Determining Your Monthly Income and Spending

• 1). Calculate your monthly post-tax income from the previous month. This will allow you to calculate money that you can actually spend.
  
  
• 2). Gather all of your monthly bills from last month. Also gather all of your receipts from last month, or check your debit and credit card statements, to determine what you spent and where it was spent.
  
  
• 3). Using your receipts, determine how much money was spent last month in the following areas: unavoidable expenses such as your rent or mortgage, groceries, car insurance payments, utility payments and other bills, short-term debt such as credit card bill payments, and optional expenses such as restaurant meals, movies and clothing purchases.
  
  

Creating the Budget in Microsoft Excel

• 1). Open Microsoft Excel. In cell A1, enter a title for your budget. Bold this title.
  In cell A2, enter the words "Monthly Income." In cell B2, enter your monthly income. Re-size cells as necessary.
  
  
• 2). Enter the words "Unavoidable Expenses" in cell A3, "Monthly Payment" in cell B3 and "Remaining Debt" in cell C3. Italicize these words. Underneath this line, enter titles for all of your unavoidable monthly payments in column A, the monthly payment in column B, and the remaining debt, if applicable, in column C. (This would be applicable for a mortgage, or a payment where you pay yearly until a full payment is made, such as for car insurance.) Highlight all text in this section and set the text as green.
  
  
• 3). Repeat the process for your short-term expenses, although you will only use the header "Short Term Expenses" and not the headers for "Monthly Payment" and "Remaining Debt." Fill in all applicable information, including your monthly payments and remaining debt. Select a different color for the text. Do the same for your optional expenses, dividing them into categories such as meals, entertainment and shopping. Choose a color for this text as well. You can also enter sections for savings and miscellaneous expenses.
  
  
• 4). After your final monthly expense, in italics, enter the words "Total Spent" in column A. In column B, using the sum function, add up all money spent in the previous month. In the next row, enter the words "Remaining Income." Here, you will subtract your total money spent from your monthly income. Assuming that your total spend is in cell B33, your Excel formula would be =B2-B33.
  
  
• 5). Rename the tab that your budget is on using the month and date of the budget. For example, you could call the sheet "April 2010."
  
  

Updating Your Budget Monthly

• 1). Right-click on the tab of your Excel worksheet and select "Move or Copy." Copy the sheet and rename it with the next month's month and year.
  
  
• 2). Update your budget in real time. Clear out all of last month's numbers (except your monthly income, if that does not change, and standard monthly payments). Leave all formulas in place. Each day, update your budget with information about money that you have spent. With this, you will be able to track when you spend the most and how much money remains in your monthly budget each day.
  
  
• 3). At the end of each month, adjust your remaining debts. For simple deductions, like car insurance, you can simply subtract the monthly payment from your total debt and update that in the spreadsheet. Other debts may be more difficult. You may need to consult a mortgage statement to see how much money you still owe on your mortgage. It is worth doing this, because you may become inspired to pay off extra principal by watching the effect it has on your overall debt.