Budgeting Templates in Excel — My Favorite Tool – Brian
Here I go mentioning the “B” word again. Let me get out in front of it and say I love using budgeting templates in excel to manage my money. An excel template was the primary tool my family and I used for over four years to track our $100K debt repayment progress.
We still use excel today to track our net worth, monthly budget, and basically anything to do with our money. Sure there are plenty of apps or software you can use. But if you enjoy crunching the numbers yourself as I do, budgeting templates in excel might be right for you.
The other great thing about a budgeting template is the fact that it is a template, a preset format that gives you a great headstart to capture your income and expenses. Budgeting is hundreds of years old, so why try and reinvent them? It’s much easier to use budgeting templates in excel, so the format does not have to be recreated each time you used it.
A budget in its purest form is a record of your income and expense. How do you define income and expense? Well it may vary for individuals, but generally, they are:
Income — Money you earn from a job, side hustle freelancing, etc. Income can be earned daily, weekly, monthly, etc.
Expenses — Mortgage, rent, food, gas, cable, insurance, phone, electric, student loans, credit cards, medical, self-care, pet care, entertainment, etc.
The simplest way to understand these numbers is to grab your pay stubs, bills, or statements for all income and expenses and begin to organize and document them.
I have created my own budgeting templates in excel and google sheets for you to download and get started. Just replace all of the example numbers in either sheet to get started.
By completing this task, you have just created a money foundation. A starting point to understand how much money you make and how much you have outgoing each month. From there, you can begin to make adjustments.
Many people believe creating a budget will restrict their spending. I think it’s just the opposite. You are reviewing and understanding where your money is going, so you can prioritize how you spend it.
The powerful thing about budgeting templates in excel is that you can customize it to fit your personal situation. Adding as much detail as possible, color coding, etc. and with some simple formulas, it does all of the calculations, and totaling for you.
I tend to be a detail-oriented person. From a budget category perspective, I could really drill down to the nitty-gritty for all of our expenses. For example, when we had five credit cards, I might list them individually in our budgeting template in excel. But in reality, I took a broad stroke and just listed credit cards in one line item with its total. Here are some common categories you might find in a budget:
- Cell Phone
- Student Loans
- Credit Card
- Cable TV
- Water and Gas
- Home / House Hold
- Medication/ Medical Bills
- Charitable Donations
- Eating Out
- Outside Help
- One time payments
- Savings Account
There’s really no wrong or right way to capture your budget categories, other than making sure you’ve included all income and expenses. But which bucket you put them in or identify them as, is really up to you.
We shop at Costco and purchase things other them food there. But I don’t breakdown a single receipt into multiple categories. I just lump it into our “food” line item.
I would, however, suggest when first starting out with a budget for the first time, that you include as much detail as possible for the first two-three months. Saving receipts, or reviewing bank transaction is a great way to find those details.
Documenting as much detail as possible gives you a better understanding of where your money is going. Sometimes we fall into spending habits, like a daily cup of coffee & bagel, without realizing we are spending money there.
This early level of detail gives you the information to need to prioritize your spending and make changes.
I’m a fan of the customize budget to fit your personal situation. That’s why I like the power of using budgeting templates in excel. You can modify it to meet your needs. However, if you are looking for a cookie-cutter solution to get started, there are several popular budget strategies you can use.
The 50/30/20 budget was made famous by Harvard economist Elizabeth Warren and her daughter, Amelia Warren Tyagi.
Here’s the 50/30/20 breakdown:
50% — Half your take-home income should go toward necessities like housing, electricity, gasoline, groceries, and the water bill.
30% — percent can go to discretionary items like restaurant dining, buying a new cell phone, drinking beer, or getting tickets to a sports game.
20% — percent should go towards savings or debt repayment.
The beauty of this 80/20 budget is that you don’t have to do any detailed expense-tracking. You simply take your savings off the top and then spend the rest.
So it breaks down:
20% — saving
80% — all other expenses, rent, debt, food, etc.
Pretty simple, right?
Zero-based budgeting is a way of budgeting where your income minus your expenses equal zero, each month. With a zero-based budget, you have to make sure your expenses match your income during the month, and you’re giving every dollar a function.
Now that doesn’t mean you have zero dollars in your bank account. One of your budgeting categories should be savings. It just means your income minus all your expenses (outgo) equals zero.
That means if you earn $4,000 a month, you want everything you spend, save, donate, or invest to all add up to $4,000. By doing this, you have every dollar account for each month.
A bare-bones budget or a contingency budget is a secondary budget to your primary budget. It’s in place and set aside for when life’s unexpected events occur.
To quote the boxing legend Mike Tyson — “Everyone has a plan until they get punched in the mouth.”
The goal of the bare-bones budget is to have a plan for that punch. Let’s say you experience a significant house repair, or car accident, or maybe a job loss. How would you handle it? You could lean on your bare-bones budget.
It takes your spending down to the minimum required to survive and fulfill your financial obligations. Think of it as covering all of your needs, and putting a pause on spending on wants. You’ll need food, but won’t be going to the movies during this time.
So now that we’ve reviewed how a budget can help you, budget categories, and budget strategies, let’s get to crunching some numbers already. Here are some of the best budgeting templates out there to get you started.
Debt Discipline — budgeting template in excel and google sheet
How to FIRE — budgeting template in excel
Take some time to take one or more of these budgeting templates for a spin. It might just bee an eye-opening experience when you truel understand where your money is going.
Creating a budget is a fundamental key to organizing your money. There are two things to remember with your budget. Your income is your biggest wealth-building tool, and debt, of any kind, is a killer of budgets.
Once you have your income and expenses capture in a budgeting template, consider what your budget would look like with more income or the credit card category removed from your expenses.
Adjusting these numbers can give you a glimpse into the future of your budget, money, and life. I find it to be a great motivator to keep my budget in order.
Gid luck creating your budget, and let me know how I can help.