If obtaining help with debt is among your primary plans for the year then, you should consider using your tax refund to pay back your current debt responsibilities. Still, to enhance the use of such resources, we suggest you create financial budget on an Excel spreadsheet. After all, this will aid you come up with an excellent strategy on how you should manage the funds you've just received.
Now, to find out how you can do this, we suggest you pay close attention to the steps we have enumerated and discussed below.
How to Develop a Budget Spreadsheet Step 1: Install Microsoft Excel on your computer. To enjoy the maximum benefits of this application, we suggest you download or purchase the latest home or professional versions of the software suites offered by Microsoft.
An excellent alternative to such program is the Open Office Calc. It functions just like Microsoft Excel; however, you can simply download free versions of this application from the website of OpenOffice.org.
Step 2: Create a spreadsheet. This will contain the details of your debt repayment plan as well as your budget for the succeeding months. Fill out the top-most row of the worksheet with the following headers: Date, Description, In, Out and Total. Then, save it as a master copy, which you can modify whenever the need arises.
You may also decide to come up with new worksheets. To do this, scroll down to the bottom of the page you're viewing, right click on your mouse, and select the "copy sheet" option to automatically copy the details found in your master copy to a new spreadsheet. Then, save it using an appropriate filename.
Step 3: Key-in the details of your personal budget plan. After creating spreadsheets, the next thing you should do is to input the information for the columns marked with Date, Description, In, Out, and Total.
In the "In" column, enter the income you've generated for the month, as well as the income tax refund you received at the beginning of the year. Then, list all your recurring bills and expenses in the "Out" column. Just see to it that each value begins with a "-", to indicate that each item must be deducted from your income. And don't forget to fill out the Date and Description columns with suitable information, so that you'll know when each entry went in and out of your pocket.
Step 4: Calculate your budget. In this step, you will be using the AutoSum function of the Excel spreadsheet. First, you need to determine the total values for the "In" and "Out" columns. To do this, simply select the box after the last entry for each column. Then, click the AutoSum button (the sigma symbol, ∑ on one of the tool bars). This function will allow you to choose the items that must be included in the computation. After obtaining the column totals for "In" and "Out", use the AutoSum function, once again, to determine how much disposable income (In minus Out) you have.
Step 5: Evaluate your budget. The final amount you will obtain, after performing the necessary computations, represent the total sum of cash you have left at the end of the month - that is, if you've adhered to the details of your budget. If you see a negative amount then, it's an indication that you're actually spending beyond your means. Moreover, you need to make adjustments on your spending habits or else you may soon find yourself knee-deep in debt.
On the other hand, if you discover that you have more than enough funds left after covering your expenses then, you may set them aside to gradually settle your credit card bills, loan payments, and other financial obligations. In time, your good payment habits will help you attain relief from all forms of debt.