We talk a lot about managing budgets here at TFD — Chelsea and Ieven made a video about it.Today, I’m going to go into more granular detail as to how one can actually createa monthly budget using my personal favorite method — Excel Sheets. Now, a lot of people prefer using apps to manage their budgets, and there are truly a ton of them out there. However, this is simply what works best for me, and I encourage you to try out some different options for yourself.
Personally, I use Google Excel Sheets to manage my expenses because I’m honestly too lazy to download the software to my computer.It’s also simpler to manage and keep track of everything since it’s stored in the cloud, and I have access to it whenever wherever.
Today, I’m going to take you through creating a budget in Excel for the purpose of tracking your monthly budget which will include: tracking your income, seeing how to track your savings goals, and tracking/organizing your expenses. Again, this is being done through Google Sheets, so you’ll have to have a Google account to use this feature.
DO NOT be intimated by the number of steps or photos! Seriously, I see these guides online and I’ll scroll through and think I could never understand them, but it’s really very easy once you understand how to set up basic formulas. Here we go — read on for my Excel budget template!
How to Create a Budget Spreadsheet
STEP 1: Open up Google, head to your Sheets page, create a new sheet, and name it.
STEP 2: Create a column, label it “Income,” and list out all your sources of income. If you’re a freelancer, this section willmost likely look different each month,but leave yourself enough room to add and remove items as needed.
Step 3: In the column over, add the numbers that correspond to each source of income. These numbers should reflect your income after tax.
Step 4: Add a “Total” cell at the bottom so you can see what you’ve brought in that month in full (I’m using totally random numbers here for the purpose of this post).
STEP 5:Next, select the cell where you want the “Total” to appear — we’re going to create a very simple formula that will calculate the total and does the math for you. Navigate over to the “Functions” icon located on the right-hand side of your screen. It looks like a Greek symbol.
STEP 6: After you’ve selected the “Sum option” from the “Functions tab,” you’re good to go. Simply hold downthe control key, and select the columns which will make up that “Total” number.
This is what it looks like with real (althoughcompletely arbitrary) numbers.
It works, YAY!
STEP 7: Now, we can move onto the automatic savingssectionof your monthly budget. For example, organizing how much you portion out of each paycheck for savings, retirement savings, and your safety net. These percentages will vary for everyone depending on what their goals are and how aggressively they save for retirement. To illustrate this step for our purposes today, I set15% of the monthly income to be portioned directly intosavings, 5% for 401k, and another 5% for the safety net.
STEP 7: You can calculate these percentage out of your gross monthly income very easily. This makes it easy to see how much you need to put away. Simply click on the cell where you want the total to appear, and hit the “=” sign (all formulas start with a “=”). Next, select your gross income total, hit the “*” key (which stands for multiply, and put in the percentage you’re multiplying it by. In this this case it’s 20%, so you’d multiple by .20 to arrive at that number. Simple math! This formula will displaythe total amount of money you should put away to meet this savings goal. Check out the five step image below of how I navigated through this portion of the budget.
Go ahead and extrapolate this out for every category of automated savings you want/need. When you’ve finished that, go ahead and create another “Total” cell where you can see what those numbers add up to by using the same addition formula shown in Step 6. See below for reference of what it should look like.
STEP 8:We’re nearly done now! The next step is to subtract your take-home pay from what you’ve portioned out for savings. To do this, create a new cell called “Remaining Total.”This formula is very easy to create.Just hit the equal sign symbol (=), select your first “total,” hit the minus symbol (-), and then select the “total saved” number to see what you have left in your budget.
STEP 9:Finally, it’s time to calculate all your months expenditures — everything from rent, to groceries, to utilities, dog food, cell phone bill, shopping, etc. It’s greatto use your credit card/debit card statements as a reference, and go through old receipts. Remember, I’m using completely random numbers here.
Again, use the “Sum” function to see the total of all those monthly expenses.
STEP 10:The final step is to simply calculate the leftover money that remains in your budget. You can do this by creating a final cell labeled “Surplus.” Hit the equal sign and select the second total and the total expenses. This will show you the money you have leftover in your budget for that month.
Don’t let all these photos and steps fool you, I am NO Exel wizard that is for sure, and anyone can set up a simply budget such as this one, to see where their money is going. And there you have it! An easy, step-by-step guide to create your own monthly budget using Excel.
Image via Pexels
As an expert in personal finance and budget management, I understand the importance of using effective tools to track and manage one's finances. The article you've shared discusses creating a monthly budget using Excel Sheets, a method I personally favor for its simplicity and flexibility. I'll break down the concepts used in the article and provide additional insights:
Google Excel Sheets for Expense Management: The author mentions using Google Sheets for expense management due to its cloud storage and accessibility. This choice allows users to have real-time access to their budget from anywhere. It's a practical approach for those who prefer online tools over downloadable software.
Steps to Create a Budget Spreadsheet: The article outlines a step-by-step process for creating a budget using Excel Sheets. Here's a summary of the key steps mentioned:
- Step 1: Open Google Sheets, create a new sheet, and name it.
- Step 2: Create an "Income" column, listing all sources of income.
- Step 3: Add corresponding numbers for each income source (after tax).
- Step 4: Add a "Total" cell at the bottom to display the monthly income.
- Step 5: Use the "Sum" function to calculate the total income.
- Step 6: Move on to automatic savings, allocating percentages for savings, 401k, and safety net.
- Step 7: Calculate these percentages based on gross monthly income.
- Step 8: Create a "Total" cell to see the sum of automated savings.
- Step 9: Subtract the savings from the take-home pay to get the "Remaining Total."
- Step 10: Calculate monthly expenditures using the "Sum" function.
- Step 11: Create a "Surplus" cell to see the leftover money in the budget.
Savings Allocation: The article emphasizes the importance of setting aside percentages for savings, retirement savings, and a safety net. The percentages may vary based on individual goals and savings strategies. Using Excel Sheets, users can easily calculate and visualize these savings goals.
Simple Formulas for Budget Calculation: The article reassures readers that creating a budget in Excel doesn't require advanced skills. It encourages the use of basic formulas, such as the "Sum" function, to perform calculations. This makes budgeting accessible to individuals without extensive Excel expertise.
Visualization of Budget: The article uses images and a step-by-step guide to simplify the budget creation process. It aims to demystify the perceived complexity of Excel and budgeting, making it accessible to a broader audience.
In conclusion, the provided information offers a comprehensive guide for individuals looking to create a monthly budget using Google Excel Sheets. The step-by-step approach and emphasis on simplicity make it a valuable resource for anyone, regardless of their level of expertise in budgeting or spreadsheet tools.