Personal Budget Spreadsheet – How To Make It Work For You

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Let’s clear one misconception – creating a budget spreadsheet won’t make you any more money or make you rich. What it does is provide a framework to organize and track your finances.


Ideally you would want to maintain a budget for six months to a year to get an idea of your spending patterns. You want to adjust the spreadsheets as your estimates get better.

Once you have a handle on your budget sheet, you will have a good idea of what you are making and more importantly spending. You can then take options to determine what you can realistically cut back on so you save more and spend less.

The way you get rich from budgeting is that you increase your savings by identifying where you can cut back on AND then investing that money. Just keeping a budget will not make you wealthier in the long term

For people new to budgeting, I suggest using Microsoft Excel and having a simple spreadsheet where you have an Income and Expense section. Income is how much you or your house hold regularly earn every month from various sources (salaries, dividends, interest etc). Expenses should be your fixed expenses (like rent, insurance) and discretionary expenses (groceries, entertainment, holidays etc). The key thing is to set a budget amount for your discretionary spending and then track the actuals on a daily basis as this is the expense type you can most control and cut back on. You should adjust the budgeted amount every few months to be realistic or as a target you want your actuals to get to.

Once you get more advanced with budgeting or have more complicated expenses (like those from running a small business) and want to integrate your finances with your taxes, I suggest you look into a software package. I have provided my recommendations below for packages that cost less than $50, but you should pick one that you feel comfortable with – most have a 30 day free trial period.


I have kept a budget in some form and system for over 5 years and it works. I have a good idea of what my expenses are and it gives me control on what I spend – I am still trying to work on my wife – but she can’t argue with the numbers too much!

 

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