How to Use Excel to Keep a Budget

Personal computers have become great tools for managing budgets, bills and bank accounts. With software like Microsoft's Excel program, it is possible to create and store a budget. Use the basic spreadsheet tools to categorize expenditures and income to balance your personal or business finances.

Instructions

Difficulty: Moderate

1. Open a new worksheet to create your budget. As your budget grows to include different features, you can add more worksheets. There's no limit to the number of worksheets you can add to a single budget within Excel.
2. List all your sources of monthly income in one column. Include money you make through jobs and investments. Special sources of income, such as stock dividends, tax refunds and gifts, should also be included as income. Use the "sum" button to total the different numbers in your income column.
3. Create a column for all of the fixed expenses you'll have each month. Fixed expenses are those bills that are the same for each month. This column should include mortgage payments, credit cards, utility bills and regular expenses related to your car.
4. Subtract your total fixed expenses from your total monthly income. This will clarify how much money you'll have to spend on the other necessary monthly expenses.
5. Build a column for your variable monthly expenses. Variable expenses include the cost of groceries and entertainment, as you can spend more or less on these things as your budget fluctuates. The figures you assign to variable expenses should be estimates based on previous months' expenditures and can be adjusted to match the amount of money you have left after fixed expenses have been subtracted.
6. Subtract your total variable expenses from your monthly income, adjusted for fixed expenses. The amount of money left over will indicate how much discretionary income you should have each month. It's important to design your budget to include a comfortable amount of discretionary income to cover unexpected expenses.
7. Create a calendar within Excel to keep track of the dates when bills will come due. Also, include the days when paychecks are expected to clear your account, so that you can manage your bill schedule accordingly.
8. Download a budget template for use in Microsoft Excel. Vertex42 has a free Excel template available through its website (see Resources below).

Tips & Warnings

• One of the benefits of using Excel to create budgets is the flexibility you'll have with customizing the presentation of information. It's simple to add cells to your spreadsheet, giving you the chance to keep detailed notes about purchases and expenses.

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