How to Create a Personal Budget Spreadsheet

How to Create a Personal Budget Spreadsheet

Reading Time: 5 minutes

When it comes to making sense of numbers, Microsoft’s Excel is the legacy software king. High school–level math and half an hour of familiarizing yourself with its basics is to create a powerful personal budget that you can tweak to perfection. Usually, the more sophisticated  personal budget apps are, the less you will be able to perfectly fit them to your lifestyle.

This is why you should start with the powerful spreadsheet basics. If you already have installed Excel, simply download one of the many personal budget templates available. With any one of them, you will be able to sort out your budget in a few minutes.  

What Is A Personal Budget Spreadsheet?

Most people rely on guesstimates to balance their income and expenditures. Unfortunately, this approach invites hiding costs and prevents you from employing a systematic approach to finance. 

Merely ‘thinking’ about things, including your budget, is like idle chit chat—it’s hazy, it’s meandering, it is easily forgettable, and it is not searchable. In short, it’s exactly the opposite of what you would want to do with something as critical as managing your personal finances.

The importance of creating a personal budget spreadsheet cannot be overstated. It provides you with an overview of your life. Do you spend more than you should? Is your spending aligned with your lifestyle? Are some of the things you spend your money on completely unnecessary? Is your current lifestyle sustainable?

A personal budget spreadsheet allows you to  understand the trajectory of your life. Many people try to avoid this level of clarity, but if you want to improve your life in any measurable way, a personal budget spreadsheet is the foundation.

Using Budget Spreadsheets

 As you can see from the provided budget template, this is the order in which you should create your personal budget spreadsheet:

List your expenditure categories and name them. For example: gas, electricity, water, internet, phone, food, shopping, insurance, school, etc. Color-code your expenditure categories along with your total income and savings. You can fill any cell with whatever color you like. This is important to get a clear overview at a glance of your major expenses, and if you want to include a visual representation of your expenditures. For example, this template would automatically color-code your expenditures into a pie-chart.

This template automatically Color-codes your expenditures into a pie-chart.

Use the auto-sum function to add all the expenditures per month and per year. This is the foundation of your budget, as you will always have many more expenditure categories than income categories. And once you have them, it is a simple task to add another category to deduce your income from your expenditures, which creates savings.

When you start using Excel, or Google Sheets, you will immediately notice that it relies on a cascading principle. Once you create a category (cell), you can easily employ that category to calculate something else later on. For example, you cannot create a “total per year savings” category without first creating “per month expenditures” categories.

Know Your Net Income

The majority of people source their income from a few streams. This could be an annual salary, or a consulting gig. However numerous your income streams are, instead of listing them all, simply add them together as total monthly income. 

If you prefer doing that in Excel too, you can create a specific sheet for adding just your income streams. You would then be able to add that monthly income sum cell to your monthly/yearly personal budget.

This will serve you as a foundation to see if your income and expenses balance out, alongside determining your savings.

Document Your Expenses, Both Fixed and Variable

No matter if you get your bill in paper form from your local grocery, or in a digital form online, the beauty of having a personal budget spreadsheet is that you can immediately add it to your expenditure category in a given month. This is a habit you should lean into!

Focus on Your Savings 

Income – Expenditures = Savings. Given Excel’s cascading principle, once you create your expenditures and income categories, it is simple enough to create a savings cell. Remember, once you add the “=” symbol into any cell, you enter the formula mode, which allows you to perform any math operation.

Color-code your savings cells, so you are always aware of how close or far you are to saving money for the things you want.

Emphasize and color-code your savings cells, so you are always aware at a glance how close (or far you are) to saving  money for the things you want.

Analyze Your Spending Habits — Keep All Your Receipts

We often go through life in a haze of daily work and entertainment, not keeping track of things. Saving all of your receipts and crunching the numbers at the end of each month may shock you. One often finds that food indulgence alone accrues costs many times higher than expected. 

Therefore, it is vital to reveal all of your habits via receipts, both online and paper.

Set Goals, Both Short- and Long-Term

 It has been shown that gamifying an experience adds motivation and mental clarity. Set an amount that you wish to save and take a look at your monthly expenses. Is that number achievable in a reasonable time-frame? If not, what can you do about your monthly budget?

Choose an Easy-to-Use Budgeting Tool

Although it doesn’t take more than half an hour to grasp the power of Excel or Google Sheets, there are alternatives for people who want off-the-shelf money management solutions. Pocket Guard will serve you well with its simplicity and breadth of options, while You Need a Budget (YNAB) allows you to go into deep detail of every aspect of budgeting.

Additionally, consider using your bank account’s budgeting tool. Many banks have included more advanced budgeting features as a part of their e-banking services.

Pick Your Program or Select a Template

Most people would be more than satisfied with the above-mentioned apps, but you may have specific variable expenses. In that case, it would be best to download an Excel template and tweak it to your liking. Microsoft Excel will remain the most flexible budgeting software you can imagine, as it is based on cell-based math operations with its infinite variations.

How Often To Balance Your Budget?

Balancing your budget is an ongoing process. Either with an app or with an Excel budget worksheet, it would be best to input your receipts and income streams the same day you receive them. This makes the budgeting second nature, just as productive and healthy as brushing your teeth.

Conclusion 

“Money isn’t everything,” people often say. Sure, it’s not everything — but it gives you freedom and options. Once you hit a certain point, you’ll realize that true success and fulfillment is about living a great life. 

With this in mind, you should prioritize managing your resources so you can live your life—and live it well. Whatever budgeting tool best fits you, the insights it will provide you with will become a key ingredient in taking control of your life.

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