A step-by-step guide to creating a budget from scratch using a free Excel spreadsheet!!

FREE SPREADSHEET TEMPLATE: https://docs.google.com/spreadsheets/d/1Nl9VjBFTvgN3o2cmBEvZHNhNs-Z8cCj60natgBKahTg/edit?usp=sharing

*(To make a copy, go to /"FILE and MAKE A COPY/")*

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Chapters

00:00 Start here
00:49 Step 1: Get ready
02:02 Step 2: Track your expenses
05:14 Step 3: Subtract expenses from income
07:02 Step 4: Analyze your expenses
11:14 Step 5: Create Savings Goals
12:33 Step 6: Keep Revising and Revisiting Constantly

Creating a budget is something that gives you the power to take control of your financial situation. In this video I give a step by step guide on how to create a budget from scratch.

Step 1: Get ready

Before you start creating your budget, you will need to gather the materials you need to create it. The first thing you will need is all of your statements that show your expenses from the past month, such as bank statements, credit card statements, and debt statements. The second thing you will need is to open the free spreadsheet linked above. To make a copy, click on /"File and Make a Copy."/" Now we can start creating our budget.

Step 2: Track your expenses

The first step in creating a budget is to take the time to record all of your expenses from the past month in the spreadsheet. This takes time, but it will give you a complete picture of your financial situation. First, fill in the date and the expenses you made. Then, in the /"Expense category/" column, choose the appropriate category for the expense. Then, in the /"Expense type/" category, choose whether it is a /"Fixed expense/", meaning the expense is the same amount every month, such as rent; or /"Variable expense/", meaning the expense is a different amount every month. Then, choose whether it is a want or a need in the /"Want/Necessity/" column. Finally, enter the exact amount down to the cent in the /"Amount/" column.

Take some time to write down all your expenses from the past month. The graphs will automatically appear on the side and give you a clear picture of your finances.

Step 3: Subtract expenses from income

A sustainable budget is a budget where you spend less than you earn. To figure this out, all you need to do is subtract your expenses from your income. At the bottom of the spreadsheet is a tab labeled "Budget Breakdown", go to that worksheet. In the first table, you need to put your sources of income. On the right, the information will automatically fill in and show the remaining amount. If you are spending more than you earn, you need to analyze your budget.

Step 4: Analyze your expenses

Since we have tracked all of our expenses in the spreadsheet, we can easily analyze our expenses to see why our budget is unsustainable and how we can fix it. To do that, we need to look at three things. The first is our wanted/needed expenses, where we can easily eliminate our wants to save money. The second is our variable expenses, where we can analyze if anything can be reduced or eliminated. If there is anything that can be reduced, go to the /"Budget Breakdown/" tab and record it in the /"Variable Expenses Savings/" table. The third is our fixed expenses and see if anything can be reduced or eliminated. If there is anything that can be reduced, go to the /"Fixed Expenses Savings/" table and record it.

Once you analyze the different things you can save money on and enter them into the tables, they will automatically be filled in the blue table. This will show you if your budget is feasible with the savings.

Step 5: Create Savings Goals

Once you have a sustainable budget where you don’t spend more than you earn, you can create savings goals. There is a tab on the spreadsheet called “Savings Goals” where you can record your financial goals. At the top is the amount of money that is left after all your bills are paid, and you can use that to create realistic goals.

Step 6: Keep reviewing and revising continuously

There is never a point where you are done with your budget, but it is something that you should constantly review and revise to ensure that you are living in a sustainable way. Over time, your lifestyle and spending habits will change and so you will need to constantly update it. However, once you have created a sustainable budget, it will allow you to have more control over your financial life.

**I am not a financial advisor. The ideas presented in this video are for entertainment purposes only. You are responsible for the financial decisions you make. The links above are affiliate links. If you click on them and order, I will receive a commission at no cost to you. **

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