Learn why and how to budget.

1. How to Budget with a
Spreadsheet
Part of Money Smart Week

2. Why do you need a budget?
Developing a budget that you can maintain over the long term has
definitively been linked to building wealth, while simultaneously
helping you get out of debt and cut expenses.
https://www.moneycrashers.com/how-to-
make-a-budget/

3. Steps to Creating a Budget
• Decide to Start a Budget

4. Steps to Creating a Budget
• Know How Much You Have
If you have savings, checking accounts, investment accounts, or any
other financial instruments, you will want to know how much money
is in each account as well as the interest rates and expenses of each
one.

5. Steps to Creating a Budget
• Know How Much You Make
For some people, this is easier than others. Those on a salaried pay
scale can easily find their monthly income. Those with fluctuating
income can estimate the average monthly income.

6. Steps to Creating a Budget
• Know What You Owe
Determining your monthly recurring debt payments should be your
next step.

7. Steps to Creating a Budget
• Determine Your Net Worth
Once you know how much money you have and how much you owe,
you can easily determine your net worth. Just subtract what you owe
from what you have, and you will derive a number.

8. Steps to Creating a Budget
• Determine Your Average Recurring Monthly Expenses
This can be the hard part for many people. The best way to determine
your monthly expenses is to make a stack of household expenses for a
month. Keep your receipts, your utility bills, and any other expense
that arises during a one month period, and divide these bills into
categories.

9. Steps to Creating a Budget
• Enter this Information into a Database
Software programs like Microsoft Excel and online budgeting tools
like Mint, You Need a Budget, and Mvelopes have made it much
easier to take the results of your first few steps, and develop a highly
adjustable and sustainable long term budget.

10. Steps to Creating a Budget
• Look at the Bottom Line
After entering all of the above information, you will discover the most
important number in your budgeting process – the bottom line. This
number will tell you whether you are overspending or underspending.
Ideally, during this step you will find that you are living within your
means, and maybe will even have a little left over on a monthly basis.
On the flip side, you may determine you must make adjustments to
your monthly expenses in order to live within your means.

11. Steps to Creating a Budget
• Make Adjustments Accordingly
If the bottom line of your budget proved that you are overspending
your monthly income, you will come to the most difficult step –
making cuts to your monthly expenses. There are tons of resources
that will teach you to be smarter with the income you have, help you
cut your recurring monthly expenses, and establish your financial
boundaries for personal budget planning.

12. Steps to Creating a Budget
• Adjust Categories Based on Reality
Life is full of surprises. Food gets more expensive, gas prices rise, and
rent can get hiked when you least expect it. Each time you
notice inflation creeping up on your expense categories, get a raise at
work and begin to earn more money, or worse, suffer a financial
setback like a pay cut or job loss, you must adjust your categorical
expenses based on the realities of the world around you.

13. Steps to Creating a Budget
• Pay Yourself First
Depending where you are in your budget, based on your bottom line,
you may want to add a few extra line items to your monthly expenses.
These may be monthly dispersals to a savings account like Capital One
360 or Ally Bank, Roth IRA, 529 college savings plan, or other savings
vehicle. Moving money into savings and treating it like a recurring
expense will allow you to slowly build up your savings without feeling
like you must make these deposits from what is left at the end of the
month.

14. Steps to Creating a Budget
• Track, Monitor, and Be Disciplined
Keeping track of your budget takes an hour or so a week. But
this will save you a lot of time in the long run. Once you have
an established budget, you will want to keep it in check. The
discipline and associated knowledge that you are making
good long term and short term financial choices will provide
you with a great deal of comfort, and will take you
from living paycheck to paycheck to being able to see the
long term results of your disciplined savings and financial
planning.

15. Income – Using a Spreadsheet

16. Bills – Using a Spreadsheet

17. Bottom Line – Using a Spreadsheet

18. Tracking– Using a Spreadsheet