We’ve all told ourselves that we need to make a budget. Most of us think “It’s too hard to figure all of it out” and “What about things like groceries that fluctuate?” I used to think that too. But what if I told you you already have one? If you have money left at the end of the month, then you do, sort of. Right off, I’m assuming that you have a bank account with online banking and a computer with Microsoft Excel or Google Sheets (Free!). If you don’t have this, don’t freak out. This can be done with paper, it just takes a bit longer. Excel has some magic you’ll see later on. So, if you’re ready, Let’s see how to make a budget the easy way!
Necessary Materials
To put together your Easy Budget, you’ll need the following items:
A computer with Microsoft Excel or Google Sheets
At least a month worth of electronic bank statements (Paper is okay too)
Getting Started
Most banks have online banking, and usually, you can download your statements. Since all banks have different websites, I can’t cover that. Next, what you want to look for is a download area and download the previous month’s statement either in an excel format or a CSV file. CSV stands for comma-separated-values, programs like excel can use it to separate the data into fields for your use. Now that you’ve downloaded it, open it up in Excel or Sheets.
Add Categories to Statement
Your bank statement should have some description of where the transactions happened. Add a column in Excel and name it Item (or whatever you’d like). Just be sure to name the column, this is for the next step. Use the new column to add categories. Here’s a few to get you going:
Storage Unit
Home Phone and Internet
Cell Phone (Autopay)
Car Insurance (Autopay)
Entertainment Netflix, Hulu
Utilities
Mortgage
Equity Line
Credit Card
Gas
Grocery
Car
Clothes/Makeup/Hairdo
Medical
Home Improvement
Eat Out
Dance Class
Pet
Childcare
Roth
Charity / Tithing
Try to avoid items like miscellaneous. The biggest trouble you may have is when you go to the big box superstore and buy your tires and groceries in the same place. A straight-up grocery store makes it easy. Just put groceries in the cell. The more you do this type of budget, the more aware you will be of these types of things. Keep your receipts or separate your purchases are a few ideas. You’re really trying to establish a baseline for your expenses. Once you’ve reverse engineered your budget, you can improve and cut costs later. Once you’ve completed the whole statement, move on to the next section.
Use Pivot Table (Optional)
This is where excel magic happens. This isn’t an excel lesson, but learning to use pivot tables is a very valuable tool for analyzing data.
First, be sure that every column has a name in the top row. Select all the data you’d like to analyze including the top row. With the data highlighted, Choose the Insert tab on the menu and choose the pivot table.
The dialog box will confirm the cells you’ve selected, click OK. This process will create a new tab in excel. Select Item (or whatever you named your custom column) on the right side and drag down to the Box labeled Rows.
Then take the amount or transaction amount and drag over to the values box. If it doesn’t show up as sum click the arrow and choose value field settings. Pick sum and then click OK. Choosing count is useful for other types of data. If done correctly, your data will be nice and organized!
Make a Budget the Easy Way
Now’s the time to make your budget. You can reorganize your pivot table and make areas for Previous month, weeks 1~5, totals and so on to track where your money is going. Take the variable items and monitor them for a few months to get an average value to help set a good value. After tracking your data for a few months, you’ll have a good idea of your budget.
Helpful Tips
Try to run on a monthly basis for your budget, not paycheck to paycheck.
Read up on some strategies for getting out of debt. Ex Dave Ramsey’s: The Total Money Makeover.
Call your bill providers and ask for a promotional discount or other discounts. I’ve done this many times with success!
Find where you can make cuts in your budget and use the freed-up money on debt or savings.
Conclusion
The more data you can gather, the better off you’ll be. Items that fluctuate work better using an average value over a few months. Try to use this budget at least once a week to see where your money is going. Eventually, you’ll see where all of your money is going. Try to avoid using cash if possible.
Lastly, don’t forget to give back. In this world full of abundance, we need to help those less fortunate than us. It will come back in spades. You won’t regret it.
Thanks for reading. The aim of this was to get you started. If you’ve read this far, good job. Keep going! Come back for more! Check out the main page for other helpful articles.
