Google Sheets is the best free budgeting tool most people already have. It runs in a browser, saves automatically, syncs to your phone, and costs nothing — and unlike a budgeting app, it does exactly what you tell it to, which is the whole point of a budget.
This guide builds a working monthly budget from a blank sheet: the tabs to create, the categories to use, and the three formulas (SUM, a planned-minus-actual difference, and a running total) that turn a list of numbers into a budget that does its own math. No spreadsheet experience needed — if you can type in a cell, you can build this.
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Set up the sheet: three tabs, not one
Open sheets.new (that URL creates a fresh spreadsheet) and make three tabs along the bottom: "Budget" (your plan and actuals), "Transactions" (a running log of what you actually spent), and "Setup" (your category list and monthly income). Splitting them keeps the budget tab clean — you plan on one tab and record reality on another.
On the Budget tab, build four columns: Category (A), Planned (B), Actual (C), and Difference (D). Row 1 is your headers; categories start in row 2. That four-column layout is the entire skeleton — everything else hangs off it.
Build categories from your last 30 days
Do not start from a generic template list. Open last month's bank and card statements and group real transactions — those clusters are your true categories. Most households land on 12 to 20. Type them down column A in plain language: Rent, Groceries, Fuel, Eating Out, Phone, Subscriptions, and so on.
- Fixed bills first: rent/mortgage, utilities, insurance, phone, subscriptions
- Variable spending: groceries, fuel, eating out, household, personal
- Goals: emergency fund, debt payment, sinking funds (car, gifts, annual bills)
- Add a "Buffer" or "Misc" row at the bottom — a real budget needs a little slack
The first formula: SUM your totals
Under your last category, add a "TOTAL" row. In the Planned column total cell, type =SUM(B2:B20) (adjust the range to cover your actual rows). Copy that cell across to the Actual column so it becomes =SUM(C2:C20). Now the bottom of your budget always shows planned vs. actual spending without you ever adding numbers by hand.
A practical tip: leave a couple of blank rows inside the SUM range so new categories you add later are captured automatically — =SUM(B2:B25) keeps working as the budget grows.
The formula that makes it a budget: Planned minus Actual
In the Difference column (D2), type =B2-C2 and press Enter, then drag the small blue square at the corner of the cell down the whole column to copy it. Now every category shows what is left: a positive number means money to spare, a negative number means you overspent that category.
To make overspending jump out, select column D, open Format → Conditional formatting, and add a rule: "Less than 0" → fill red. The day a category turns red is the day the budget told you something useful — move money from a category with room, and keep going. A budget is a plan you adjust, not a contract you fail.
Connect it to reality with a running total
On the Transactions tab, log spending in three columns as it happens: Date, Category, Amount. To see how much you have spent in a single category without filtering anything, use SUMIF on the Budget tab. For your Groceries Actual cell: =SUMIF(Transactions!B:B, "Groceries", Transactions!C:C) adds up every transaction tagged "Groceries". Repeat per category and your Actual column fills itself from the log.
If SUMIF feels like a lot on day one, skip it — just type each category's total into the Actual column once a week. The manual version still works; the formula version just saves the typing once you are comfortable.
Why a spreadsheet beats an app for this
Apps auto-categorise, which keeps you passive — the numbers update without you ever looking. The ten minutes a week you spend in a sheet, manually checking categories against the plan, is the mechanism: that small friction is what actually changes spending. A sheet also never locks your data behind a subscription or a login you forget.
If you would rather not build the formulas yourself, a pre-built budget spreadsheet gives you the same structure — dropdowns, formulas and a summary dashboard already wired up — so you start using it the day you open it instead of debugging cell ranges.
Skip the setup work
Everything in this guide works with paper and a pencil. If you want the structure ready-made — designed, tested and printable in minutes — the matching templates are below.
Frequently asked questions
Is Google Sheets really free for budgeting?
Yes — completely. You need a free Google account; the spreadsheet, mobile app and cloud backup cost nothing, with no upgrade prompts. The only "cost" is the few minutes a week you spend keeping it current.
What is the difference between SUM and SUMIF?
SUM adds every number in a range (=SUM(B2:B20) totals a column). SUMIF adds only the numbers that match a condition (=SUMIF(range, "Groceries", amounts) totals just your grocery transactions). Use SUM for column totals and SUMIF to pull a single category's spending from a transaction log.
Can I use the same sheet every month?
Right-click the Budget tab, choose "Duplicate", and rename the copy to the new month (e.g. "July"). Your categories and formulas carry over; you just reset the Actual column to zero. Keeping each month as its own tab also gives you a year of history to look back on.
Will this work on my phone?
Yes. Install the free Google Sheets app and the same spreadsheet syncs instantly. Logging a purchase in the Transactions tab right after you make it — at the register — is the single best habit for keeping the budget accurate.
Do I need Excel instead?
No. The formulas here (SUM, SUMIF, conditional formatting) are identical in Excel, so the same build works in either. Google Sheets just has the edge for budgeting because the free cloud sync and phone access come with no licence.
How is this different from a budgeting app?
An app decides the categories and updates silently; a sheet makes you do the assigning, which is where the awareness comes from. A spreadsheet is also fully yours — no subscription, no data lock-in, and you can reshape it to your exact situation.
About this guide. Published by OmniAura Digital, the team behind the printables and templates in our library. Our guides describe methods you can use with paper and a pencil; where we mention templates, they are our own products. Spotted an error? Tell us at support@omniauradigital.com and we'll fix it.
Educational only — not financial advice. Adjust any system to your own situation.