Ludwig Erhard was born in Fürth on February 4, 1897 to the Roman Catholic father Wilhelm Philipp Erhard, and his Protestant wife, Auguste (née Hassold), as the second of four children. All children were baptized Protestant. The Erhard family ran a successful business of linen- and woolen goods, fabrics, and tailor-made products. After suffering from polio, which resulted in a permanently deformed right foot, young Ludwig attended the elementary- and middle school in Fürth. In 1916, he completed his training in retail sales in Nuremberg. In the same year, and despite his disability, he volunteered for the fighting troops. As a gunner for the 22nd Royal Bavarian Field Artillery Regiment, he was badly wounded in Ypres, Flanders in 1918. In 1919, he left the military service as a corporal and officer cadet.
In December 1923, Ludwig Erhard married the economist Luise Schuster (1893–1975, née Lotter), who was four years his senior. The war widow brought daughter Lore into the marriage. Ludwig and Luise also had a daughter together called Elisabeth.
The family’s holiday home and retreat was the house in Gmund on Lake Tegernsee, which is where Ludwig Erhard was laid to rest after he died of heart failure in Bonn on May 5, 1977. After a state funeral on May 11, 1977 in the Plenary Hall of the German Bundestag, he was buried in the mountain cemetery in Gmund on May 12.