Earlier in my budgeting endeavor, I had a problem determining how much money I needed to save each month in order to meet my goals. Instead, I would deposit as much money in my savings account as I could, and hope that I would have enough when it came time to spend money for my goal. After several missed and delayed goals, I realized that this system was terribly ineffective.
So I crafted an Excel spreadsheet to solve this problem, which I’d like to share with you – an Excel spreadsheet which will automatically tell you how much you need to save each month, and how close you are to your goals.
To use it, first enter in the amount in your savings accounts and CDs. Then specify the amount that you’d like to be set aside for emergencies. Then for each goal, enter a name, deadline, and total amount needed. The spreadsheet will then break down the amount needed per month to reach a goal’s deadline, as well as the total amount you need to save to meet all your goals. Each time you save or spend an amount toward your goal, you can enter it into the spreadsheet and categorize it as “Paid” or Saved” and the spreadsheet will automatically update the amounts needed.
I tested the spreadsheet out under a number of conditions. In this example, I have five goals set up: a new flatscreen TV, trip to Hawaii, Roth IRA, snowboarding, and a Ferrari. For the flatscreen TV, I want to save $100 a month for a $1200 flatscreen in time for Christmas, which it accurately calculates. For my Roth IRA deposits, I’m depositing the $5000 maximum this year every month (in order to practice dollar cost averaging – more on that later). I’ve also added an ambitious goal of saving up for a Ferrari for my anticipated midlife crisis – in order to meet this goal, I need a little over $2000 a month!
I’ve included a version for Excel 2007 and another for older versions of Excel. Download it and have fun playing around!