10 Simple Steps for Creating a Budget in Excel

A budget is the foundation of your financial health.  Want to know if you can afford a vacation?  How much you can save for retirement?  How you can pay off your mortgage faster? These questions can all be answered if you have a budget.

What is a Budget?

 A budget is a listing of your income and the amount you can afford to spend on your expenses and put into savings.  Income includes your wages and returns you get from your investments.

How to Create a Budget in Excel

1. Identify Your Financial Goals

In my case, my primary financial goal is to make sure I enjoy my retirement.  For many of you, your goals will include down payments on houses, refinancing student loans, college for your children and funding retirement.

How to Create a Budget in Excel

2. Determine the Period Your Budget Will Cover

If you budget for a month, it is critical to remember to add expenses that you don’t pay every month as you’ll need to set aside money in short-term savings to have the money when those expenses become due.

How to Create a Budget in Excel

3. Calculate Your Total Income

Figure out how much Form W-2 or Form 1099 income you’re going to earn during your budgeting period (1099 vs. W-2 can result in different tax situations).

How to Create a Budget in Excel

4. Begin Creating Your Excel Budget

Build a personal budget worksheet for tracking your expenses.  Consider using the free Excel budget template provided in the email signup above.

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