How to Create a Monthly Budget in Excel

Creating a monthly budget in Excel might sound intimidating at first, but trust me—it's easier than you think. Whether you're trying to stop living paycheck to paycheck or just want to understand where your money goes each month, budgeting is the first big step toward financial control. Excel is one of the best tools to help you get started because it’s flexible, customizable, and (most importantly) free if you already have it installed on your computer.

In this guide, I’ll walk you through how to set up your monthly budget in Excel in a way that’s simple, beginner-friendly, and totally doable—even if you’ve never touched a spreadsheet before.

Why Use Excel for Your Monthly Budget?

Before we jump into the how-to, let’s talk about why Excel is a great choice for budgeting:

• You have full control over how your budget looks and functions.

• You can easily adjust numbers and categories as your income or expenses change.

• Excel has built-in formulas that do the math for you.

• It works offline, so you don’t need an internet connection.

And if you're already using Excel at work or school, you're one step ahead!

Plus, Excel is scalable. Whether you're budgeting just for yourself or for a whole family, Excel lets you add as many rows and categories as you need without limitations. It’s also compatible with other Microsoft tools, so you can easily share your budget with a partner or roommate.

Step 1: List Your Monthly Income

Start by opening a new Excel spreadsheet. In the first section, write down all your income sources for the month. That might include:

• Paychecks

• Freelance or side hustle income

• Rental income

• Government benefits (like Social Security or unemployment)

• Child support or alimony

Example:

Income Source	Amount ($)
Paycheck	3,000
Freelance Writing	500
Total Income	=SUM(B2:B3)

Using Excel’s SUM function helps you automatically total everything.

If your income varies from month to month, you can use the average of the past 3-6 months to estimate a more stable number for planning purposes.

Step 2: Identify Your Expenses

Next, it’s time to list all of your monthly expenses. Break them down into categories, like:

• Housing (rent or mortgage)

• Utilities (electricity, water, gas)

• Transportation (gas, insurance, public transit)

• Groceries

• Subscriptions (Netflix, Spotify, etc.)

• Debt payments (credit cards, student loans)

• Entertainment (dining out, movies, hobbies)

• Savings and investments

• Childcare or school expenses

Example:

Expense Category	Amount ($)
Rent	1,200
Groceries	400
Internet	60
Streaming Services	30
Car Payment	300
Total Expenses	=SUM(B6:B10)

Be as detailed as possible—even the small purchases add up. Reviewing your last few bank statements or credit card bills can help you remember categories you might otherwise forget.

Step 3: Compare Income and Expenses

Now that you have both your income and expenses listed, it's time to compare them. In a new row, subtract your total expenses from your total income.

= B4 - B11

If the number is positive, great! That means you’re spending less than you earn. If it’s negative, don’t worry—you just need to make some adjustments, like cutting back on non-essential expenses or finding ways to increase your income.

Step 4: Organize with Categories and Colors

To make your monthly budget Excel sheet easier to read, use colors and categories. Highlight income rows in green, fixed expenses in orange, and flexible expenses in blue. This visual cue helps you quickly spot where you can make changes if needed.

You can even use conditional formatting in Excel to highlight when you overspend in a category. For example, you can set a rule to turn a cell red if your "Actual" column exceeds the "Budgeted" amount.

Step 5: Set Financial Goals

Budgeting isn’t just about paying bills—it’s also about planning for your future. Maybe you want to:

• Build an emergency fund

• Pay off credit card debt

• Save for a vacation or new car

• Start investing

• Plan for a big life event (wedding, baby, moving)

Create a separate section in your Excel sheet to track your progress on each goal. That way, you stay motivated and on track. For example:

Goal	Target Amount	Current Savings	Remaining
Emergency Fund	5,000	1,200	3,800

You can update this monthly to see how you're progressing.

Step 6: Choose a Budgeting Method That Works for You

Not sure how much to allocate to each category? Try using a budgeting method that fits your lifestyle. Here are two beginner-friendly methods:

The 50/30/20 Rule

This method splits your income into:

• 50% for needs

• 30% for wants

• 20% for savings and debt repayment

It’s a great starting point if you’re not sure where to begin.

Learn more in our guide: 50/30/20 Budget Rule Explained

Zero-Based Budgeting

With zero-based budgeting, every dollar has a job. Your income minus your expenses should equal zero. This method helps you be very intentional with your money.

Curious? Read this: Zero-Based Budget Explained

Step 7: Track Your Spending Weekly

Your monthly budget Excel file isn't "set it and forget it."
Make it a habit to check in weekly and update your actual spending. Compare what you planned to what you actually spent. This helps you:

• Catch overspending early

• Adjust your categories as needed

• Stay mindful of your financial habits

Use a column next to each budgeted item for your actual expenses. Example:

Category	Budgeted ($)	Actual ($)	Difference ($)
Groceries	400	450	-50

Over time, these small adjustments can make a big difference in your ability to save money and reduce debt.

Step 8: Use Excel Templates (Optional)

If starting from scratch feels overwhelming, use a free Excel budget template. Microsoft offers several starter templates, or you can customize one to suit your needs. You can find these by opening Excel, selecting "New," and searching for "budget."

Some templates include:

• Personal monthly budget

• Family budget planner

• Expense tracker

• Debt payoff tracker

Still feeling stuck? Check out our article: Budgeting Tips for Beginners for extra guidance.

Final Thoughts

Creating a monthly budget in Excel doesn’t have to be stressful. With just a few steps, you can gain control over your money and start making progress toward your financial goals. Remember, budgeting is a skill, not a one-time task. The more you practice, the better you'll get. Start simple, stay consistent, and don’t be afraid to adjust along the way.

If you ever feel like giving up, just remember: even small improvements matter. By taking control of your monthly budget in Excel, you’re giving yourself the power to make better financial decisions and build a more secure future.