Ready to finally start using a budget? You've found the best place to learn how to build a budget from scratch. In this guide you'll learn how to build a brand new budget from scratch. BONUS! Download the spreadsheet budget totally free. This is part 1 of a budget series that will take you through tons of awesome budget options.

How to Create a Budget in 5 Steps with Spreadsheet Download

How to Create a Budget in 5 Steps with Spreadsheet Download

This is part 1 of a series on budgeting. If you haven’t already checked out the other guides, you can check them out here:

Part 1 - How to Create a Budget in 5 Steps With Spreadsheet Download
Part 2 - How to Create a Budget in Mint in 6 Steps
Part 3 - How to Create an Automated Budget With Level Money
Part 4 - How to Create a Budget in YNAB (You Need a Budget)

Some people hear the word budget and cringe. It’s not that bad! In fact, it’s pretty cool once you are done and able to see where all your money is coming from and where it is going.

It gives you a really good sense of clarity and control over your financial picture. If you don’t have one, you need one. You’ll thank me once you’re done! :)

 In my opinion it’s the #1 way you can get your money under control, start to eliminate debt, and to begin building wealth.

 In this guide I’m going to walk you through creating a simple and AWESOME budget just using a spreadsheet. If you don’t already have a spreadsheet software, you can always sign for the awesome and free Google Sheets.

 Here are a couple options you can use: 

  • Microsoft Excel (COSTS $)

  • Google Sheets (FREE)

It’s totally up to you. I prefer FREE, but either one will work fine. For this guide I’ll be taking you through the steps in Google Sheets.

Pull up a new spreadsheet in your software and let’s get started!


First off, let’s briefly talk about what we are going to do and how it works. This will be a “zero based budget.” In normal words, this just means that every dollar you receive as income will be assigned to a budget category. There will be no money not budgeted.

To make it even simpler imagine the old days..

You get your paycheck and take it down to the bank and cash it. So now you’ve got a wad of real cash. Now you take it home and sit down at the dining room table. You pull out a pack of envelopes and mark down all the various things you want to do with that money. Expenses like electricity and possibly savings for a vacation for example.

You stuff that cash in all the various envelopes. You do this until all the cash is gone. This is zero based budgeting. It’s basically assigning every dollar to a job.

Eventually you’ll need to pay the electricity bill or book that vacation and then you’ll pull money out of that envelope and pay for it.

Make sense? That’s basically what we are going to do, but in a modern digital spreadsheet.



The first thing you need to add is your income. Here is an example:

Budget Monthly Income

Budget Monthly Income

I start off by giving the income section a header called Monthly Income. I size this a little larger than the rest of the columns with a size 18 font.

Next in column A you will want to list all of your income. Anything you can think of. Here are some examples to get you started:

  • Paychecks

  • Side Hustles

  • Social Security

  • Child Support

  • Alimony

In the next column (B) list out the amount you receive monthly from these sources. Take note that these are net incomes, not gross.

What I mean by that is that these are after taxes, health insurance deductions, and anything else that comes out of the income. This is the amount that actually deposits into your bank account. This is the money you can actually use and spend.

Once you’ve entered the dollar amounts, highlight them and click on the $ sign in the toolbar. This will convert those cells to dollar format which just looks better.

Click on the box in the upper left corner above the 1 cell and to the left of the A cell. This highlights all of the cells. I click on the left alignment button to align all of the cells to the left. Again, I just think this looks better overall.

Finally, let’s add all your income sources together to create a TOTAL MONTHLY INCOME field. If you have more than one highlight all the dollar amounts in column B and click on the Functions button in the top toolbar. Click on Sum. Hit Enter on your keyboard.

This will create a automatically calculated sum of all of your income!


Next, we’re going to add the expenses section and all the various categories of expenses you may have.

Let’s start off again like we did in the previous step by creating a section header. Give this section a header called Monthly Expenses. I size this a little larger than the rest of the columns with a size 18 font again.

Here is a screenshot of what we are doing:

Budget Monthly Expenses Categories

Budget Monthly Expenses Categories

To make the formulas easier in the next sections, make sure you put everything in the exact cells in the screenshot.

Start by creating a section for HOUSING and then repeat for all other categories like you saw in the above screenshot for every category of expense. Here is a list of categories I used, but feel free to modify any them if you need:



  • FOOD



  • DEBT






The next step is to add in all your expenses under the categories. Go through each category and think of everything you spend money on consistently each month. Put in the name of the expense and the amount. If it varies, I would estimate a bit high to make sure you have enough set aside.

If there is anything you spend money on that doesn’t fall into one of the categories you can always put them under the ALL OTHER category.

Budget Monthly Expenses

Budget Monthly Expenses

Here are some examples I’ve created that you can use or modify as needed in your own budget:

  • Rent

  • Apartment Insurance

  • Groceries

  • Eating Out

  • Netflix

  • Movies

  • Books

  • Charity / Church

  • Gym

  • Car Payment

  • Car Insurance

  • Gas

  • Electricity

  • Cell Phone

  • Water

  • Trash

  • Credit Card Debt

  • Student Loan Debt

  • Clothes

To make it look better, again, highlight the fields that are dollar amounts and click on the $ sign in the toolbar. This will convert those cells to dollar format.

Once you’ve got all your expenses listed, it’s time to total it all up. Just like when totaled up your income, we’ll do the same with all your expenses.

Under each category, highlight all of the expense amounts and click on the Functions button in the top toolbar. Click on Sum. Hit Enter on your keyboard.


Your total for the category is automatically added up. Just like in income, if you change a expense number, it will automatically re add it up for you!

OK, now for the last part of expenses. Let’s add up all of your expenses into one big total. So how do we do that?

It’s not hard at all. In rows A26 and B26 I created a field for TOTAL EXPENSES and a field for the number like this:


The number is not manually entered. It is automatically calculated using a formula. If you look at the budget worksheet, you’ll notice that all the totals are in the fields:

B16, E16, H16, K16, N16, B24, E24, H24, K24

We need to create a formula that adds up all those fields. We’ll use the SUM formula to do this.

In field B26, next to total expenses, enter this:


That’s it! That simple formula adds up all of the expense total fields into one total expense!

Now, anytime you edit a field, the entire budget updates automatically, like magic!


Now this part is bit funner. This is where you get to let your imagination run wild. Sit back, relax, and think about what you want in life. What would make you happy? Do you have a bucket list of things you want to do?

Think of everything you want to do. Here are some ideas to get you started:

  • New Home Down Payment

  • New Car

  • Vacation

  • RV

  • Adventure IE Skydiving

  • Christmas Gifts

Let’s take these goals and turn them into actions that can help us budget to get there in the future.

Create a new section called MONTHLY GOALS below you expenses again at a size 18 font to show that it is a header.

Here is a screenshot of what we are going to do:

Budget Monthly Goals

Budget Monthly Goals

Next we are going to create a new line below MONTHLY GOALS like this:


Under the GOALS column list out everything you wanted to begin saving for. In the TOTAL GOAL column list out how much you expect it to cost you total.  Finally, in the YEARS TO REACH GOAL column enter how many years you want to take to reach that goal.

If you want accomplish it in less than a year you can use decimals. (This is to keep the formula simple)

.25 = 3 months

.50 = 6 month

.75 = 9 months

1 = 12 months or 1 year

Here is an example of what it will look like:




House Down Payment | $166.67 | $10,000.00 | 5

New Car | $416.67 | $15,000.00 | 3

Vacation | $250.00 | $3,000.00 | 1


Use the screenshot above as reference as well.

Under the MONTHLY column we’re going to create a formula again to automatically calculate how much you need to be saving each month to reach that total goal in the amount of years you chose.

This basically takes your TOTAL GOAL and divides it by YEARS TO REACH GOAL for each goal.


Under the column MONTHLY next to your first goal enter this formula:


You can copy that field and past it next to each goal under the MONTHLY column and it will update the columns automatically. Here is the three formulas in my budget worksheet:




Now, when you adjust your TOTAL GOAL or the YEARS TO REACH GOAL, the MONTHLY amount will automatically update!

One more formula! Let’s SUM up the MONTHLY goals numbers to get a total amount spent on goals.

Create a field called TOTAL GOALS in column A. Highlight all the MONTHLY goals numbers all the way down to above the field you will put the SUM in. Click the FORMULA button. Click SUM. Hit Enter. It will now automatically calculate how much you are spending on your goals.

It should automatically generate a sum and formula. Here is what it created:


Remember, if you have more than 3 or 4 goals, you’ll be using more columns thus your formula will be different to include the extra cells.

Lastly, let’s do some cleanup. Highlight all the fields that include dollar amounts and click on the $ button in the top bar to format those cells as dollar amounts.


Final step! Let’s figure out how much money you have left to budget!

Here is a screenshot of what we are going to do:

Budget Left to Budget

Budget Left to Budget

At the top of the spreadsheet in cell G3, enter: MONEY LEFT TO BUDGET:

I also bolded it so it stood out a bit.

In cell I4 we need to create a formula to determine how much of our income is left to budget if any. Basically what the formula will do is determine how much of the MONTHLY INCOME is left after subtracting the MONTHLY EXPENSES and MONTHLY GOALS:


Here is the formula you will need to put in I4 based on where those cells are on the spreadsheet:


Boom! You have a final number.

Now that number is either going to be positive or negative.

If it’s positive, you’ve got more money to budget. If all your expenses are covered you could add more to your goals. Increase that vacation budget or increase your emergency fund savings.

If it’s negative, you’re spending more money than you have coming in. It’s time to make some changes. Can you eliminate some of those expenses? If not, you may have to lower your expectations for your goals.

Either way, you want to get MONEY LEFT TO BUDGET back to $0. Make any adjustments necessary to get it back to $0, or near $0, and the great thing about this spreadsheet is it will automatically recalculate everything for you thanks to the formulas we created!

Here is a screenshot after I adjusted the budget to get to $0 (or near $0).

Monthly Budget Workshop Final

Monthly Budget Workshop Final



You may be wondering what about a section for transactions? Every time you buy something you may want to know how much you have left in each expense category or goals.

Yes, it’s totally possible to create another tab in this worksheet to track your transactions and calculate all that up for your based on your transactions but let’s not do that.


A spreadsheet is not the best tool for doing that. There are way better tools to do that and in the next guide I’ll dig into how to use a tool do just that in a much better and efficient way.

What the spreadsheet budget is great for is, understanding your money and getting a grasp on where it’s going.


After putting this together I’m hoping you're having an “AH HA” moment about your money. This is what a budget is for. It guides your plan and strategy for your money.

Feel free to download the spreadsheet I attached if you got lost at any moment and customize it as you need.

Look for the next guide soon, where I’ll take your budget to the next level with automatic transaction importing and categorization to make sure your money is following your budget.

David Shepherd Creator of Lets Automate Your Money