Building a Budget in Microsoft Excel

Budgeting is a fundamental skill, and Microsoft Excel makes it very simple. Many people fear that budgets built in Excel will be complicated, but they are usually very simple to do. Here are the steps to build a very simple budget in Excel that will help you manage your money. I’m going to assume this is a monthly budget, but it works for any time period or, with simple tweaks, budgeting for a project.

Get Started

Open Microsoft Excel. Pick a cell to start with. I usually leave room in the corner, so I’ll suggest B2. That is the second column (B), second row (2). Click there and type “Income” without the quotation marks. Finally, hit enter. the word “Income” appears in the cell. To the right, in cell C2, write “Expenses” and in D2 write “notes.”

Start Inputting

Now, beneath income, write each of your monthly income streams down in terms of dollars. For instance, if I had a babysitting job that provided me $400 per month in income, in B3 I would write “400.” I would also want a note telling me what that row meant, so in D3, I would write “Monthly Babysitting.” For each income stream, write in a new row and put in the number and note.

Once your income is in, add expenses. Don’t use the same rows as income. For instance, if income used rows B3 through B7, I would add my first expense in C8. Again, add a note for each expense. I estimate some variable expenses like groceries and gasoline, always over-estimating and rounding up so that I don’t run out of money later!

Now you should have a sheet with income and expenses listed, along with notes for each entry. Now it is time to let excel do some magic!

Use Equations to Automate It

Excel is made to automate many repetitive math tasks, and this is where the spreadsheet will shine. Suppose my spreadsheet is now full, and B3-B7 have incomes, and rows C8-C19 have expenses. First, I’ll give myself some room, and go down to row 25. I leave the extra space so I can easily add stuff later. Leave about 5 blank rows as a minimum.

I’ll start by writing “Total Income” in row B24. Then, I’ll click on cell B25 and type “=Sum(” without the quotes of course. The ‘=’ tells Excel that I want it to do math for me. ‘Sum(‘ is to beginning of the sum command, which adds cells together. All I need to do is tell it what to add up. Since I want total income, I’ll type “B3:B23)” and hit enter. The ‘B3’ is where to start, and the ‘:B23’ tells it to go up to B23, adding everything in-between. The ‘)’ finishes the sum command, and now it should have added up all the income numbers. If you only have one income, it should be that number.

I’ll go to C24 and write “Total Expenses” and then put “=Sum(C3:C23)” in C25. Again, the sum of expenses appears. Finally, I’ll write “Remaining Savings” in D24, and type “=B25-C25” in the cell and hit enter. It will now calculate how much money I have left over. If it is negative, I’m going into debt to meet my expenses, which is bad.

Experiment

Excel will automatically update things as you change them. Try it out. Change one of your expenses or add a new one in a blank row. The final row will automatically update to reflect your changes! Now you have gotten a budget made, and it is flexible to meet your changing demands without excessive calculator work. Congratulations, and Happy Saving!