How to Use a 50/30/20 Budget Template in Excel
Do you want to manage your money better and achieve your financial goals? If so, you might want to try the 50/30/20 budget rule, a simple and effective way to plan your spending and saving. In this article, we will show you how to create and use a 50/30/20 budget template in Excel, as well as how to download a free one online.
What Is the 50/30/20 Budget Rule?
The 50/30/20 budget rule is a guideline for allocating your after-tax income into three categories: needs, wants, and savings. It was popularized by Senator Elizabeth Warren and her daughter, Amelia Warren Tyagi, in their book All Your Worth: The Ultimate Lifetime Money Plan.
50 30 20 budget template excel free download
The basic principle is to split your income as follows:
50% on needs: These are the essential expenses that you must pay to survive and fulfill your obligations, such as rent or mortgage, utilities, groceries, insurance, minimum debt payments, etc.
30% on wants: These are the discretionary expenses that you spend on things that make you happy and comfortable, but are not necessary for survival, such as dining out, hobbies, vacations, entertainment, etc.
20% on savings: These are the funds that you set aside for your future goals and emergencies, such as retirement savings, emergency fund, debt repayment above the minimum, investments, etc.
The purpose of the 50/30/20 budget rule is to help you balance your spending between your needs and wants while also saving for the future. It can also help you avoid overspending and under-saving by giving you a clear target to aim for.
How to Use Excel for Budgeting?
Excel is a powerful tool that can help you create and manage your budget easily. You can use Excel to:
Enter your income and expenses in a spreadsheet
Use formulas and functions to calculate your budget categories and totals
Create charts and graphs to visualize your spending and saving patterns
Analyze your data and compare your budget with your actual spending
Adjust your budget as needed based on your goals and circumstances
Using Excel for budgeting has many benefits, such as:
You can customize your budget template to fit your personal situation and preferences
You can track your progress and make changes easily
You can access your budget from anywhere using Excel online or mobile app
You can use various templates and resources available online for free or at a low cost
How to Create a 50/30/20 Budget Template in Excel?
If you want to create your own 50/30/20 budget template in Excel from scratch, you can follow these steps:
Step 1: Enter Your Monthly After-Tax IncomeTo start your budget, you need to know how much money you have to work with. Enter your monthly after-tax income in a cell, such as B2. This is the amount of money you receive in your bank account after taxes and deductions are taken out. You can use your pay stubs, bank statements, or tax returns to find this number.
Step 2: Calculate Your Needs, Wants, and Savings Categories
Next, you need to calculate how much money you should allocate to each of the three budget categories: needs, wants, and savings. To do this, you can use the following formulas:
For needs, multiply your income by 0.5 and enter the result in a cell, such as B3.
For wants, multiply your income by 0.3 and enter the result in a cell, such as B4.
For savings, multiply your income by 0.2 and enter the result in a cell, such as B5.
Alternatively, you can use the =SUMPRODUCT() function to calculate all three categories at once. For example, you can enter the following formula in B3 and drag it down to B5:
=SUMPRODUCT(B$2,0.5;0.3;0.2)
This formula will multiply your income by the corresponding percentage and return the result for each category.
Step 3: List Your Expenses and Assign Them to the Appropriate Category
Now that you have your budget categories, you need to list your expenses and assign them to the appropriate category. To do this, you can use the following steps:
Create a table with four columns: Expense, Amount, Category, and Subtotal.
In the Expense column, enter the names of your expenses, such as rent, groceries, car payment, etc.
In the Amount column, enter the monthly amounts of your expenses. You can use your bills, receipts, or bank statements to find these numbers.
In the Category column, enter the name of the budget category that each expense belongs to: needs, wants, or savings.
In the Subtotal column, use the =SUMIF() function to calculate the total amount of each category. For example, you can enter the following formula in E3 and drag it down to E5:
=SUMIF(D:D,D3,C:C)
This formula will sum up the amounts of all the expenses that match the category in D3.
Step 4: Compare Your Budget with Your Actual Spending and Adjust as Needed
The final step is to compare your budget with your actual spending and adjust as needed. To do this, you can use the following steps:
Create a chart with two bars for each category: one for your budget and one for your actual spending.
Select your budget and actual spending data and insert a clustered column chart from the Insert tab.
Format your chart as desired, such as adding titles, labels, colors, etc.
Analyze your chart and see how well you are sticking to your budget. Are you spending more or less than you planned on each category? Are there any areas where you can cut back or save more?
Adjust your budget as needed based on your analysis. You can change your income or expense amounts or percentages as needed.
How to Download a Free 50/30/20 Budget Template in Excel?How to Download a Free 50/30/20 Budget Template in Excel?
If you don't want to create your own 50/30/20 budget template in Excel, you can also download one for free online. There are many websites that offer free budget templates that you can use or customize to fit your needs. Here are two options that you can try:
Option 1: Use a Microsoft Excel Template
One option is to use a Microsoft Excel template that is already designed for the 50/30/20 budget rule. You can find this template on the Microsoft Office website or by searching for "50/30/20 budget calculator" in the Excel app. To use this template, you need to:
Download the template and open it in Excel.
Enter your monthly after-tax income in cell B2.
Enter your expenses and their amounts in the table below.
Select the category for each expense from the drop-down list in column D.
View your budget summary and chart on the right side of the worksheet.
Compare your budget with your actual spending and adjust as needed.
This template is easy to use and has some features that can help you with your budgeting, such as:
It automatically calculates your budget categories and totals based on your income and expenses.
It shows you how much money you have left or overspent in each category.
It allows you to change the percentage of each category if you want to follow a different budget rule.
It provides some tips and suggestions on how to improve your budgeting habits.
Option 2: Use a Third-Party Budget Template
Another option is to use a third-party budget template that is created by other websites or individuals. You can find many free budget templates online that are compatible with Excel or Google Sheets. For example, you can check out these websites that offer free 50/30/20 budget templates:
: This website offers a free 50/30/20 budget calculator that you can download as an Excel spreadsheet or use online. It also provides some examples and explanations of each budget category.
: This website offers a free budget planner worksheet that you can download as an Excel spreadsheet or use online. It also shows you how your spending aligns with the 50/30/20 budget rule and provides some tips and resources for budgeting.
: This website offers a free 50/30/20 budget template that you can download as an Excel spreadsheet. It also explains the basics of the 50/30/20 budget rule and how to use the template.
To use these templates, you need to:
Download the template and open it in Excel or Google Sheets.
Enter your monthly after-tax income in the designated cell.
Enter your expenses and their amounts in the table below.
Select or enter the category for each expense in the corresponding column.
View your budget summary and chart on the same or another worksheet.
Compare your budget with your actual spending and adjust as needed.
ConclusionConclusion
In this article, we have shown you how to use a 50/30/20 budget template in Excel, as well as how to download one for free online. We hope that this article has helped you understand the benefits of using the 50/30/20 budget rule and Excel for budgeting, and how to create and use a budget template that suits your needs and goals.
Here are some key takeaways and tips from this article:
The 50/30/20 budget rule is a simple and effective way to plan your spending and saving by allocating your after-tax income into three categories: needs, wants, and savings.
Excel is a powerful tool that can help you create and manage your budget easily by using formulas, functions, charts, and templates.
You can create your own 50/30/20 budget template in Excel by following four steps: enter your income, calculate your categories, list your expenses, and compare your budget with your actual spending.
You can also download a free 50/30/20 budget template in Excel from various websites that offer free budget templates that you can use or customize.
You should review and adjust your budget regularly based on your income, expenses, goals, and circumstances.
If you want to learn more about budgeting and personal finance, you can check out these resources:
: This is the book that popularized the 50/30/20 budget rule and provides a comprehensive guide on how to manage your money and achieve financial security.
: This is the official website of Microsoft Excel that offers tutorials, tips, templates, and support for using Excel for various purposes, including budgeting.
: This is a website that offers various tools, calculators, articles, and advice on various topics related to personal finance, such as budgeting, saving, investing, debt, credit cards, etc.
FAQs
Here are some frequently asked questions and answers about the 50/30/20 budget template in Excel:
What are some examples of needs, wants, and savings?
Needs are the essential expenses that you must pay to survive and fulfill your obligations, such as rent or mortgage, utilities, groceries, insurance, minimum debt payments, etc. Wants are the discretionary expenses that you spend on things that make you happy and comfortable, but are not necessary for survival, such as dining out, hobbies, vacations, entertainment, etc. Savings are the funds that you set aside for your future goals and emergencies, such as retirement savings, emergency fund, debt repayment above the minimum, investments, etc.
How can I track my spending and income in Excel?How can I track my spending and income in Excel?
One way to track your spending and income in Excel is to use a separate worksheet or workbook to record your transactions. You can enter the date, amount, category, and description of each transaction in a table, and use formulas and functions to calculate your monthly totals and averages. You can also use charts and graphs to visualize your spending and income trends over time. You can then link your transaction data to your budget worksheet or workbook using the =SUMIFS() or =VLOOKUP() functions, so that your budget reflects your actual spending and income.
How can I customize my budget template to fit my personal situation?
You can customize your budget template to fit your personal situation by changing the income or expense amounts or percentages, adding or deleting categories or subcategories, renaming or reordering the categories or subcategories, formatting the cells or charts, etc. You can also use conditional formatting, data validation, or protection features to make your budget template more user-friendly and error-proof.
How can I use forecasting and seasonality functions in Excel for budgeting?
You can use forecasting and seasonality functions in Excel for budgeting to predict your future income or expenses based on historical data and trends. For example, you can use the =FORECAST.LINEAR() function to estimate your income or expenses for the next month or year based on a linear trend. You can also use the =ETS.SEASONALITY() function to identify the seasonal pattern of your income or expenses based on a time series. These functions can help you plan ahead and adjust your budget accordingly.
What are some alternatives to the 50/30/20 budget rule?
Some alternatives to the 50/30/20 budget rule are:
The 80/20 budget rule: This is a simpler version of the 50/30/20 budget rule that allocates 80% of your income to spending and 20% to saving.
The zero-based budget: This is a more detailed and strict version of the 50/30/20 budget rule that assigns every dollar of your income to a specific category or goal, leaving no room for overspending or under-saving.
The envelope system: This is a more physical and visual version of the 50/30/20 budget rule that uses cash and envelopes to divide your income into categories and subcategories, limiting your spending to the amount in each envelope.
44f88ac181