How to Make a Budget Spreadsheet

1. Choose a Budget Template

Budget templates are a great way to get your budget up and running without a crash course on spreadsheets.

You can find an abundance of downloadable budget templates available online—some free, some that you need to purchase to download. Consider these free budget spreadsheet templates first:

Microsoft Office Budget Templates

If you plan to use Microsoft Excel for your budget spreadsheet, start by checking out the many free budget template options available directly from the software.

You can find free Excel budget templates on Microsoft's site. Beyond general household or personal budgets, there are also wedding budgets, holiday budgets, college budgets and more to choose from.

Google Sheets Budget Templates

Google Sheets is a web-based, free spreadsheet software with free budget templates you can choose from. Google spreadsheets are stored on the cloud, so it's convenient to access your documents on your computer or your phone, at home or on the go.

To find Google Sheets budget templates, start by navigating to Google Sheets and clicking "template gallery" at the top of the page. Choose the "monthly budget" template to get started. There's also an annual budget template for tracking your spending throughout the year.

Notion Budget Templates

Notion is a productivity software that lets you organize your life into various boards. It's a popular option for financial management because it's customizable and easy to use. Notion lets you start with a blank sheet, but you can also pick from a number of user-created budget templates and copy them directly to your Notion workspace.

You can use Notion on your desktop or your phone, which makes it easy to budget wherever you are. Another neat feature is that you can easily share your Notion budget with other members of your household to allow them to view your budget plan and input their own spending, for instance.

Keep in mind that some Notion creators do charge for their templates, but there are plenty of free options to choose from. To start, you can navigate to Notion's budget template category and then filter the results by "free."

Federal Trade Commission (FTC) Budget Worksheet

This free budget worksheet offers an easy way to get started with crunching your numbers and setting plans for next month's spending. The worksheet has you enter your income and expenses to determine whether you're spending less than you earn, or whether you may need to cut back. You can download the worksheet at the FTC's Consumer.gov site.

2. Calculate Your Income

Create a list of all of your income sources and include each of them on your budget spreadsheet.

If you earn a fixed income, such as a salary or retirement distributions, you won't have to update your income each month. On the other hand, if your income is dependent on how many hours you work or if you're self-employed, you may need to estimate your income each month based on what you expect to earn or what your average income has been over the past few months.

Learn more: How to Budget With Irregular Income

3. Categorize Your Expenses

Your budget is made up of both fixed and variable expenses. Common fixed expenses include:

• Rent and mortgage payments
• Other debt payments
• Savings and investments
• Insurance premiums
• Phone, internet and subscriptions
• Child care costs

Because these costs don't change each month, you don't need to set goals for them. Variable expenses, on the other hand, can change from month to month. Common variable expenses include:

• Groceries
• Utilities
• Fuel
• Dining out
• Clothing
• Travel

Each month, you'll want to review your income and fixed expenses, then set spending goals for each of your variable expenses based on what you have left over.

It's also important that you build saving goals directly into your budget, and treat saving as one of your most important expenses. How much you should save depends on your personal financial situation, but one standard is to set aside 20% for savings and retirement from each paycheck. Deposit money earmarked for general savings or your emergency fund into a high-yield savings account to earn some interest while maintaining easy access to your funds.

4. Decide How Often to Update Your Budget

Because expenses can change from month to month, you'll likely want to set your spending goals on a monthly basis. But you'll also want to consider how often you want to update your transactions and evaluate your budgeting process.

Some people find it useful to incorporate a payday routine, where you sit down each time you get paid and go through your budget. See how your actual spending stacks up against your planned expenses, and check to see how you'll need to allocate your income this pay period.

On the other hand, if you're paid every two weeks, you might find that you need to update your spreadsheet more often to keep tabs on your spending and ensure you're sticking to your plan. It could make sense to spend a few minutes each day to add your expenses into your budget spreadsheet.

You may also consider reviewing your overall budget strategy quarterly, semi-annually or annually to ensure that it's still in line with your financial needs and goals.

5. Enter Your Numbers

Once you have all the information you need and the timing set, you can start putting numbers into your spreadsheet.

In one worksheet, you can lay out your income and your budget goals, broken down into separate spending categories. In a separate worksheet, you can detail your transactions as they occur. You'll want to use the columns to note the merchant, transaction amount and spending category.

Then, you can use formulas in the first worksheet to automatically update your spending for each category every time you add a new transaction. If you're unfamiliar with spreadsheet formulas, many budget templates include them for your convenience.

If you want even more details about your financial situation, you can create a third worksheet with various reports, including spending trends and your current net worth.

6. Maintain and Stick to Your Budget

Creating a budget is one thing, but sticking with it over the course of several months and even years can be challenging.

One of the downsides of using a budget spreadsheet is that it requires a lot of manual data entry. Even if you're using formulas to update your budget as you go, you'll need to enter each transaction you make individually, and the amount of labor involved can make it easy to lose motivation.

To avoid getting overwhelmed or discouraged, remind yourself regularly why you want to better manage your money in this way and focus on the benefits. Continue to evaluate your approach to make sure it's realistic and doable. If you find that a budget spreadsheet is just too much work, consider some budgeting apps to help cut down on the amount of time you spend updating your budget.

Learn more: How to Stick to a Budget

Frequently Asked Questions

The Bottom Line

However you choose to manage your money, the important thing is that you take a deep look at your spending and try to find a budgeting method that works for you. Budgeting spreadsheets are a great way to get organized toward your financial goals, track your spending and see how your money management pans out over time. If you find that budget spreadsheeting is a bit too labor intensive, you could also consider a budgeting app that automatically imports and sorts your transactions for you.