How to Make a Personal Budget in Excel
When it comes to personal finance, the meaning of savings is preserving money for future spendings. However, the saving rate still relies on the economic environment. Based on the data reported by Statista in 2019, 7.6 percent of the Americans preserve their capital for the future, which amounted to 1,289.8 billion U.S. dollars. If you want to set aside money, putting it under the mattress is not the solution. You need to make a personal budget plan. Below are tips in making a personal budget in Microsoft Office Excel.
1. Determine Expenses
If you want to start a budget plan, the first thing you should do is to find out how much you are spending for a specific time frame. Then, add up everything and divide the sum by the amount of time. With this result, you can project the amount you are willing to budget.
2. Know Your Income
Since you know how much money you need to retain, the next thing you will do is to know your actual income. Your income can be deducted with unexpected payment. With that, you have to consider your actual income as the remaining money on your hand.
3. Set Goals
The main reason why you have a budget is to track money and see where it flows. Having a budget can prevent extra spending since you already allot your resources for certain things. With this, your goal should be keeping track of your budget. Though you can break the budget, make sure you get right back at it on time.
4. Record Progress
For sure, you want to keep an eye on your budget. To do that, document all your spending and income. These records will motivate you to meet your savings goals.
5. Be Realistic
Let's be real. It's hard to stick with your budget plan sometimes. However, reaching your financial goal is the most satisfying. So, as much as possible, do not break your budget.
What Is Included in a Personal Budget?
A personal budget is also known as a home budget is a financial plan that determines whether your future income will be spent on expenses, savings, and debt payment. This plan will also help you allocates expected income to expected savings and intended savings.
What Is the 50/20/30 Budget Rule?
The 50/20/30 budget rule is a simple method of budgeting that does not include major budgeting categories. For example, you can spend 50% on your needs, 30% on wants, and 20% on savings or debt payment.
What Is a Simple Budget?
A simple budget is keeping track of your expenses without having an accounting degree. Once you use the budget to track your expenses, you will know if you can overspend on your wants or buy your favorite coffee.
What Are the Four Steps in Preparing a Budget?
1. List your income and monetary resources for a specific time frame.
2. List all your expenses, whether daily, weekly, or monthly.
3. Assess your money on hand, whether it is enough for your expenses.
4. Make sure to use and maintain your budget. Stick to it as much as possible.
What Are the Three Types of Budget?
There are three types of budget depending on feasibility: balanced budget, surplus budget, and deficit budget. The budget is balanced if the expenditure is equal to the expected income. If a budget is a surplus, it means that the turnover exceeds the estimated expenditure. And a budget is called a deficit if the approximate expenditures exceed the expected revenue.