Let’s pretend that you have Microsoft Word, but you’re feeling a little terrified of Excel. However, you’re looking for a program that will help you set up a simple budget. If you already have Excel on your PC, it’s quite simple to use it as a budgeting program. While you can purchase or download other programs, I generally go with my familiar friend Excel.
Here’s how to set up your budget.
First, sit down with your significant other and write down all of your categories of spending. If you don’t know what you spend money on, get a notepad and pen and track your spending for at least a week, preferably for a month, since that will cover all of your regular bills. Then sit down again and write the categories.
My categories include gas and electricity, mortgage, insurance, food, restaurant food, lessons and school fees, car and transit fees and maintenance, allowances for every member of the family, pet care, charitable donations, medical expenses, family entertainment, and church, in no particular order.
I also have categories for medium term saving like Christmas, vacations, large medical and pet expenses, bulk food purchases like berries, home repairs and taxes for my small business. I also have automatic withdrawals for items like our emergency fund, my daughter’s RESP, and my RRSP. Your categories might be very different.
In the first column, I set up the names of each category and write what time of the month any automatic payments or expenses will leave my account. In the second column, I allocate a budgeted amount for each category. The next two columns are for addition. In the third column is the amount that I have spent that month. In the fourth column is a blank space for adding new expenses. The fifth column is also blank until I spend money that month. However, underlying the fifth column is an automatic addition function. Press the fx button near the top left of the spreadsheet and choose “sum”. Then choose to sum up column three and four of that row. This way, when you add more expenses you do not have to do any addition.
At the bottom of all of the rows, I have a total box. I use the sum feature to automatically sum up all of the money I’ve spent, which is in the third column. This shows me how I am doing that month. I also know how much we make every month, so I can compare the two numbers.
Do you budget in Excel?
Image courtesy of mmagellan at stock exchange.