Budget: what it is and how to create one in excel

I’ve been managing my family budget since January 2019. I keep all my records in an excel sheet. Before I got married in 2018, I managed my personal income in the same way I now manage my family’s income, using excel. I made a budget every month based on what I expected to earn and I kept a record of almost everything I spent on. Doing this helped me see where my money was going and how I could improve my spending habits, invest and save. Over time, I got better at record keeping. I eventually developed an excel sheet (which I’ve included below) to help me track spending and generate reports. This tool works perfectly for me and my husband and its so easy to use. Once you’ve read this article which will explain “what a budget is, why you need it and how to create one” you can go ahead and download the file to get started.

So first off, “What is a budget?”

A budget is just an estimate of how much money you’ll make over a period , say a month and how much you will spend, save and invest over the same period. A budget helps you see realistically what you can afford and allows you plan and manage your income efficiently.

A budget is a really useful tool. It helps you plan your spending properly and be in control of your finances. As you start to budget monthly and track your spending, you will begin to see clearly what you spend your income on and start to make smarter choices.

How to create a budget.

Budgeting is all about making a list of your your expenditures and allocating an amount or income percentage to each line item. I personally like to use the 50/30/20 rule for my budgets (even though sometimes I move money around). So in the 50/30/20 structure, I commit 50% of my income to spending on necessities like food, toiletries, transportation etc. Then the 30% goes towards wants and projects while the 20% goes towards savings and paying my tithe. You don’t have to use this structure but it’s a good way to structure your spending.

To create a realistic budget, begin by listing all your income. IF you’re employed, list your net (after tax) income. If you have a business list the income you get from there. List all your expected income and also track the income you actually receive.

Next, list everything you spend on monthly. It’s gonna be a really long list I’m sure, but try to be as thorough as possible. Then, group them into categories. For example: Food, Toiletries, Rent, Transportation, Utilities, Personal care, Children/Pet, Charity, Savings, Tithe etc. You can also go a step further and create bigger categories. For example: Household (Food, Toiletries, Rent, Children/Pet, Transportation, Utilities), Personal care (hair, makeup etc) and Savings/Tithe/Charity. Tracking and categorizing your expenses like this can help you determine what you are spending the most money on and where you can make some savings.

From there, set some financial goals, both long and short term goals. Short term goals are those that can be achieved in 1 to 3 years while long term goals are those that can be achieved between 3 to 5 years. What do you want to achieve and how can your income and expense help you achieve those goals? Be ambitious but also as realistic as possible.

Finally, create a plan using the information you’ve gathered. Look at the things in the want category, are they really necessary? What can be removed to create some savings? Also look in the needs category, do you really “need’ to have everything on that list? If you find that your income is not enough to cover your current needs and it won’t allow you to have big dreams, then you need to start thinking of how you can make additional income or get a job that pays more. As my husband likes to say “if money is not coming, it’s going”. No matter how well you manage your spending, if your income is not growing you may never be able to accomplish your goals. If a side hustle is something you’ve thought about doing to make extra income, you can read my article on starting your very own side hustle below.

The only way to make it ahead is to set goals, be strategic and intentional about accomplishing the goals you set for yourself. Building long term wealth starts with a simple change in your financial management habits. In the beginning, this may feel overwhelming but as you do it month after month, it’ll start to get easier. Once you have fallen into a routine, it’s important to review your budget to be sure you are staying on track. Parts of your budget may be fixed but as you accomplish your goals other parts can be adjusted to reflect new goals and new realities.

We’ve come to the end of this article and as promised, you can download a copy of my super easy to use budget template below. If you need support with the template leave a comment below and I can arrange a virtual tutorial for you.

If you liked this article, please let me know in the comment section below.


Published by Ade Suah

Hello and welcome to my site. My name is Christollie Ade Suah and I am a full time Mom, working a full time job and running a small business full time. With so much to do and so little time to do them, I constantly find myself struggling to balance different aspects of my life. So I created this blog as a resource center where health conscious professionals like me can find information and tools to help them balance competing priorities and achieve their goals. This blog covers topics around health and wellness, business, career and parenthood. My goal is to inspire you into taking actions daily that'll improve your life. If you would like to join a network of health conscious people and get notified of new content and products, click the subscribe button below. Thank you for visiting and look forward to growing with you.

2 thoughts on “Budget: what it is and how to create one in excel

  1. Very useful, thank you I’ll make use of this template.I maintain a mini but which is not detailed as yours, and try to keep an account of my expenditures.

    Like

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