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“Take Control of Your Finances: Setting Up a Budget Spreadsheet”

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Effective Budgeting with Spreadsheets

Effective Budgeting with Spreadsheets

Budgeting apps can simplify setting spending goals and tracking your income and expenses. However, many of these apps come with subscription fees and require access to your private data. If you’re looking for a cost-effective and customizable way to manage your finances, a budget spreadsheet might be the perfect solution.

1. Choose Your Software and Template

Excel and Google Sheets are popular choices for creating budget spreadsheets. If you use a MacBook, the Numbers app is also an option. Google Sheets offers online access, making it easy to manage your budget from anywhere. For maximum security, Excel and Numbers can keep your file on your hard drive, with optional online access through Microsoft OneDrive or Apple iCloud.

If you’re new to budgeting or spreadsheets, search for budget templates to get started. You may need to customize these templates to fit your needs. Experienced budgeters can create their own spreadsheets from scratch.

2. Calculate Your Income

List all your income sources and include them in your budget spreadsheet. If you have a fixed income, such as a salary or retirement distributions, you won’t need to update this each month. For variable income, estimate your monthly earnings based on past averages or expected income.

3. Categorize Your Expenses

Divide your expenses into fixed and variable categories. Common fixed expenses include:

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

Variable expenses can change monthly and may include:

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

Review your income and fixed expenses each month, then set spending goals for your variable expenses based on your remaining budget.

4. Decide How Often to Update Your Budget

Set your spending goals monthly, but decide how often to update your transactions. Daily updates can be beneficial if you have many expenses, while weekly updates may suffice for less frequent transactions. Consider reviewing your overall budget strategy quarterly, semi-annually, or annually to ensure it aligns with your financial goals.

5. Enter Your Numbers

With all the necessary information and timing set, start inputting numbers into your spreadsheet. Use one worksheet for your income and budget goals, broken down into spending categories. Use another worksheet to detail your transactions, noting the merchant, transaction amount, and spending category. Formulas can help automatically update your spending for each category. For more detailed financial insights, create a third worksheet with reports on spending trends and net worth.

6. Maintain and Stick to Your Budget

Creating a budget is one thing, but maintaining it over time can be challenging. Budget spreadsheets require manual data entry, which can be time-consuming. To stay motivated, remind yourself of the benefits of managing your money effectively. Regularly evaluate your approach to ensure it’s realistic and achievable. If a spreadsheet becomes too cumbersome, consider using budgeting apps to save time.

What if You Can’t Stick to Your Budget?

If you struggle to meet your budgeting goals, consider making behavioral changes. Cooking at home, reducing credit card use, and driving less can help lower expenses. Look for ways to increase your income and reduce fixed expenses, such as canceling streaming services or switching to cheaper insurance providers. Improving your credit can also help you save on interest when borrowing. Monitor your credit alongside your budget to track progress and address issues promptly.

At O1ne Mortgage, we understand the importance of effective budgeting. If you need assistance with mortgage services, call us at 213-732-3074. We’re here to help you achieve your financial goals.



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