How to Use Excel for Flexible Money Management

Create and save a new Excel workbook. Create 8 columns with the following headings: Month, Day, Description, Save, Debit, Credit, Checking Balance, Savings Balance. Bold the headings, and use the freeze panes function to freeze the top row so that you always see it at the top of your spreadsheet (Hint: look under the View tab in Office 2007, or under Window in older versions). Format columns D through H as currency (right click, format cells), and choose to have negative amounts show up in red. Use your vast knowledge of Excel to make the spreadsheet pretty if you like, but avoid the table function of Excel 2007 -- it is a pain!
Type the name of the current month in the first row of the Month Column, and type today's day in first row of the day column. Type your current Checking Balance and Savings Balance in the first row of the appropriate columns.
Now, enter the recurring bills (rent, car payment, insurance, credit card, cell phone, etc.) that are coming up between now and your next paycheck, putting each one on a new row. Type in the date you actually mail the check to pay a bill or the date it is debited from your checking account. Type a generic description of the bill (ex., 'Discover Card'), and type the bill amount into the Debit column.
Enter rows (without date) for Gas, Grocery, and Miscellaneous. You should have actually created a budget at some point, so that you know about how much money you have to spend on these things. If you like, you can split Miscellaneous into additional categories. Round each bill amount UP to the nearest $5 or $10 (ex., $70, not $66).
Type in the date of your next paycheck, describe it (ex., Paycheck) and type the pay amount into the credit column. Round your approximate pay DOWN to the nearest $5 or $10 (ex., $1025 or $1020, not $1028). On the next row, enter the description Savings, and type the amount you plan to save from each paycheck into the Savings column.
Now, enter the recurring bills coming up between this paycheck and the next, followed by the Gas, Grocery, Miscellaneous categories. Then, enter the next paycheck amount, followed by savings. Repeat until you have entered all of the info for the next six months -- you should be able to copy and paste most of this info to save time. Enter any additional income as needed, typing the amount into the credit column. Be sure to type the name of the new month at the appropriate place.
Now that you have the basic framework, you need to enter formulas into the Checking Balance and Savings Balance columns so that it will automatically calculate for you. For this example, I am going to assume that your headings are in row 1, your starting balances are in row 2, and your columns are A-Month, B-Day, C-Description, D-Save, E-Debit, F-Credit, G-Checking Balance, and H-Savings Balance. In cell G3, enter =G2-D2-E2+F2 This will subtract any savings and debit and add any pay to your checking balance.In cell H3, enter =H2+D2 This will add the amount you save to your savings balance.Copy and paste these formulas into all of the cells of columns G and H.
Periodically -- once a week or before/after any unusual purchases -- look up your ACTUAL bank balances and type them into the balance column on the appropriate date. Be sure that all of the items listed before that date HAVE already come out of your account -- if not, you may need to shift a row up or down. If you move any rows, re-copy or retype the formulas in columns G and H to be sure they are correct.
Now, just look over your balances. Will your checking balance go into the red in two months? If so, you need to cut something out! Spend less on entertainment, eat Ramen, or as a last resort, reduce the amount you are paying to your credit card or saving. I find that actually having to cut those payment amounts makes me really re-think sushi lunches!
If you keep going into the red, you need to take a look at your bank statement to see where you are overspending your budget.Try to keep your savings balance above $100 at all times. If you have a good bit more, increase the amount you are paying on your credit card or saving -- don't just let that money sit there burning a hole in your pocket, or you will spend it.
Delete past months, and keep planning at least six months ahead. When you get used to this method, you will be able to realistically plan your spending, quickly see when you are spending too much, and adjust so that you don't go into the red!
VPS Hosting