If you want to manage your budget with a spreadsheet, here’s a step by step process on how to do it. I use this method every month, and it works phenomenally. It is very easy to not only see my budget and see my actual expenses, but also see how well I am following my budget.
Before you start here, let me strongly suggest that you start making all of your purchases with a debit or credit card. It’s very easy to go to your online account and look at your monthly transactions. On the other hand, it is very difficult to save cash receipts or write down the exact amount of what you are buying every time you spend money. Using a card responsibly is vital, not only to your budget, but to managing your finances at an overall level.
The first step is to download the budget template. Then you will need to make some changes to customize the budget to work better.
Here are the changes you will want to make if you want your spreadsheet to look like mine:
- Look at the categories on the left side and see if you want to make any changes. Some changes I make are
- Add “Nightlife” to the Entertainment Section
- Add “Cash” to the Entertainment Section so you can track your cash withdraws
- Add “Social Security” and “Medicare” to the Obligations section
- Make two copies of the worksheet and rename them “Budget – Plan”, “Budget – Actuals”, and “Better or Worse
- Make changes to cells in the “Better or Worse” worksheet
- B4 =’Budget – Actuals’!B4-’Budget – Plan’!B4
- B7 =B5+B6 –> Fill through column M
- B8 =B4+B7
- C8 =B8+C7 –> Fill through column M
- B13 =’Budget – Actuals’!B13-’Budget – Plan’!B13 –> Fill through column M, and down to the bottom of the category
- B24 =’Budget – Plan’!B24-’Budget – Actuals’!B24 –> Fill through column M, and down to the bottom of the category. Use this formula for the rest of the expense categories
- Now you are done formatting. Enter your Budget into the Plan and get ready to enter your actuals at the beginning of next month
Now that the spreadsheet is ready, the best way to make your plan is to look at what you’ve been spending in the past. You can go back through your old transactions and look at where you’ve been spending money, but you don’t have to. You could also just think about it and budget your spending without looking at past data. The trick is to make the targets lower than what you are spending now.
Once you’ve set your budget, just update the “Budget – Actuals” tab every month and use the “Better or Worse” tab to see how well you are following your budget.
It’s that easy. You’re on your way to becoming a thousandaire.