Income minus spending, the number you actually care about
Last time we made five categories, one set for money coming in and one for money going out. If you did that, you have a sheet with income on it and spending on it. Today we put those two together so they can talk to each other.
Now, a budget with income in one spot and spending in another is not really a budget yet. It is two lists sitting side by side. The one number worth knowing, the number that tells you anything true, is income minus spending. That is all. The rest is decoration.
Setting up the math
You ought to have an income total somewhere, most likely from a SUM formula we built a couple of lessons back. And you ought to have a spending total made the same way, adding up your five categories.
Find an empty cell below both of them, or off to one side, wherever it sits best on your sheet. Type an equals sign, click your income total cell, type a minus sign, click your spending total cell, and press enter.
That is the whole formula. Something like =B10-B16, depending on where your totals ended up. If you are looking at it and wishing it were harder, it is not. This is one of those places where folks assume there must be a trick they missed. There is no trick. Subtraction is subtraction, whether you are taking away two numbers or two totals.
Put a label in the cell beside it. Call it "Left over" or "Difference," or whatever word you will still recognize three weeks from now when you open this file again. The you of the future will not remember what B17 stands for. The me of the past did not remember either, more times than I care to admit.
Reading the number
If the number is positive, you brought in more than you spent that month. If it is negative, you spent more than came in. I know that reads as almost insultingly plain written out this way, but I have watched people build a whole colorful budget and then stare at a negative number as if it were a foreign language. It is not. It is only telling you what happened.
The first time I built this for my own house, I expected some grand revelation. There was none. It only confirmed what I already halfway knew, that daycare and diapers eat more than I like to look at straight on. But that is the sheet doing its work. A dull confirmation is still information. You did not need a chart with five colors to tell you December is expensive. You needed one number that was honest.
A little formatting, so it reads at a glance
Once the formula is in, set that cell so negative numbers show up in red. In most spreadsheet programs you do this through the number formatting menu; there is usually a ready-made choice for negative numbers in red, or you can build your own. I like it because you do not have to read carefully to know you are in trouble. Red catches your eye before your mind even sorts the digits, and on a tired Tuesday night that is exactly the sort of help you want.
A short story, since we are on the subject of what lives in your cells
I mention this because it is a good reminder that your sheet is allowed a little personality, and it will not break a thing. A while back my daughter Lilly, she is four, climbed into my lap while I was working on the family budget. She grabbed the mouse, clicked into a cell, and typed a good long line of "kkkkkkkk" right in it. Cell B12, very sure of herself, as though she had solved something.
I left it. A whole day, in fact, because every time I opened that file and saw "kkkkkkkk" sitting next to my grocery total, it made me smile. In the end I deleted it because I needed the cell back for real numbers. But I want you to know that a stray typo, or an odd entry from a child, or a slip of the mouse will not hurt your formula unless it lands inside a cell your formula is pointing at. Formulas are more forgiving than folks think. They only mind the exact cells you told them to mind.
If the number surprises you
Every so often a person runs this formula for the first time and the number is far worse than expected. If that is you, do not panic, and do not run off and build five new categories to explain it. Sit with the one number first. It is telling you something true, even if it is not what you hoped to hear, and the next few lessons are about digging into which category is doing the damage. One step at a time.
Before next time
Get your income-minus-spending formula built and formatted, then simply look at last month's real number, whatever it comes to. Do not fix anything yet. Just see it.
- C