# How to use a Spreadsheet to Set a Budget

The spreadsheet can be a very helpful tool when it comes to setting up a variety of different budget types. People can use the spreadsheet to track, manipulate, and collate a large amount of personal financial data. While not all technology will automatically make things easier,
the spreadsheet does allow people to do certain things more efficiently. Budgeting is an exercise that requires a certain level of personal discipline, but the spreadsheet can enhance the product. With that in mind here are a few thoughts on using the spreadsheet to set up a personal budget.

Categories

The most basic budget will be set up in such a way that the person can track money that comes in and money that goes out. This is typically
called income and expenses. If people have standards salaried jobs, the income should be easy to track. When people freelance or own their own businesses they may need to estimate their monthly income in order to put together a budget. Expenses may be more complex but it often fall into categories such as rent, entertainment, household, utilities, loans, and automotive expenses. Since these types of expenses can fluctuate from month to month the person may have to do some historical tracking in order to get near a realistic budget. This may also be the first step that requires some personal discipline since some individuals do not track particular expenses but rather spend
based on impulses and desires of the moment.

Set up

Putting together the spreadsheet is not overly complex but it does require some amount of understanding in terms of how spreadsheets are
designed.  The spreadsheet is comprised of “cells,” which will hold pieces of data.  In the case of a budget, people can put a category into a cell or they can put a dollar amount.  Some people keep it simple and put income and expenses in the same column.  If people start to get comfortable with equations, they can total their income or expenses at the bottom of the section.  For example, they might put an equation that says, =sum(b4:g4).  This tells the computer that the cell should add up all the data in cells b4, c4, d4, e4, f4, and g4.  The cells are determined by noting the row and column.  Other people put income and expenses into different columns so that they can be differentiated.  As people get more complex, they can put the budgeted number in one column and the actual number in a different column.  Of course, this requires people to actually track their data.  If a budget gets too complex, they may need to turn to a software program such as Microsoft Money and Intuit Quicken.  The bottom line is that a spreadsheet can be a good tool for budgeting, but people actually have to input data and maintain the budget.