How to Use an Excel Spreadsheet for Your Budget (w/Download)

Here’s a post for anyone who gets shivers down his or her spine at the prospect of regularly tracking his or her expenses.

One of the most powerful tools for saving for early retirement is the humble, simple, elegant Excel personal budget template. 

Some argue you should NOT budget for spending. The notion is that when you do, you’re setting yourself up to spend money without discretion. It’s expected the money will be spent.

I’m curious if I’d save more money, AND be further along the early retirement path if I just chucked the spreadsheet altogether. But then…

Your Personal Budget (The “101”)

Admittedly, I am a spreadsheet addict. Not the type that lives and breathes macros and fancy pivot tables mind you. Nope. I just get excited about basic formulas and figures in nice, tidy cells.

I can sit and play with the cell shades, borders, and fonts and wonder what foothills and idyllic streams my early retired blogger friends are hiking by at the moment. Because naturally, I maintain my budget spreadsheets while at work.

(That’s a little tip for you by the way. Just remember to email a copy of your budget to your email account on a regular schedule, in case something ominous happens.)

If anything, I’d argue to keep it simple when it comes to tracking your income and expenses. I’ve refined this spreadsheet model for over twenty years.

It’s a little fascinating to think that this template has evolved over that time, from THE SAME FILE, spanning many versions of Microsoft Excel. How this thing hasn’t become corrupted by now I’ll never know…

Don’t freak out. I wish I made as much money as what’s shown in “Paycheck-Net”. The rest is pretty close to my actual household income.

Our savings rate is closer to 70%, but the “Stash Rate” formula isn’t factoring in our mortgage principal and 401K / HSA contributions.

The expenses are the real deal. Yes, we pay a bonus for our nanny. Retention is a good thing when you’re trying to find reliable childcare.

Oh yeah. Child-care. This expense rocks your budget big time. 

How I Use My Excel Spreadsheet to Save Money

The most useful aspect of this budget template is that I can see exactly where our money is going every month. Every monthly bill is up for scrutiny. I open this .xls bad boy every single day at the office and often keep it open in the background…

(Unless I’m hosting a WebEx meeting of course. Yes, I made the mistake a couple of years ago of hitting the old “share screen” button without knowing it, and about six other colleagues got a five-minute review of my finances while I fiddled with my phone. Idiot.)

A relatively recent addition to the template helps me plan for monthly fluctuations in income and expenses. Rarely does anyone have a budget where each month has the same inflows and outflows? I kind of think of this as the “not getting caught with yer pants down” section:

There are spikes in the “Gross” columns to account for bumps in your normal pay. An annual bonus in February is one. And also, in January and July, the sale of six months of employee stock purchase plan stock.

I use the “Scheduled hits” column to track larger scheduled expenses throughout the year, plan for them and ensure I’m keeping enough in the old checking account to cover the biggie bills. Rocket science, right?

Focus on Cash Flow, Not Net Worth

Now for the punchline… I understand a lot of folks care deeply about net worth and I admit I care somewhat too. That said, I still want you to focus on cash flow first. Here is what the simple asset vs. liability section of my budget looks like.

The one real number in there is the mortgage amount left on the primary residence. It’s our main focus right now to pay that sucker off, as part of the master plan. It still feels like we’re only at Base Camp staring up at the Hilary Step.

Our net worth is a bit north of the one depicted above. Maybe down the road I’ll grow a pair and share the real deal. Just not quite ready yet.

Rental Property Management Spreadsheet Magic

If you happen to have a side gig that involves real estate rentals or short-term vacation rentals, the mighty spreadsheet will come in handy. With our five properties, I keep a workbook that tracks all of the expenses and rents.

Come tax time, it’s easy to roll up and categorize expenses for each address so my accountant can pull together our returns.

Keeping track of rental expenses is super important to ensure you’re maximizing return on investment. Some year’s maintenance is light and I’ll consider investing in improvements like a new roof or gutters.

In other years I’ll get hit with everything at once and those discretionary investments have to be deferred.

The simple and elegant Excel template has been incredibly useful for managing our vacation rental in Northern Michigan. Several times a week I’ll make an update to capture a new booking or payment to our cleaner.

It’s vital to track the complete breakdown of in-flows and out-flows for tax purposes. Here’s a snippet:

Download My Excel Spreadsheet Budget Template

Here is the personal budget Excel template reviewed earlier in this post:

I’ll add the rental tracker template soon.

There are additional tabs in the simple personal budget template that I use to track actual expenses throughout the year, including charitable donations.

I also have a few special “early retirement planning” tabs to help me play out scenarios for maintaining a certain income between the time I retire early and age 60.

It’s important to create and maintain a budget, and do it with discipline. Carve out a few minutes each day, or 15-30 minutes weekly to capture expenses and balances. The rigor you put into maintaining your budget brings you to focus and gets you closer to your financial goals.

I also recommend checking out the excellent Route to Retire expense tracker. 

Have a great weekend, good readers. And please remember to take a break from spreadsheets and get outside!