Creating an Excel Budget

Creating a budget is the first step I outline on my step-by-step guide and I can’t stress how important having a budget is. Here I’ll walk through creating an excel budget.

There are some different software/applications you can use when creating a budget but for this post I’m going to focus on good old excel. If you don’t have excel, you can use google sheets for free.  I highly recommend using google sheets because then it’s available on the drive. That means you can carry your budget and any other important spreadsheets with you at all times!

Creating an Excel Budget

First, you need to figure out how much you have to spend.

 Send me an email if you’re interested in exact numbers.

Here I just put the gross monthly income (annual salary/12) on line 2 and subtracted the IRA contribution to get the “before tax” number. Then I multiplied by .76 (assume 24% tax-again, random) to get the after tax number (by looking at your pay stub, you can find the exact tax %).

Then you list your monthly expenses. To do this I use the excel function =SUM(B9:B21) in cell B22 to add up your total monthly expenses.  I list my expenses in a rough estimate of importance. That way, if you need to tighten things up, you can start looking at the bottom first.

Next, take care of non-monthly expenses. This is a little trickier:

It’s easiest to estimate how much I spend on “once in a while” things in a year, and then divide by 12. This gives you the amount you need to budget each month for these things. For example, even if you don’t get an oil change every month, it is important to budget for it so when you do need it, you have the money available.  To do this I used the excel formula =(B25/12) for cell C25 etc. Then use the same =SUM(C25:C28) To get the total.

Now put your two expenses together:

Then subtract your expenses from your Income:

This is how much you have left over to throw at high interest debt, or in an emergency fund!

If you’re interested in creating a budget using software other than excel, check out my posts about using YNAB or Mint!