Surely, you can use dozens of tools to create your budget and savings goals. However, before investing in complicated tools, you should try the easy tools: Google Sheets and Microsoft Excel. This article will give you details on how to budget using Google Sheets and Microsoft Excel.

How to Budget Using Google Sheets and Microsoft Excel
How to Budget Using Google Sheets and Microsoft Excel

How to Budget Using Google Sheets and Microsoft Excel

Here’s a detailed procedure for creating a budget using Google Sheets and Microsoft Excel in less than an hour.

Open A New Spreadsheet

On the left-sidebar of your Google Drive account, click ‘New’, then click on ‘Google Sheet’.

Or open a new workbook in Excel.

 

How To Create A Budget Using Excel - Open A New Workbook
How To Create A Budget Using Excel – Open A New Workbook

How to Budget Using Google Sheets and Microsoft Excel – Categorise Your Expenses

Tracking your expenses and income over time requires essential budget categories, making it imperative for every budget to commence with selecting these categories, irrespective of the chosen budgeting method.

While there is no definitive number of categories, we suggest maintaining simplicity in your categories. Some individuals budget with as few as three categories – or even just one!

You merely require a sufficient number of categories to encompass all your income and expenses, avoiding unnecessary complexity.

Within your categories, it proves beneficial to monitor:

  •  Income – Depending on your objectives, you may choose to track some or all income.
  • – Expenses – These categories will constitute the majority of your budget.
  • – Transfers – This includes credit card payments, automated savings, etc.
  • – Savings – This category can incorporate emergency funds, retirement savings, etc.
  • – Debt Payments – Car payments, student loans, etc.

 

How To Create A Budget Using Microsoft Excel - Categorise Your Expenses
How To Create A Budget Using Microsoft Excel – Categorise Your Expenses

Adding subcategories can be beneficial if you prefer detailed tracking to maintain better control of your finances, particularly when striving to minimise expenses in specific financial areas.

What Budget Period Are You Using?

You might choose to budget on a daily, weekly, bi-weekly, monthly, or yearly basis, with your preference influenced by:

  •  The frequency of your paychecks
  • – Your desired level of financial oversight
  • – The amount of time you’re willing to dedicate to updating your budget spreadsheet

You can also employ multiple budget periods simultaneously. Most budgeting apps and software primarily track income and expenses monthly, projecting the budget over a year.

Regardless of the chosen budget period, it’s essential to set up three columns:

  • A column for budgeted income and expenses
  • A column for actual income and expenses
  • A column indicating the variance between the two, providing a comprehensive overview of your financial progress.

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How to Budget Using Google Sheets and Microsoft Excel – Use Simple Formulas

Summing cells manually can be time-consuming, but Google Sheets and Excel streamline the process with formulas.

You can calculate the variance between your budgeted and actual income and expenses by subtracting the cell containing the “actual” amount from the cell containing the “budget” amount.

You can vertically sum all your income and expense categories using the SUM formula.

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Input Budget Numbers

Creating a budget essentially entails establishing financial objectives. Your income serves as a definitive boundary for your allowable expenses. Nevertheless, within the confines of your income, you retain the discretion to allocate your funds as you see fit.

Your past financial records offer a valuable starting point for crafting your budget. Review your bank statements from the preceding months to discern the actual destinations of your funds.

Update Your Budget

As your chosen budget period progresses, ensure to consistently update your budget spreadsheet with all actual transactions to monitor your progress effectively.

It’s important to be flexible with your budget and make adjustments to accommodate unexpected expenses or income. Budgeting is about increasing awareness of the flow of money into and out of your life.

Variations between budgeted and actual income and expenses are natural, and with continued use, your budget will become more accurate.

Conclusion

Creating a budget from scratch doesn’t need to be complicated. You can conduct a comprehensive financial assessment without relying on intricate spreadsheets or advanced formulas.

However, if you’re proficient with spreadsheets, you might consider incorporating additional features to enhance the informativeness and visual appeal of your budget spreadsheet.

FAQs

Is Google Sheets good for budgeting?

Yes, and that’s because Google Sheets is one of the most powerful, popular, and versatile tools for managing your money. Whether you’re a seasoned budgeting pro or just starting, Google Sheets offers the necessary tools.

Does Google have a budget tracker?

Yes, Google has a budget tracker. This free add-on allows you to use Google Sheets as a budgeting application. Setup categories/subcategories for income and expenses, then enter your transactions. An Expenses tab will allow you to analyse your expenses by category for every month and compare that to your budget

What is the 50 20 30 budget rule?

Many budgeting philosophies exist, but the 50/30/20 rule stands out for its practicality, flexibility, and effectiveness. This rule divides your budget as follows:

  • 50% of your income for needs.
  • 30% of your income for wants.
  • 20% of your income for savings or debts.

If the 50/30/20 rule doesn’t align with your budgetary needs, feel free to make adjustments. You could prefer allocating an extra 5% of your “needs” to the “want” category, or you might choose to increase savings by 10%. This rule serves as a general guideline to kick-start your budgeting journey, allowing room for customisation based on your lifestyle.

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By Nayomi

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