How to Use Microsoft Excel to Create a Budget

Creating a monthly budget is an important part of household finance. You can use a pad and pen to make a budget document, but you may have a more efficient tool already available on your home computer: Microsoft Excel. Using Excel to generate your budget is quick and easy if you know how. Once you’ve opened Excel and have a blank spreadsheet to work with you can make a budget sheet from scratch by following these steps.

Format the spreadsheet
Select columns B, E and H. Click the Format menu item, then click Cells, then the Number tab, and then Currency. Enter labels in specific cells. In cell A1 type Income Sources; B1, Income Amounts; D1, Expenses; E1, Expense Amounts; G1, Total Income; G2, Total Expenses; and G3, Net Income or Loss. Make all these labels bold. Leave columns C and F blank.

Track your income
List all income sources in column A, one source per row. Label the cell after the last entry Total Income. List the corresponding amounts in column B. The cell to the right of Total Income should be blank.

Track your expenses
List all expenses by name in column D, one name per row. Label the cell after the last entry Total Expenses. List the corresponding amounts in column E. The cell to the right of Total Expenses should be blank.

Determine totals
Highlight all cells in column B (Income Amounts) containing numbers, plus the blank cell beneath them. Click the summation button. This button has the sigma character on it, which looks like a stylized capital E. Your total income will appear in the previously blank cell. Use this method in column E (Expense Amounts) to display your total expenses.

Determine net income or loss
Find the cells containing your total income and total expenses (for this example, cells B6 and E6.) Enter =B6 in cell H1, =E6 in cell H2, and =H1-H2 in cell H3. This will display a net profit or loss value. If the number is positive your income exceeds your expenses. If negative, the reverse is true.

Final Polish
Use borders and shading to improve readability.

The advantage of using Excel
As long as you only change the number associated with individual sources of income or expenses the totals will automatically recalculate. You can update the spreadsheet at any time and still have accurate results.


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