap. This category includes gas, public transportation, and car payments (which Dave would want you to pay off ASAP). It may take you a few months to know how much you spend on gas, but you can update accordingly once you’ve got a few months of data to go off of.

If you’re car loan-free, this percentage could be much lower.

Insurance - 10% to 25%

Insurance, insurance. It’s a necessary evil, and it sure comes in handy in times of turmoil. This category would include any insurance premiums you have like homeowners (unless you’ve placed your entire PITI payment under the housing category) or renters, life insurance, car insurance, valuable property insurance, and your share of health insurance premiums (if your employer doesn’t cover 100%). Since insurance premiums are usually fixed for 6 to 12 months, they’re one of the more manageable expenses to budget.

Pro tip: When your insurance policies are set to renew, shop around! Insurers tend to give better rates to new customers. I prefer working with an independent broker who can compare multiple providers rather than a company-affiliated agent.

Personal spending - 5% to 10%

Finally, something fun! This is your guilt-free spending category! This might include coffee runs, new clothes, or eating dinner out.

Health - 5% to 10%

This category covers gym memberships and wellness expenses. You could also include HSA contributions here if you are enrolled in a HDHP (HSAs are covered in Reflection No. 12 and HDHPs are covered in Reflection No. 7).

Recreation - 5% to 10%

Recreation looks different for everyone. For me, this section of my budget typically includes allocating some of my budget towards saving for future travel. Although I try to cover most of my travel expenses with points, I still need some cash for my trips. 

Miscellaneous - 5% to 10%

This category covers everything else. In my case, it’s mostly spoiling my two Golden Retrievers with fancy dog food and setting aside funds for unexpected vet bills (basically, self-insurance for my dogs). 

C - Conclusion: Dave Ramsey has a proven track record, and the EveryDollar budget is a great starting point for those new to budgeting. By assigning every dollar a purpose and following recommended allocations, you gain control of your finances while ensuring your spending aligns with your goals.

FUN FACT 🗓️

On this day in 1876, Alexander Graham Bell successfully patented the telephone. Learn more about it here.

QUOTE OF THE REFLECTION 🧐