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How to Create a Budget Using this Simple Spreadsheet

Reading time: 4 Minutes

April 6th, 2021

grid with icons and word 'budget' in center grid with icons and word 'budget' in center

Having control of your finances is an amazing feeling. There is a sense of calm, power, and freedom knowing how much money you have available to put towards your wants, needs, and savings goals. Once you understand your bigger picture and what you want to accomplish with a personal or household budget, creating a budget will help ensure you have a plan to achieve your financial goals. And with this little bit of planning, you're on your way to saving for the things you want, managing your debt, and planning your future.

Here are the steps you need to take:

1. Collect Financial Paperwork

To get started with your budget, you'll need to do a little financial housekeeping and collect your financial paperwork (like bills, bank statements, receipts). This includes:


Paystubs, income from side gigs, tips, commissions, social security, alimony, child support, etc.


Try organizing expenses by the following categories:


  • Rent/Mortgage
  • Insurance
  • Utilities (Electric, Gas, Water/Trash)
  • Phone/Cable/Internet/Streaming Services
  • Other Living Expenses (HOA, lawn care)


  • Auto Loan Payment
  • Gas/Maintenance
  • Insurance
  • Parking/Commuter Costs
  • Vehicle Registration Renewal
  • Other (tolls, ridesharing)


  • Food (Grocery, restaurant)
  • Clothing
  • Entertainment/Recreation
  • Dental/Medical
  • Health Insurance
  • Subscriptions & Personal maintenance (gym, nails, hair, etc)
  • Vacation
  • Gifts (Holidays, Birthdays, Special Occasions)
  • Other (childcare, student loans)

Organize savings by the following categories:

  • Savings Account
  • Emergency Savings Account
  • IRA/401k/Retirement
  • Other

2. Categorize Your Fixed and Variable Income & Expenses

Fixed Income and Expenses stay the same each month – items like monthly rent/mortgage, car payment, insurance payment, and paycheck.

Variable Income and Expenses will change from month to month. Think side jobs, tips, groceries, clothing, gas, utilities and sporadic expenses such as an annual car registration fee and semi-annual or quarterly expenses for tuition or other bills. Also remember holidays, vacation, and gifts.

3. Total Your Monthly Income & Expenses

Dowload this interactive spreadsheet, total your monthly income and expenses. If your income is higher than your expenses, that's great news! Take this extra money and put it towards your savings goals or paying off debt.

If your expenses are more than your income, you are overspending and need to adjust. How much adjustment varies based on how much you are overspending. For smaller overages, take a look at your variable expenses (these are the ones that change every month, tend to be more flexible, and considered 'fun money'), and see where you can reduce your spending. Unsubscribe to any tempting emails (now is not the time to know when your favorite retailer is having a sale), review your cell phone plan and check out competitor deals, shop for cheaper internet services, take a look at your streaming services, and any subscriptions or memberships you have.

To help figure out where to cut your expenses, ask yourself:

  • When was the last time I used this service?
  • Is the cost of this service worth what I'm paying for or can I find a cheaper alternative?
  • Is this something I can live without entirely or at least temporarily as I work towards my budgeting goals?

If your expenses are much higher than your income, you will also need to reduce your fixed expenses and/or find ways to increase your income. Resources like credit counselors can help analyze your income, assets, and debt, and come up with a plan to address your financial issues.

The goal is the have your income and expenses column equal zero, with all of your income budgeted towards specific expenses and savings goals.

4. Consider Your Budgeting Method

Once you are in a place where your income is more than your expenses, you might want additional guidance on how best to allocate your savings. There are several options to help you determine how to budget money.

80/20 Method

One simple budgeting method is the 80/20 rule, which focuses on saving 20% of your income and using the other 80% for expenses. That budget can be modified to 70/30 or another formula if you want to save more. A downside of this money management system, though, is that you don't distinguish between wants and needs with your spending.

60/20/20 Method

In areas with a high cost of living like Hawaii, you may want to consider a 60/20/20 method where 60% of income is spent on 'needs,' such as housing, insurance, groceries, and utilities, 20% towards 'wants,' including shopping, hobbies and dining out, and 20% towards savings and paying off debt.

This is a variation of the more popular 50/30/20 method, but takes into consideration the price of living in paradise (higher food, housing, and other living expenses) .

28/36 Rule

Mortgage lenders, and financial planners, use the 28/36 formula to evaluate the financial health of borrowers. They want to see borrowers spend a maximum of 28% of their gross income on housing costs and a maximum of 36% on all minimum monthly payments. This calculator can quickly tell you where you currently stand.

Cash Flow Method

While the long-term goal is to have enough money in the bank to easily pay your bills and have a cushion to cover extras, when you're tight on funds you may want to try the cash flow approach. Cash flow refers to the money you have coming into your bank accounts and the money going out. The goal is to have the cash you need at the right time to pay your bills on time.

Most people on a regular payroll get paid twice per month, but sometimes the dates of your paychecks don't align with the due dates of your bills. For example, if you earn $3,000 per month and your expenses total $2,400, you should have enough to cover your bills each month. But if all your bills are due the first week of every month, you may not have the cash at the right time.

If you use the cash flow budgeting method, you can make a list of your due dates and allocate money throughout the month so the money is available when you need it. In the scenario above, you would set aside as much as needed from your second paycheck, such as $1,200, to supplement your next paycheck to cover your bills in the beginning of the next month. You can also contact your creditors to ask for a change of your due date if that helps your cash flow. Eventually, you may be able to build up enough savings to cover your bills and then replenish your savings with your second paycheck.

There is no right or wrong method. Whichever you choose for your money management just needs to suit your individual circumstances and be simple for you to follow.

Budgeting tools

If you're looking for additional budget help, both Excel and Google sheets provide budget templates. Budgeting software such as and can also be useful if you want to link your accounts and automate your budget systems.

Now that you've learned how to make a budget, read more for Tips on How to (Actually) Stick to Your Budget.

Legal Disclaimer - Reference or mention herein of any business or organization does not constitute nor imply endorsement, recommendation or promotion by or of Bank of Hawaii.

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