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How to Create a Budget using Excel

Aug 10, 2021 | Finance

Thinking about creating a budget in Excel but not sure how? You’re not alone. If you don’t use Excel regularly, creating a budget using the program can be quite a daunting task.

Thankfully, you don’t need to be a financial expert to learn the basics of budgeting using Excel. Which is why we’ve created a step-by-step guide for budget making on Excel.

1. Set financial goals

First and foremost, you’ll want to identify your personal financial goals. Ask yourself what you would like to achieve? Perhaps you’d like to start saving for retirement, or maybe you want to kick-start your emergency fund. Whatever they are, make sure you have a clear idea of those goals.

2. Establish your budget period

Will your budget cover a month-to-month view or an annual view? Determine the time period in which your budget will be covered. It is critical to remember that if you do choose a monthly budget period, to add expenses that you don’t pay every month, as you’ll need to set aside money in your short-term savings to have that money when it is due.

3. Calculate your total income

Determine how much income you will have to work with during your budget period. Refer to T4’s, W2’s or additional tax documents to determine this amount.

4. Create your budget

You can create your personal budget spreadsheet on your own, or, if you aren’t comfortable using Excel yet, you can find various different templates to suit your needs on the internet.

5. Enter all your debit and cash transactions into your spreadsheet

Use your online banking statements to enter all your debit and cash transactions into your Excel spreadsheet and identify the types of expenses.

6. Enter your credit card transactions

You’ll also want to do the same for your credit card transactions.

7. Calculate your total expenses

Add up all of your expenses from 5 and 6 by type of expense. The total will tell you two things: where you have been spending your money and how much you have spent in total.

8. Compare your income to expenses

Compare your expenses to your income. This step is critical so you can determine if your expenses ar3e exceeding your income. If it is, you will have to increase your income or cut back on expenses where necessary.

9. Identify expenses you can cut-back on

Identify any areas where you think you can manage to cut-back on. Perhaps you pay for multiple different streaming services a month, and can make due by canceling one of your subscriptions. This will leave you with a bit more wiggle room to work with.

10. Monitor your budget regularly

This is a critical step in creating your budget. You’ll want to make sure that you are diligent in monitoring your budget and not overspending. Have a weekly check-in on your budget to ensure you’re staying on track!

A budget is great for anyone who has short- and long-term savings goals. Whether you want to save for a vacation or a mortgage down-payment, a budget will lay the foundation for your financial health and it doesn’t need to be difficult!