How to Make a Budget Spreadsheet From Scratch

Budgeting apps come and go, but a spreadsheet you built yourself has a few lasting advantages. You decide the categories, you can see every formula, and the file keeps working whichever program you open it in. Excel, Google Sheets, LibreOffice Calc and Apple Numbers all handle the steps below in almost the same way.

This is a guide to the mechanics of the sheet, not advice on how to spend or save. The numbers you put in, and the choices you make with them, depend on your own situation.

Step 1: decide what the sheet should answer

Before typing anything, write down the question you want the budget to answer. Common ones are "Where does my money go each month?", "How much can I put aside without running short?" and "Can I afford this upcoming expense?" The question shapes the design. A sheet for tracking spending needs room for actual figures; a sheet for planning a large purchase needs a running total over several months.

Step 2: set up the layout

Open a new file and create one tab per month, or one tab for the whole year with a column per month. Monthly tabs are easier for beginners because each one can be copied from the last. A simple monthly layout looks like this:

Put income at the top of the sheet in its own block, then leave a blank row and start the spending block below it.

Step 3: choose your categories

Start with the categories that appear on your bank statements and bills. Group them under a few headings so the sheet stays readable:

• Income – salary or wages, freelance payments, benefits, other regular money in.
• Fixed costs – housing, insurance, phone and internet, subscriptions, loan repayments.
• Variable costs – groceries, fuel or fares, eating out, clothing, household items.
• Goals – savings, an emergency fund, extra debt repayments, a planned trip.
• Irregular costs – annual bills, car servicing, gifts, divided into a monthly share.

Too many categories make the sheet tiring to update; too few hide where money goes. You can always split or merge rows after the first month.

Step 4: add the formulas

Only a few formulas are needed, and they work the same way in all the main programs:

1. Totals. Under each block, add a SUM formula. If your spending rows run from row 10 to row 30 in column C, the total is =SUM(C10:C30).
2. Difference per row. In D10, type =C10-B10 and copy it down the column. A negative result on a spending row means you spent less than planned.
3. What is left. In a cell near the top, subtract total spending from total income. This single figure shows at a glance whether the month balances.

Formatting helps here. Most programs offer conditional formatting, which can turn a cell red when the difference goes past a level you choose. Format money cells as currency so decimal places line up.

Step 5: fill it in and keep it current

Enter planned figures at the start of the month, using recent statements as a guide rather than guesses. Then pick a regular moment to fill in actuals, such as every Sunday evening. Small, frequent updates take a few minutes; a month of receipts at once can take an afternoon and is easy to put off.

Some banks let you export transactions as a CSV file, which can be pasted into a separate tab and summed by category. That saves typing, but check the export for duplicates and transfers between your own accounts, which are not spending.

Step 6: review at the end of each month

When the month closes, look down the difference column. A category that runs over every month probably needs a more realistic planned figure. One that is always under might have room to move towards a goal. Copy the tab, rename it for the new month, clear the actuals and start again.

If one of your goals is building savings, our piece on how a higher-rate savings account can shorten the wait for a goal explains what to compare. More general money background sits on the Finance desk.

A few practical cautions

Keep the file somewhere private, and protect it with a password if it lives on a shared computer. Never store full card numbers, passwords or online banking details in the sheet; category names and amounts are all it needs. Make a backup copy occasionally, especially before making big changes to the layout. And if money is tight or debts are becoming hard to manage, a free, independent debt advice service in your country can help with options that a spreadsheet cannot.