The article Personal Budget Income Categories for Excel describes how to create the income side of a budget from scratch. After the income side has been determined, the next step in creating a personal budget is to track expenses.
Create a Budget in Microsoft Excel
The beauty of using Microsoft Excel for budgeting is that the exact categories can be defined exactly how the user wishes. This offers flexibility, but also creates the dilemma of how the categories should be defined. Expense categories can be defined at a high level, where multiple expenses are lumped into “buckets.” Alternatively, they can be defined narrowly, where every little expense is tracked separately.
This article is for those who would rather define budget expense categories at a fairly microscopic level. These expenses are broken down into two broad categories below- essential and discretionary costs.
Personal Budget Expense Categories- Essential Costs
Determining what is essential can be tricky. Is the television a necessity? Even if it isn’t, should it go in the essential category since the payment will be made no matter what? There are no clear cut rules here; it is just a good idea to try to separate mandatory expenses from those that can and may be eliminated through the budgeting process. Segregating the two makes it easier to see what a household’s “real” expenses are versus what is “extra.”
Below are some suggested categories to place in the mandatory section. Note that these expense categories assume the person is a homeowner, car owner, college graduate, and parent. The categories can be eliminated or expanded as necessary to adjust for other scenarios.
- AAA or other roadside service
- AD&D Insurance
- Bath Soap
- Cable Television
- Car Insurance
- Car Loan
- Car Service & Annual Inspection
- Car Tax & Registration
- Cell Phone
- Clothes Detergent
- Clothing
- College Loan
- Dental Insurance
- Deodorant
- Diapers
- Dining
- Dishwashing Detergent
- Electricity
- Face Wash
- Formula
- Gas
- Gifts Given
- Groceries
- Hair Cuts
- Home Maintenance
- Homeowner's Fees
- Household Repairs
- House Phone
- Internet
- Life Insurance
- Light Bulbs
- Lotion
- Medical Expenses
- Medical Insurance
- Miscellaneous Household Items
- Mortgage Payments (including escrow)
- Paper Napkins
- Postage
- Razors
- Shampoo & Conditioner
- Kitchen Soap
- Toilet Paper
- Household Tools
- Toothbrushes
- Toothpaste
- Trash Service
- Water Bill
Create a Budget – Personal Expense Categories for Discretionary Costs
Here are some discretionary cost categories:
- Entertainment
- Home Improvements
- Magazine Subscriptions
- Optional add-ons to services above – like DVR subscriptions for cable or call-waiting for the telephone
- Other Expenses
- Photos
- Vacation
Once the categories above have been input into Excel, make sure to tally total essential expenses, total discretionary expenses, and total monthly expenses. When these have been totaled, consider evaluating total income versus total expenses to determine if you have any money leftover at the end of the month or if a deficit exists.
Related articles:
How to Save Money by Cutting back on Spending- learn how to stop spending money unnecessarily.
Frugal Shopper Spending Habits- learn how to stop spending too much money and change spending habits.
Lena Gott - Lena Gott is a Certified Public Accountant who gives practical financial advice to her readers.
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