If you would like to use your tax refund to start getting out of debt this year, you’re not alone. Thousands of Americans are looking for ways to pay off unwanted debts, and using their tax return at the beginning of the New Year is one way they can accomplish this. One of the best ways to determine where your money will be going is to create a personal budget on an Excel spreadsheet so that you can see exactly what you need to do. In this article, we will show you how creating a budget is very simple to do using Excel, plus how to use your tax refund to pay off some of your existing debts.
How to Create a New Budget Spreadsheet
First of all, you need to have Microsoft Excel on your computer. If you do not own this program, there is another program called Open Office Calc. It is a free software program which is available for download at the website OpenOffice.org. However, for the purpose of this article, we will be showing you how to accomplish this with Microsoft Excel.
The first thing that you want to do is open a new spreadsheet file that will detail your monthly budget for the year. You will want to copy the following information into the very top row of the spreadsheet (minus the quotes):
“Date”, “Description”, “In”, “Out” “Total”
You should save this file as a master copy so that if you want to make a weekly budget using the same setup, you can quickly and easily create an additional file and save it under a different name. You can also do this very easily by scrolling to the bottom of the spreadsheet, right-click your mouse, and select “copy sheet” which will automatically copy the master copy to a new spreadsheet. You can then save it under the filename of your choice (Monthly Budget, Weekly Budget, etc).
Once this is done, you can begin to budget your money.
How to Budget Your Money Using This Excel Spreadsheet
Starting with the Monthly Budget worksheet, you can begin to add the necessary data. First put your income for the month under the column “In”. You can also list your recurring bills in the column “Out”, making sure to add a “-” in front of the amount as it represents an amount being subtracted from your income. Continue to list all of your income and expenses, along with the dates and descriptions associated with each one. Once this is complete, it will then be able to calculate your monthly budget.
How to Calculate Your Monthly Budget with Your Excel Spreadsheet
After all of the information has been input into the spreadsheet, you now need to use the “Total” column, the last one on the list. You’ll want to first click the top spot in the “Total” column and then click the “Auto Sum” button on the toolbar at the top of the spreadsheet. Then, click the first box in the “Out” column, press your control key, then click the top box in the “In” column. This will automatically calculate the total for your income and expenses in that row. You will want to do this for each row until you get to the bottom. Then, once you have all of the calculations in the “Total” column, drag your cursor down until you are a few spaces below the last calculation, and click “Auto Sum” once again. This will give you the grand total for all of your income and expenses at the bottom of the “Total” column.
How to Evaluate Your Personal Budget
This final number that you have calculated will be the amount of money that you should have left over at the end of the month if you adhere to the budget that you have just calculated. A negative figure represents having more expenses than income. If the figure is positive, then you will have money left over at the end of the month. Once you have gone through the process of creating a budget, you will be able to adjust your monthly budget very easily, and using your tax refund, you will be able to calculate how to pay off existing debts using your tax refund using this handy Excel spreadsheet.
Melanie Mathis is a credit analyst and a writer for 8 years. She has been participating in the programs of http://www.newhorizon.org such as their continuous effort in giving out Credit Repair Tips. Also check NHBS list of Bad Credit Credit Cards