Being able to manage your money is one of the most important skills a person needs in life. Getting advice or new ideas on how to tackle this issue is always handy. That’s why I want to share how Microsoft Excel has been a very successful tool that I have used to manage my money. It makes budgeting organized and very simple. While I explain how I use this program, take note of the picture of the mock budget I created to see a visual example.
First what I do is I list my fixed expenses (bills that stay the same each month) on the left hand column in each cell (Rent, Cable, Loans, Phone, Electric, etc.). Below my fixed expenses, I put my variable expenses (bills that change each month), which I name “Everything Else”. Others may choose to separate that category even further, but for me, I just keep it as one.
I then skip a line to create a “Total Monthly Expenses” row and skip another line to create a “Net Monthly Income” row. “Total Monthly Expenses” is everything paid for in the month and “Net Monthly Income” is how much money you make after taxes are taken out. Then finally my last row is the “Over/Under” category, which shows how much money I spend over or under my income for the month.
Next to each expense in the column over is the amount I will spend, or a rough estimate, on that specific bill. Then I begin to label each column by the month.
Now the magic happens and I set up my formulas in Microsoft Excel to help me with my calculations. What I do is I highlight the row under a specific month, from the first expense all the way down to the “Total Monthly Expenses” row. I then hit “AutoSum” button on the top right of the Microsoft Excel screen. What this does is every time I type in a payment I make, Microsoft Excel automatically adds it up in the “Total Monthly Expenses” row.
Once each expense is paid, I put that amount in the appropriate cell. Every time I spend money on something that is not a bill, I continue to add up the amount in the “Everything Else” cell. In order for Microsoft Excel to calculate the numbers for you, start each cell with “=” and then begin your equation. For example, type “=4+153.35+13.21”. Once you hit enter, you will get your result.
Then what I do in the “Net Monthly Income” row, is I put how much money I can spend after my taxes. Whenever I receive more money, I just add it to the total in that cell.
Finally one of the most important things I do, is add another formula in the “Over/Under” row. I first type “=”, then click the “Net Monthly Income” cell for the month I’m in. Then I hit the “-” button (for subtracting) and click the “Total Monthly Expenses” cell. By looking at the picture of the mock budget, it would look something like this for the month of January: “=D14-D12”. (You can’t see the equation because the answer to the formula takes over the entire cell). Now whenever I add an amount anywhere in that month, it will automatically calculate everything for me. It will determine if I am spending more or less than my income allows.
I have used Microsoft Excel for almost 4 years now and it has been great. Feel free to use this information however you want. If you are struggling with organizing your finances, this could be a great tool for you to get you on track.