Money spent on school and property taxes (this example of the personal budget assumes that we own property). Money spent on homeowner’s or automobile insurance Money spent on clothes, shoes, and accessories Money spent on groceries, toiletries, and related items Money spent on electricity, heat, and water and on cable, phone, and Internet access Table 2.1 Spend Category Definitions Category Therefore, it is important to review the definitions in Table 2.1 "Spend Category Definitions" to understand how we are defining these categories before proceeding. It is likely that every person could have different categories or define the same categories differently. When you develop a personal budget, these categories are defined on the basis of how you spend your money. Table 2.1 "Spend Category Definitions" provides definitions for each of the spend categories listed in the range A3:A11. To complete this worksheet, we will add several formulas and functions. To demonstrate the construction of a basic formula, we will begin working on the Budget Detail worksheet in the Personal Budget workbook, which is shown in Figure 2.2 "Budget Detail Worksheet". This is what gives Excel the ability to create a variety of what-if scenarios, which will be explained later in the chapter.
As a result, when the numbers in the cell references are changed, Excel automatically produces a new output. This means that Excel uses, or references, the number entered into the cell location when calculating a mathematical output. When a cell reference is used by itself in a cell location (cell address preceded by an equal sign ), Excel displays the value entered into that cell location. When the values are changed in a cell referenced by a formula, Excel automatically produces new outputs. Excel references the values entered into the cell locations used in formulas to produce outputs. Furthermore, when constructing a formula in Excel, you use cell locations that, when added to a formula, become cell references Cell addresses used in formulas.
are used to calculate a variety of mathematical outputs in Excel and can be used to create virtually any custom calculation required for your objective. As a result, the Budget Summary worksheet serves as an overview of the data that was entered and calculated in the other three worksheets of the workbook.įormulas Used to calculate a variety of mathematical outputs in Excel and can be used to create virtually any custom calculation required for your objective. The first worksheet, Budget Summary, contains formulas that utilize or reference the data in the other three worksheets. Notice that this workbook contains four worksheets. Excel can make managing your money a fun and rewarding exercise.įigure 2.1 "Completed Personal Cash Budget Workbook" shows the completed workbook that will be demonstrated in this chapter. Whether you are managing your expenses during college or maintaining the finances of a family of four, a personal budget can be a vital tool when making financial decisions. Organizing and maintaining a personal budget is a skill you can practice at any point in your life. Most financial advisors recommend that all households construct and maintain a personal budget to achieve and maintain strong financial health. The objective used for this chapter is the construction of a personal cash budget. This section reviews the fundamental skills for entering formulas into an Excel worksheet.
These skills will be demonstrated in the context of a personal cash budget, which is a vital tool for managing your money for long-term financial security. This chapter also shows how you can use data from multiple worksheets to construct formulas and functions. The last section of the chapter addresses functions used to calculate mortgage and lease payments as well as the valuation of investments. The second section reviews statistical functions, such as SUM, AVERAGE, MIN, and MAX, which can be applied to a range of cells. The chapter begins with the construction of formulas for basic and complex mathematical computations. This chapter reviews several mathematical outputs that you can produce in Excel through the construction of formulas and functions. Perhaps the most valuable feature of Excel is its ability to produce mathematical outputs using the data in a workbook.
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