Using Excel to create a household budget is an effective way to track and manage your finances. Excel is a powerful and effective tool that allows you to visualise your income, spending, emergency savings and opportunities to reduce your spending.
In this guide, learn how to create a budget, step-by-step in Excel, to help you take control of your finances.
How to Make A Budget In Excel
1. Gather your information
First, you need to gather all of your financial details. This includes:
Your income:
- How much money you make each week
- Any allowances
Your expenses:
- Debt repayments
- Food expenses
- Monthly subscriptions
- Essential bills – think water, gas, electricity rent
- Travel expenses
2. Open Excel and set it up
Now it’s time to create a budgeting spreadsheet in Excel.
Open Microsoft Excel on your computer and start a new workbook. You’ll see a blank sheet.
Rename one sheet as “Budget” and another sheet as “Summary.” This will make it easier to keep everything organised.
You can also get inspiration from these free budget templates or download this Excel spreadsheet template and just fill in your details.
3. Track your income & expenses
In the “Budget” sheet, make a table with two columns. In the first column, write down any income from your job and any allowances you receive. In the second column, write down how much money you get for each source.
Below the income table, create another table with two columns. In the first column, write down different categories for your total expenses, like food, transportation, entertainment, and so on.
In the second column, write down how much money you think you’ll spend in each category. Use your recent banking transactions as a guide — it’s easy to underestimate things like groceries or fuel expenses.
Your final budget should include a buffer to save a little each pay cycle for when emergencies arise. An emergency fund can give you peace of mind to navigate the unexpected, like a car breakdown, a vet bill or time off work.
4. Let Excel do the maths
In the “Summary” sheet, create a table that mirrors the one in the “Budget” sheet. In the last row of the “Budget” sheet, use the formula “=SUM” to calculate the total income and expenses. Excel will automatically update this sum as you adjust figures in your budget.
5. Visualise your budget
Excel has some cool features that can help you see your budget visually. You can use charts and free budget templates to show how much money you’re earning and spending in each category. It makes it easier to understand where your money is going and where you might want to make changes.
Visual representations help you understand your day-to-day finances and empower you to manage your money. You can personalise your budget with colours and styles, and even make a joint budget with your partner.
6. Set savings goals
Excel can also help you track your savings goals. Create a section in the “Budget” sheet where you can write down how much money you want to save. Use a formula to calculate how much you need to save each month.
For example, if you want to save $10,000 in a year then the formula you would type into your cell is ‘=10000/12’ which would mean you would have to save $833.33 per month. This will help you stay motivated and monitor your progress over time.
7. Update and review
Remember to update your budget regularly. Whenever you spend money, write it down in the “Budget” sheet. This way, you’ll always have an accurate picture of your finances. Review your budget regularly to see if you’re sticking to it and if there are any areas where you can save more money.
Once you’ve been implementing your budget for a while, take some time to analyse how well you’re sticking to it. Look for any areas where you may be spending more than you planned or areas where you have extra money left over.
This analysis will help you make adjustments to your budget, reallocating funds to align with your evolving priorities and financial goals.
Key Tips to Help You Save
Continuously explore opportunities to save money within your budget. Look for ways to reduce expenses, such as finding cheaper alternatives for certain products or services, comparing prices before making purchases, or cutting back on non-essential items. The more you can save, the more you’ll have to put towards your savings or other important financial goals.
Managing your expenses easier with Red Tree Finance
By organising your income, expenses, and savings, you’ll have a better understanding of your finances. Planning budgets help to outline financial goals for your future, so that you have enough when Christmas comes around, or any other financial goals you have throughout the year.
At Red Tree Finance, we offer cash loans up to $5000 so you don’t have to stress about financials. You can receive an instant loan online with the money in your account on the same day. If you have any questions or need assistance, please don’t hesitate to contact us online.
Frequently Asked Questions
How do I create a simple budget in Excel?
To create a simple budget in Excel, write down your monthly income and expenses in separate columns. Once you have these two figures, take them away from each other which will show you how much money you have left each month. Take this opportunity to see if there is any way to cut back on expenses.
What is the formula for a budget spreadsheet?
The formula is “=SUM(total funds/total expenses)’. This will help you find how much money you are earning compared to what you are spending and help you find a balance.
What is the 50/30/20 budget rule in Excel?
The 50/30/20 budget rule in Excel is a budgeting strategy to help you understand your spending. 50% of your income goes to “needs”, 30% of your income goes to “wants” and 20% of your income goes to savings.
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The information provided in this blog is of a general nature and is provided without considering your specific objectives, financial situation, or needs. It is intended for informational purposes only and should not be relied upon as financial, investment, or other professional advice.
Before making any financial decisions or taking action based on the information presented, you are strongly encouraged to assess its appropriateness in light of your individual circumstances. Red Tree Finance does not intend to provide personalised financial advice, and you should seek independent financial, legal, tax, and other relevant advice tailored to your unique situation.