How to Make a Budget Spreadsheet

• A budget spreadsheet simplifies tracking income and expenses, aligning daily spending with overall financial goals.
• Key steps include choosing a user-friendly tool like Excel^® or Google Sheets^®, setting up detailed budget categories, and deciding on a tracking period (monthly, quarterly, yearly).
• Effective budget management involves inputting actual financial data, utilizing formulas for automatic calculations, and comparing planned versus actual spending.
• Regular updates to the budget spreadsheet are crucial for adapting to financial changes and staying on track with goals.

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A budget is a powerful tool that helps you make informed spending and savings decisions. It provides the freedom to spend with confidence, knowing your actions align with bigger-picture financial goals.

Tracking income and expenses by hand may seem like a hassle, but a well-designed budget spreadsheet makes it easy.

Knowing how to make a budget spreadsheet that’s customized to your needs allows you to effectively track finances without the need for expensive software or specialized financial knowledge.

In the following guide, we’ll walk through the process, from selecting the right platform to categorizing expenses and monitoring your progress. It’s an easy solution you can implement right away.

What Is a Budget Spreadsheet and How Is It Used?

A budget spreadsheet is a simple tool for organizing and tracking income and expenses. It provides a clear view of money coming in and going out over a set period of time, typically weekly or monthly. Assigning categories to each income and expense makes it easy to identify trends and uncover potential savings opportunities. Pre-planning weekly or monthly spending also helps ensure there’s enough left over to allocate toward saving for short-term and longer-term financial goals.

Regularly updating and reviewing a budget spreadsheet turns it into an active financial management tool. It helps you spot patterns, such as seasonal increases in utility bills, and proactively adjust the spending and savings goals to reflect changes in income, expenses, or financial priorities.

Choosing the Right Tool for Your Budget Spreadsheet

There is a wide range of tools and software for creating and managing a budget, but how do you make a budget spreadsheet that works well over the long term? To choose a platform that suits your needs, consider the following factors:

• Ease of use: The best budgeting tool is one you use consistently. Look for an option that’s easy to set up and navigate. This will help ensure you’re comfortable making regular updates.
• Accessibility: Consider whether the tool is accessible across devices, such as your phone, tablet, or computer.
• Cost: Free options often work as well as paid tools, allowing for simple budget tracking without additional expense.
• Advanced features: Consider whether the tool offers advanced features such as customizable categories, automatic calculations, and charts and graphs to enhance the budgeting experience.

Popular Spreadsheet Tools: Microsoft Excel and Google Sheets

Microsoft Excel^® and Google Sheets^® are two of the most popular spreadsheet programs. Both are user-friendly and offer a range of budgeting features.

Microsoft Office Excel

Excel, the spreadsheet tool included in Microsoft Office Suite^®, is ideal for those who prefer a detailed budgeting approach and want customizable options. It comes with a range of budgeting templates, allowing for quick, easy setup without the need to manually create rows, columns, and formulas. You’ll find options available for everything from a standard household budget to budgets made specifically for planning events or tracking holiday spending.

Google Sheets

Google Sheets is a user-friendly option that is free to use with a Google account. It includes several pre-made budget templates, including monthly and annual budgets. Sheets are stored in Google Drive^®, a cloud-based platform that allows you to access the budget from wherever you are. This ensures the budget is available from your computer, tablet, or smartphone.

The Advantages Of Using a Premade Template

Microsoft Excel and Google Sheets both offer the ability to build a budget spreadsheet from scratch. However, choosing a pre-made budget template offers a ready-made structure, saving time and allowing you to focus on entering financial information right away.

The templates are designed with the user experience in mind, offering clear categories and useful formulas. While they provide a ready-to-use foundation, they’re often fully editable, allowing for small changes to better align the budget spreadsheet with your personal financial goals.

Setting Up Your Budget Categories and Time Frame

Organizing financial transactions into relevant categories helps you easily identify spending habits and make adjustments to help maintain a positive cash flow. The number of categories used depends on your situation, goals, and personal preferences. Begin with two primary categories: Income and Expenses. Then, break these down into relevant sub-categories.

Income Categories

When tracking your income, you may include categories such as:

• Salary
• Bonus
• Rental income
• Investment income
• Freelance income

Expense Categories

There are several options for tracking budget categories. Depending on your goals and personal preferences, you may choose broad categories or track with greater detail.

General vs. Detailed

General expense categories may include items such as:

• Mortgage/rent
• Utilities
• Groceries
• Dining out
• Credit card payments
• Pet expenses

If you prefer more detail, consider tracking individual bills by creating another layer of sub-categories. For example, the utilities category may include:

• Electric bill
• Water bill
• Heating bill

While detailed categories take more time to set up initially, the additional information can help you identify areas where you could cut costs.

Fixed vs. Variable

You may also categorize expenses based on whether they are fixed or variable. For example, fixed expenses include rent or mortgage, insurance premiums, car payments, and other expenses that remain fairly consistent from month to month.

Variable expenses include items that change from month to month, such as dining out, hobbies, and shopping. Since variable expenses are typically easier to cut if necessary, adding this category can help with financial evaluations.

Savings and Investments

Finally, consider adding a budget category for savings and investments. This may include:

• Contributions to savings accounts
• Emergency fund savings
• Retirement account contributions
• Contributions to other investments

Budgeting for savings and investments helps prioritize these goals, ensuring you’ve set aside money for planned contributions rather than relying on leftover funds.

Determining Your Budget Period

Once you’ve determined key categories, decide how frequently to track, review, and update the budget. Many individuals use monthly or weekly tracking. However, depending on your needs, you may track more or less frequently. Quarterly, annual, or multi-year tracking can help with bigger-picture goals, while weekly or daily tracking helps you stay focused on short-term, specific goals.

You may find it helpful to combine several time periods, for example, using an annual budget to gain clarity on long-term trends and habits while tracking more frequently to allow for real-time adjustments.

Crafting Your Budget: Entering Income and Expenses

Now that the spreadsheet is ready, it’s time to input your financial information. While entering data and crunching numbers may not feel exciting, keep in mind that the spreadsheet will perform all of the calculations almost instantly — turning a potentially tedious task into a quick and satisfying experience. Here’s how to get started.

1. Input Your Data

Since you may not remember all income and expenses offhand, begin by pulling out your last few bank account and credit card statements. Enter each deposit and expense as a separate line item and choose the correct categories.

2. Utilize Formulas

Once you’ve entered all the data, use formulas to quickly perform key calculations, such as totaling expenses, calculating the difference between your income and expenses, or averaging spending to find monthly patterns.

If you’ve used a budget spreadsheet, the formulas are likely already included and will run automatically. Many spreadsheet tools also include pre-made formulas, which you can add for additional analysis.

3. Compare Planned vs. Actual Income and Expenses

Consider setting up separate columns for your projected and actual income and expenses, plus a column for the variance between these figures. This setup offers clear insights into how closely you’re meeting financial targets and areas that need attention. If this is not part of the premade template, add formulas to automatically complete the calculations.

Regularly Monitoring and Updating Your Budget  

Many situations can affect your budget, from a pay raise to a change in expenses or a shift in financial goals. It’s important to regularly review and update the spreadsheet to ensure it remains an effective financial tool. During the review process, make changes as needed so it continues to accurately reflect your financial situation.

Regularly reviewing your budget spreadsheet also helps highlight spending patterns, identify areas for savings, and ensure your finances remain in alignment with short-term and longer-term goals.

Generally, a monthly update is sufficient. However, if you’re actively working to reduce debt or meet a short-term savings goal, weekly updates may prove more beneficial.

Empower Your Personal Finance with a Custom Budget Spreadsheet

Creating a budget spreadsheet is an important step toward taking control of your finances. The key is to start simple, stay consistent, and make adjustments along the way.

Once you’re comfortable with the process of regularly reviewing and updating the spreadsheet, it becomes a powerful tool that guides spending and savings decisions, helping you achieve bigger-picture financial goals.

For more information and financial management tips, read PNC Bank’s Personal Finance Insights or visit the Budget Worksheet. Here, you’ll find various topics designed to help you gain financial knowledge and empower your financial future.