A New Graduate's Guide to Budgeting

Save money and heartache by creating a budget, using simple Excel software.

1. Getting Started

Before you start:

Before you get started, you will need:

  • a computer
  • access to Microsoft Excel or other comparable software (OpenOffice, GoogleDocs Spreadsheets, etc)
  • your monthly income
  • your monthly expenses (rent, utilities, bills, groceries, etc)

Setting up your spreadsheet:

Once you have all you need...

Open a new excel spreadsheet and set up a section for each month.

Leave the first column and first-row space (A1) empty and start your months in the B1 slot through the M1 slot. <Figure A above>

Left-Hand Column: Income

This is where you will compile everything that makes up your monthly income, including:

  • monthly salary
  • benefits
  • pension
  • other

Left-Hand Column: Expenses 

This is where you will compile everything that makes up your monthly expenses, including:

  • rent/utilities
  • monthly bills
  • car/phone payments
  • student loans
  • other living expenses


Income

Your income should be first in the left-hand column and should include all of the money you get a month. Be sure to add the total at the end of your list. <Figure B above>

Expenses

Expenses come after income. Everyone's expenses are different, so figure out what you will have to spend and list accordingly. <Figure C above>

True or False: Getting Started

  • You should add a "Total" row after both your listed incomes and expenses.
  • It is not necessary to categorize your budget monthly.

2. What do you make/spend? Setting Goals.

Setting Your Goals

Whether you are trying to save up to buy a new house, or pay off your student loans, a budget will get you nowhere if you do not know what you are trying to accomplish with it...

Write out your most important goal and why you are creating this budget. Maybe you've never been good with money, or maybe you've never had as much money as you're about to make in your new career, either way, knowing your goals is a great way to stay on track with your spending. These goals can be categorized as short-term goals, or long-term goals.

Short-Term Goals

Short-term goals are your goals that could take anywhere from 1 month to less than a year to accomplish. 

Examples of these goals might be:

  • Learning how to track your spending
  • Spending less money impulsively
  • Saving up to buy a gift for someone

Long-Term Goals

Long-term goals are goals that will take more than a year and could even take 10 years to accomplish. 

Examples of these goals might be:

  • Saving up to buy a house
  • Paying off student loans 
  • Paying off a mortgage

Soft Outline - Back to your Spreadsheet

Start with your monthly income, and categorize it.

Write down how much you make each month, with taxes taken out. This includes your salary, any benefits you might get monthly, and any other income you receive aside from your career salary. This step can be as simple as the picture below (Figure 1A).

Your Expenses...

There are some expenses that you can be certain on when you start your budget, but some things will be estimations.

You will know your rent, monthly car payments, student loan payments, and insurance costs, but you may not know your exact utilities, your grocery payments, or your miscellaneous expenses. This is where setting a limit is very important.

 Write down what you know you will be spending first, then set spending limits on the other expenses in your life.

I estimated my grocery, entertainment, and clothing budget by how much I have used in the past and how much I think I will need to use in the future each month. I also know that I want to save money every month so that I can save up to go on a nice vacation in the future, so I have set my savings to $700. 

Any money that is left over at the end of the budget or month should also be put into savings or moved into one of the categories you require more. <Figure 2A above>

Before you categorize your budget, what should you do first? (Can pick more than 1)

  • Spend all of your money on the first of the month
  • Figure out your budget goals, long-term and short-term
  • Write down your income and all your estimated expenses
  • Forget to take tax into account.

3. Filling in Your Budget

Learning to use the SUM tool - Filling in your budget!

1. Fill in Your Income

You wrote them down already, now it's time to fill them in! Just put the values in their respective places (like the left-hand picture).

Then click on the space next to your "total."

<Figure 1 to the left>

2. Sum it up 

In the top right hand corner is an icon that says "AutoSum." While you have the income "total" box highlighted, click on the AutoSum button.

This should immediately highlight your income numbers in a dashed, blue box, but if it does not, you can easily drag the sum box from your total up to your first value. Make sure to hit the "enter" key on your keyboard.

You should notice that, after you hit enter, your entire income will be summed up in the "total" space.

<Figure 2 in the top left, and Figure 3 in the top left>

3. Copy it Over

Now you can right click on your newly summed total to pull up the copy bar as seen in the picture on the right. 

Click "copy" and drag the now dashed box all the way over to your December Box (in the M column).

Be sure to hit the "enter key" after you drag over your boxes, or the sum function will not paste over.

<Figure 4 to the right, Figure 5 below>

4. Wash, Rinse, and Repeat with Your Expenses

Do exactly what you did with your income, now with your expenses. Input at least a couple of your expense values, click the Total box, and Autosum.

Be sure to copy it over all of your months and hit "enter."

<Figure 6 to the left>

5. Find the Difference 

The last step of using the excel software, is finding the difference of your two totals. If you budgeted correctly, your expenses total should be less than or equal to your income total.

Highlight the difference box and click the "AutoSum" function once more. It should pull up something similar to the picture above, only including your expenses total. We want it to include both totals.

Right above your spreadsheet, there should be an equation bar that looks like the picture below (Figure 7B). Move your cursor inside the parentheses and insert the income "total" grid number before the "expenses" grid number.

Should look something like: =SUM(B7-B19)

And then hit "enter" on your keyboard.

Copy and paste the difference throughout your months using the technique we used for summing.

                       Figure 7A

              Figure 7B

Here is what your filled out budget should look like. Some of the values could easily be copy and pasted over, but the utilities value had to be estimated.

We will talk more about tweaking your budget according to your actual spending in the next section.

<Figure 8 above>

Fill in the Blanks!

While you have the income "" box highlighted, click on the button.

Fill in the Blanks!

Be sure to hit the "" after you drag over your boxes, or the will not paste over. 

How can I use the Sum function to find the difference between two values?

  • Write "find difference" in the box.
  • By moving your cursor inside the parentheses in the equation bar and inserting the expense "total" grid number before the income "total" grid number.
  • By moving your cursor inside the parentheses in the equation bar and inserting the income "total" grid number, followed by a dash and the "expenses" grid number.

4. Tracking Your Expenses: Be Honest With Yourself

Keep a Journal

Tracking your expenses can seem a little tedious at first...

But keeping a small journal on your person at all times to track the date, category, and cost of your expenses can help you see just how much you spend with your credit or debit card.

Tip: Forgot Your Notebook at Home?

An old scrap piece of paper will do just fine. 

The picture to your left is from a little shopping trip I took in May. 

I needed gas, so I wrote down the date and category of my expense before going shopping for a couple new things that I also wrote down on my little scrap piece of paper.

Enter exactly how much you spent.

Categorize your spending better by using tabs.

You can see your spending better by categorizing your spending by section.

These are tabs.

They are located at the bottom of your spreadsheet and you can have as many as you want in your Budget document. 

Tabs can help you subcategorize your total expenses.


You can rename these tabs to fit the category you are looking for, as I have done above.

I have the general budget that I want to follow, then my car tab for all my gas and car expenses, as well as my leisure tab for all of my non-essential activities.

Example

The spreadsheet to left is an example of how your tabs should look. This list should look almost exactly like your expenses journal, just put into categories.

I wrote down all of my leisure expenses for May, including the date, activity/location, cost, and whether I used credit or debit. 

You can also use the same Sum function to see your total cost, then input the total cost in your original budget to track how much you actually spent. 

Your leisure spending should not be more than you have allocated already.






I wrote down all of my leisure expenses for May, including the date, activity/location, cost, and whether I used credit or debit. 

You can also use the same Sum function to see your total cost, then input the total cost in your original budget to track how much you actually spent. 

Your leisure spending should not be more than you have allocated already.

Match it!

  • Journal
    Should be kept with you at all times to track your expenses.
  • Tabs
    Can help you organize your categories more inside of your spreadsheet.
  • Date, Activity, Cost, Card type
    The categories you should use to track your expenses.

5. End Note and Final Discussion

End Note and Final Discussion

You're Basically Done!

If you've read all the sections, followed along, and passed the quizzes, then you are on your way to an on-track, money-conscious lifestyle!

There are a few other things that you can do with your budget, including adding your own personal style through different colors and fonts, but you can play around with these styles on excel. Remember that there is always an undo button!


EndNote

If you've read all the sections, followed along, and passed the quizzes, then you are on your way to an on-track, money-conscious lifestyle!

When you're off budgeting, just remember these three most important things:

  1. Set Goals - long-term and short-term
  2. Keep a journal to track your expenses
  3. Use the Sum function to keep a running total of expenses