1) Gather the Data related to your monthly cash inflows and outflows. For examples, how much do you take home in your paychecks each month (4000). What other sources of income do you have? What expenses do you have-rent (821), Utilities (32) Gas (60) (insurance (125) Groceries (200) entertainment (100) car (380) cell phone (10)
2)Creat a new workbook for the sample financial data. Use the first worksheet as a documentation sheet that includes your name, and date on which you start creating the workbook, and a brief description of the workbooks presuppose.
3) Plan the structure of the second worksheet, which will contain the budget. Include a section to enter values that remain consistent from month to month, such as monthly income and expenses. AS you develop the budget worksheet, reference these cells in formulas that require those values. Later you can update any of these values to see the changes immediately rel feted throughout the budget.
4) In the budget worksheet, enter realistic monthly earnings for each month of the year. Use formulas to calculate the total earnings each month, average monthly earnings, and the total earnings for the entire year.
5) In the budget worksheet, enter realistic personal expenses for each month. Divide the expenses into at least three categories, providing subtotals for each category and grand total of all the monthly expense. Calculate the average monthly expense and total expense for the year.
6) Calculate the monthly net cash flow (the value of total income minus total expenses)
7) Use the cash flow values to track the savings throughout the year. Use realistic amount for savings at the beginning of the year. Use the monthly net has flow values to add or subtract from the value. Project the end-of-war balance in the savings account under your proposed budget.
8). Format the worksheets contents using appropriate text and number formats. Add colors and border to make the content easier to read and interpret. Use cell styles and themes to provide your worksheet with a uniform appearance.
9) Use conditional formatting to automatically highlight negative net cash flow months.
10) insert a pie charge that compares the monthly expense for the categories.
11) Insert a column chart that charts all of the monthly expenses regardless of the category.
12)Insert a line charge or sparkling that shows the change in the savings balance throughout the 12 months of the year.
13) Insert new rows t the top of the worksheet and enter titles that describe the worksheet’s contents
14) Examine your assumptions. How likely are certain events to occur? Perform several what-if analyses on your budget. providing the impact of (a) deducting income with expenses remaining constant, (b) increasing expenses with income remaining constant, (c) deducting income and expenses, and (d) increasing income and expenses. Discuss the different scenarios you explored. How much cushion does your project income give you if expenses increase? what are some thinks you can do in your budget to accommodate this scenario.
15)Thinking of a major purchase you might want to make- for example, a car or a house. Determine the amount of the purchase and the current annual interest rate charged by your local bank. Provide a reasonable length of time to repay the loan, such as five years for a car loan or 20 to 30 years for a home loan. Use the PMT function to determine how much you would have to spend each month on payments for your purchased. You can do calculations on separate worksheet.
16) Add the loan information to your monthly budget and evaluate the purchase of this item on your budget. Is it affordable Examine other possible loans you might purse and evaluate their impact on your budget. Come up with the most realistic way of paying off the loan while still maintain a reasonable monthly cash flow and a cushion against unexpected expenses. If the payment exceeds your budget, reduce the estimated price of the items you’re thinking of purchasing until you determine the money payment you can afford under the conditions of the loan.
17. after settling on a budget and the terms of a loan that can afford, develop an action plan for putting your budget into place. What are some potential pitfalls that will prohibit you from the following through on your proposed budget? How can you increase the likelihood that you will follow the budget? be specific, and write down a list of goals and benchmarks that you’ll use to monitor your progress in the following your finical plan.