As someone who spends a lot of time in front of the computer, it was natural that I wanted to manage my finances digitally. Yet starting a budget can be tricky if you want to do it online and not with the help of pen and paper, but how to make a budget in Excel? The idea of not having loose paper with all my notes around my desk motivated me to start creating Excel spreadsheets for that purpose.
With the ability to have all of my notes in one place, review all of the historical information with ease and not have to worry about losing it all in case of a coffee spill, I started to recommend this method to all of my friends. So, if that sounds like something you want to do and you are wondering how to make a budget in Excel, read on!
What Is a Budget?
A budget is a document, which can be in either physical or electronic form, where you summarise all of your income and expenditure and plan your spending for a period. Your planning period is usually connected with how often you receive your income, with the most common budget being a monthly period.
You can create a personal or family budget, depending on your situation. All budgets have unique budget categories that you can use when making your budget Excel spreadsheet from scratch.
Why Should You Create a Budget in Excel?
Creating a budget has many advantages. It helps you gain control of your finances by analyzing where and how much money is coming in and where they are going out as expenses. Excel can help you with your budgeting exercise by allowing you to quickly add everything up and easily analyze your budgeting habits using its features.
By creating a budget in Excel, you are able to have everything in one place, store it securely on your computer without having to worry about losing physical copies, and you can access it on several devices, which means you always have access to it.
What Type of Budget Template Is The Best for You?
The type of budget template you opt for will largely depend on your current personal situation and your preferred method of planning your finances. Budgeting is all about being intelligent and intentional with spending your money and planning ahead to ensure you reach your financial goals and expectations.
Choosing the best budget templates for you will depend on what budgeting type you select, why you want a budget, your current financial situation, your financial goals, the time will take you to accomplish your financial goals, and how much time you can devote to your budget.
So here are some of the best types of personal budget you can try:
- 50/30/20 Rule Budget
- 60/30/10 Rule Budget
- Envelope Budget Method
- 70/20/10 Rule Budget
- Zero-Based Budgeting
- 50/40/10 Rule Budget
- Reverse Budget
- 30/30/30/10 Rule Budget
- Extreme Budgeting
- 60/40 Rule Budget
- 80/20 Rule Budget
How To Create a Budget in Excel From The Scratch?
If you are wondering how to make a budget spreadsheet from scratch, we have step-by-step instructions to follow.
Step 1 – Open Microsoft Excel
Open your Microsoft Excel, and from the left-hand side menu, go to “New” and choose “Blank Workbook.” This will create a new blank workbook sheet where you can create your own budget from scratch.
As you can also see, Microsoft Excel offers some pre-made budgeting templates and other templates as part of the Microsoft subscription, which you might want to try exploring.
Step 2 – Creating Blank Workbook
Once you select a “Blank Workbook,” you will be met with a screen like this one. You are all ready and set to start creating your budget from scratch. We aim to show you how to create a simple budget template in Microsoft Excel; however, the functionality allows you to customize it in whichever way you want it, including colors, graphs, formulas, or even rules.
Step 3 – Add Your Income
Next, set up the income part. On cell A2, type in “Income” to recognize this is the section for the income and make it bold to differentiate it (you can make text bold by clicking on the cell and selecting “B” on the top panel).
Then proceed with your income category set-up, where you will list all of the income sources in cells A4 to A6 and add a total line. Then, on the horizontal part, you can type categories such as Payday, Expected, Actual, and Difference, in which you will indicate when you expect the income to arrive, what were the actual income and the difference between the planned and actual figure.
Step 4 – Adding Formulas To Automate
A distinctive feature of Excel that should be used is the formulas that allow for everything to be automated. Doing so will enable you to change the figures without worrying about adding everything up. For example, you can use the formula of =SUM(), which sums up specified cells.
As you continue to fill the income tab, you use the =SUM() formula to sum up parts of your expected and actual income. To use it, type in =SUM( in the cell, then highlight or type the cell coordinates you want summing up, in this instance, it is D4:D6 (stands for range), then end the formula with closing bracket “)” and press Enter. Repeat the same for the other cells by changing the range.
=SUM(D4:D6) (Change letters and numbers to the ones you need)
For the difference column (where you want Excel to show you whether you have received more or less money than expected), you can use a simple subtract formula. This will show the difference between the two cells. In this instance, we took away the Actual figure for Side Hustle cell D5 from the Expected figure of Side Hustle in C5.
=D5-C5 (Actual – Expected) (Change letters and numbers to the ones you need)
Step 5 – Add Your Expenses
Once you have added your income, you can add your expenses. For an easier view, I have done this just below the income part, but you can do that in a different tab too.
Just as with the income part, you can create a budget column, an actual column, and the difference between the two. This time you will need to reverse the subtract formula as if you spent less than what you have planned, then you have saved money, whereas in the case of an income if you received more, you would have now more to spend.
=C16-D16 (Expected – Actual) (Change letters and numbers to the ones you need)
When setting up your expenses, you can follow the format from above or come up with your own. When adding different expenses, you might also think of more specific costs that you would like to add or take from that list – the choice is yours.
When it comes to budgeting in Excel, there is no right or wrong way to do it. You can get as creative as you want.
Step 6 – Add More Sections
As you create your budget, you can add more applicable sections. In this case, I added savings and investments, and to make sure I am on track with those expenses, I have added the difference column too.
They need to work for you, so be as detailed as you want. The most important thing is to create something that you will be able to follow and will help you when budgeting.
Step 7 – Final Figures for The Budgeting Period
After you have added all your sections to your budget, sum up all the figures. Remember the summing up steps we have done before? You can now easily reference them back in your summary section. To reference a cell, simply type “=”, click on the cell you want to reference and press enter. This brings the referenced value to your current cell and updates the other cell changes.
=C29 (Change letters and numbers to the ones you need)
In this instance, I went for a quick overview, bringing back my planned and actual figures into my overview sections to compare the two. This is because you want to work out the money you would have left over, so you would subtract All Outgoing Expenses from Income.
=C40-C41-C42-C43 (Change letters and numbers to the ones you need)
This would then allow you to create a Difference column in which you can compare your budgeted sum against the actual money that is left over. A positive balance, in this instance, means that you spent less than you planned, while a negative would indicate overspending.
And voila – here you have a basic monthly budget that you can use to keep up with your finances.
Optional Steps When Creating a Budget in Excel
The above instructions are meant to show you the basics of Excel and how to create a budget. However, there is a number of options you can use to make your Excel more eye-friendly, and you can take more out of it for a deeper analysis of your spending. Below I list a number of helpful tips that you can start using.
Tip 1 – Use Percentages
To work out a percentage of, for example, individual spending compared to overall spending, you can type “= select an expense / select a total expense cell” and press enter. To then show a percentage rather than a decimal, press on the cell and press the % button in the top options bar.
=C12-D12 (Change letters and numbers to the ones you need)
Tip 2 – Create a Graph
You may wish to use visual representation to see where most of your expenses are going. To do that, you will need to highlight the cells you want to use for the graph.
- First, highlight the name row
- Then hold Ctrl on Windows computers or Command on Mac and highlight the other row
- Then go into ‘Insert’ options on top of the option bar
- Choose the type of graph you want; in this instance, we are going for a ‘Doughnut’ graph which is found in the circle charts
- Press the desired choice
Excel will automatically create a graph for you based on the data you have highlighted. In addition, you will be able to change the title by double-clicking on “Chart Title” or access more advanced options by double-clicking anywhere on the graph.
Tip 3 – Change The Color of The Cell
If you would like to add some color to your cell, you can highlight the cell or multiple cells at once. Go into the “Home” options, and press the little arrow next to the bucket of paint icon. This will pull up the color menu, showing you lots of different color options you can add to a cell.
Tip 4 – Change The Color of The Text
Alternatively, if you want to change the font color, highlight a cell, and under the options under “Home” press a little arrow under the “A” icon. This will pull up a menu color where you can select the desired color.
Tip 5 – Multiply
For multiplying cells in Excel, you should type in “= cell you want to multiply * cell you want to multiply by” and press Enter. You can also type in any numbers, and Excel will do the math for you, e.g., “=5*5” and press Enter to get a result of 25.
=B49*B50 or =5*5 (Change letters and numbers to the ones you need)
Tip 6 – Divide
For dividing cells in Excel, you should type in “=cell you want to divide / cell you want to divide by” and press Enter. You can also type in any numbers, and Excel will do the maths for you, e.g., “=100/10,” and press Enter to get the result of 10.
=B49/B50 or =100/10 (Change letters and numbers to the ones you need)
Budget Excel Alternatives
You can also check some budget Excel alternatives like printables, digital fillable documents, or budgeting apps.
Printable versions of the budgets are for those who like to get a pen and paper in front of them. After printing a budget, you can fill out your income and expenses in a prespecified space. You will then need to add all of your figures using a calculator and update the sheet as you go through the month.
Budgeting Digital Fillable Documents
Another alternative to using an Excel template would be to opt for a fillable document that can be used with the aid of a free PDF file reader like Adobe Reader. This will allow you to fill out the prespecified fields, which will automatically sum up the values in different columns. This means no need for a calculator, and you are able to save everything on your laptop, so there is no wasted paper.
If you prefer to use your phone for budgeting always to have it at hand, you can opt for one of the apps offered on the iOS App Store or Google Play for Android. You have apps like Mint, Goodbudget, or Honeydue to track all your expenses, debts, and investments.
Common Questions About How To Make a Budget in Excel?
These are the most common questions about how to make a budget in Excel:
Does Excel Have a Budget Template?
Yes, Excel software provides various free and paid templates in its template library. However, even with some of the free templates, you might require a Microsoft subscription to access them.
What Is The Best Budget Template in Excel?
We believe that the best budget templates for Excel are the ones we provide to our readers since we have many different budgeting style options and have tried them extensively.
How Do I Create a Budget if I Don't Have Excel?
Other alternatives to not using Excel for a budget include a simple pen and paper approach, creating one using a Word document, using a digital fillable document, or opting for a mobile-based app. You can also use alternative software providers like Google Sheets, which provides similar functionality to Microsoft Excel.
Conclusion on How To Create a Budget Spreadsheet
Using Excel for your budgeting needs can be an easy, quick, and affordable way of gaining control of your finances. With the use of templates, you do not require an accounting background to use Excel for your budgeting needs.
If you are unsure how to make a budget in Excel, opt for a template that will allow you a head start using a digital spreadsheet for your budgeting necessities. With easy-to-follow instructions and set-up fillable cells, you can budget with all the work done for you in the background.
Michael launched Wealth of Geeks to make personal finance fun. He has worked in personal finance for over 20 years, helping families reduce taxes, increase their income, and save for retirement. Michael is passionate about personal finance, side hustles, and all things geeky.