How to Use Excel for Finance: Balancing Your Personal Budget
Excel is one of the most powerful tools for all types of financial analysis since you can customize your reports exactly how you want. Learning how to use Excel for finance takes a little work when you’re first getting started, but it’s a wonderful way to track your budget, income, and spending.
In fact, learning how to balance your own budget with Excel is a fantastic way to get familiar with the functions and formulas you’ll use on a daily basis. We’re sharing some tips for getting the most out of Excel and its ability to help you track your personal finances!
Is Excel Better Than Budgeting Apps?
While there are plenty of budgeting apps available, they’re often pretty complicated, not customizable enough, or – somewhat ironically – require a monthly payment to maintain.
Finding a budgeting app that meets your exact needs can often be harder than simply learning how to use Excel!
Start Learning How to Use Excel for Finance & Personal Budgeting
If you’re totally new to Excel, you can take a free intro course to get familiar with the basics before diving in. Also, Microsoft offers an impressive variety of budgeting templates that fit plenty of different needs. These templates range from college budgeting to event finance planning to basic family budgets and more.
Creating a personal budget can be a little time-consuming (especially when you’re unfamiliar with the software), so using one of those templates is a great way to jumpstart your Excel budgeting practice. Plus, you can always add and subtract elements to truly make the budget layout your own.
If you do want to design your own custom budget, there are a few basic aspects you’ll want to include.
- Income section: This is where you’ll keep track of your income. Keep in mind that if you have multiple sources of income, you’ll want to label those as well.
- Date column: It’s not 100% necessary to include a date section, although it’s very useful if your monthly revenue sources and pay dates change.
- Planned column: This is where you can record how much you expect to earn. Having a planned income section isn’t strictly necessary either, but it may help you discover trends in your budgeting over the long run.
- Total income column: You’ll report your total earned income here.
Next, you’ll want to create an expenses section. It can go on the same sheet as your income, but you may find it easier to keep these on separate sheets.
Your expenses section will likely look similar to the income section. You’ll need a date column to keep up with bills, a planned column to estimate how much you expect to spend, and an exact expenses column to show precisely what you spent (hopefully less than planned).
You can also customize your spreadsheet with any unique expenses you may have, so using Excel is a great way to account for every single cent that comes in and out.
The most important things you’ll want to include – and the real reason Excel is such a great budgeting tool – are the functions & formulas that let you automate the calculations.
Which Functions Will You Use Most Often?
As you become more familiar with the ins and outs of how to use Excel for finance & budgeting, you’ll likely also become more comfortable with using advanced functions and formulas. However, these are a few easy functions you’ll use all the time:
Add income & expenses with SUM.
When it comes to finances in Excel, you’ll use the SUM function the most. With it, you can add numbers, cells containing numbers, or a combination of the two! In your budget, you can use formulas with SUM to add both your income and your spending.
Add together specific expenses with SUMIFS.
The SUMIFS function, like SUM, allows you to sum values – but the neat thing about SUMIFS is that you can choose to add only certain values. For example, you can calculate the total amount due for your monthly bills, or break the “bills” category down even further into sections like phone bills, insurance, car payments, etc.
SUMIFS will really come in handy for anyone who needs to isolate certain values from a long list of budgeting data.
Add your total number of payments & expenses with COUNTIFS.
Do you need to know exactly how many bills you pay each month, or how many paychecks you get each quarter? You can count how many cells contain those numbers by using the COUNTIFS function.
The longer you use your Excel budgeting spreadsheet, the more valuable formulas containing COUNTIFS become as they’ll make it easier to notice how many expenses you have vs. how much income you’re earning.
Use MIN and MAX to find your highest and lowest values.
You might want to examine the highest values when keeping track of bills and income in your budget. These functions can help you make adjustments for the months or years ahead by figuring out which months typically have more expenses. As you can expect, MAX displays the largest value and MIN displays the lowest.
See how close your next paycheck is with the DAYS function.
The DAYS function can help you figure out how many days you have until you get paid, and also when a bill or loan payment is due, as part of your budget.
This function is a great little tool for preventing any surprises and helping you stay on top of what’s due and when. For example, if you can look ahead and see that you have a bill due exactly one day before your next payday, you’ll know that you need to account for that bill in the current week’s budget.
Use the WORKDAY function to calculate how many business days until your next paycheck.
WORKDAY returns the date a given number of work (or business) days from a specified date. This is typically Monday through Friday, and weekends and defined holidays aren’t included.
This function can be really useful when it comes to bill paying as well. Let’s say you make a credit card payment, but it won’t actually be visible in your account for 5 business days – you can use WORKDAY to know exactly which day the payment will be applied.
What About Filling in Your Financial Data?
Once your budget is all set up, it’s time to add in the data. Luckily, there’s a way to avoid manually entering all of your data as that can take a ton of time – especially if you want to add your previous transaction history.
Many banks offer the option to input all of your data into a CSV or Excel file that can then be imported into your new spreadsheet. You can typically access this service through your account on your bank’s website. This could free up a ton of time and make it easier to see the current trends in your transactions.
Excel Really is One of the Best Budgeting Tools Available
And not only because it’s totally customizable! A lot of Excel users find that creating a hands-on budgeting spreadsheet helps them analyze where their money is coming from (and also where it’s going). You might find yourself with a better understanding of your spending choices, and that data only gets stronger and more accurate as time goes on.
With Excel, you’ll be able to track your income and expenses over years (even decades!), see trends in your spending, and make informed decisions regarding your budget.
Do you use Excel for personal budgeting? Let us know if you have any cool Excel budgeting tips in the comments!
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I have been using Excel for managing my finances since the early 2000s.
I maintain all my income / expense transaction records in one sheet with dates + bank-name + particulars + amount entered in different columns.
The running balance is calculated by running a custom macro (I did try formulas, but found them inadequate for what I needed) — and found it easier to simply program it! 🙂
As for the budgeting bit, I simply enter the details with a future date, so I know when a payment is due, and this helps me to ensure that funds are available for those payments.
To make sure that my entries in the tracking sheet match with the actual bank transactions, I copy-paste the bank transactions from the netbanking website into another sheet.
I use a macro for this too, because the html tags mess up my conditional formatting and other settings on the Excel sheet (the code copy-pastes the bank entries as plain text in the relevant cells).
I also copy-paste the particulars of the transactions from the tracking sheet against each entry on this bank entries sheet.
At the end of each financial year I forward this sheet of bank entries to my CPA, and he’s very happy because his efforts are also reduced to a great extent! 🙂
This Excel sheet has saved me from financial mistakes more times than I can remember!
One last thing… I have also setup reminders in Google Calendar for all recurring payments such as credit cards, electricity bills, housing society payments, and other utilities.
Besides getting notifications on my phone app, I have also set these reminders to be received by email.
Very interested in learning more about the macros. My spreadsheet method’s been a mess since my bank disabled download of monthly statements as .cvs or .xls.
Want to track due dates for credit cards and utilities to help plan spending between paydays.
Do you have an exemplary template for what you have described?
My husband and I have been using Excel as our “budget tool” for over 23 years. It’s amazing. We tried different software products but none could match Excel. Love it!
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