For a growing number of Americans, turning 65 no longer automatically means retirement. Between 2015 and 2024, the number of Americans 65 and older who worked increased by more than 33%, according to a 2025 CNBC analysis of Bureau of Labor Statistics (BLS) data.
If you want to keep up the 9 to 5 into your golden years, there’s a wide range of options for you to explore. This is especially true if you’re a skilled senior interested in full-time employment.
Tips When Finding a Job as a Senior
There are pros and cons and working after retirement. If returning to the daily grind is right for you and your financial situation, then there are a few things you’ll want to keep top of mind:
• Weigh the pros and cons of working for a company versus freelancing or consulting.
• Think about whether you’d prefer to work from home or go into an office or to a job site.
• Read the job listing carefully, paying close attention to the requirements listed.
• Remove graduation dates from your resume unless they’re fairly recent.
• Include a couple of your key accomplishments in a cover letter.
• During an interview, be sure to strategically share key career highlights from the past 10 to 15 years, and spotlight the ways in which you’ve kept your skills up to date.
• Move ahead with confidence!
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12 Jobs for Skilled Seniors That Pay Well
Working can help provide seniors with extra income as well as other benefits, such as connecting with coworkers and creating a sense of purpose. Let’s take a closer look at jobs for skilled seniors that suit a variety of skills and interests.
#1: Teacher
If you have the appropriate credentials, teaching can be a rewarding job. Don’t fret if you don’t have the right credentials — you might still be able to land a position. Many high schools, career centers, and community colleges may be open to hiring experienced people to teach general interest or professional development courses. Educational organizations may also be seeking teaching assistants or tutors, both of which can be excellent jobs for skilled seniors.
#2: Pet Groomer
Have a way with four-legged friends? Consider a career as a pet groomer, where the average worker earns around $31,830 a year. You can find work in a number of settings, including grooming salons, veterinary clinics, pet stores, zoos, and animal shelters. Or, you may decide to strike out on your own. The field is experiencing a boom right now. There are more than 422,000 jobs today, according to the BLS, and the field is expected to grow by 15% between 2023 and 2023.
#3: Tax Preparer
Interested in becoming a tax preparer? If you have an accounting background, then this type of work may be a natural fit. That said, you don’t need to be a certified accountant — you just need to obtain a Preparer Tax Identification Number from the IRS and pass a competency exam.
#4: Real Estate Agent
You can earn a good income helping people buy and/or sell their home or property. But there’s another selling point to being a real estate agent: the ability to set your own schedule, as long as you can still satisfy your clients. In fact, this flexibility can be useful if you’re deciding whether you want to work part time or full time. Before you start working, you’ll need to get a license, and requirements vary by state.
#5: Bank Teller
You typically only need a high school diploma or the equivalent to qualify for a bank teller’s job, and you may be required to undergo a short period of on-the-job training. In this position, you’d handle the standard transactions at the financial institution. So if you’re comfortable handling a steady flow of cash and enjoy working with customers, this could be a job to consider.
Need help managing your own finances? A money tracker can help you keep tabs on where your money is going.
#6: Medical Biller
A medical biller works for a healthcare organization such as a hospital or doctor’s office and is responsible for appropriately billing insurance companies, managing the status of claims, and addressing problems that arise. This is one of those jobs for skilled seniors that require organization and the ability to follow through — in this case, with both patients and the insurance companies.
Plenty of small businesses in the United States need help with daily administration tasks. Depending on your skills, virtual tasks could include making phone calls, managing emails, scheduling appointments, maintaining calendars, offering bookkeeping services, handling social media, and so forth. Although many virtual assistant jobs are part time, if you wanted more work, you could have multiple clients to whom you provide your services.
#8: Telework Nurse or Doctor
Telehealth services have greatly expanded since 2020, and demand for remote healthcare providers remains high. If you’re a recently retired nurse or doctor, and are still licensed, you may want to explore a telehealth position. It could allow you to continue providing care but from the comfort of home (or a home office).
#9: Counselor
More than half of all Americans live in an area with a shortage of mental health care professionals, according to data from the U.S. Department of Health and Human Resources. If you’re a retired counselor or therapist and are interested in working again, re-entering the field could allow you to provide much-needed services.
#10: HVAC Technicians
From installation to maintenance to repairs, HVAC pros can find themselves in great demand all year long. If you have this kind of experience, or are handy and able to incorporate HVAC into your skill sets, then this type of work can be a steady source of income.
Busy attorneys need plenty of help researching information, creating documentation, and contacting clients. If you have the education and experience — and you’re highly organized and able to multitask — then a paralegal job may be right for you.
#12: Grant Writer
Grant writing is a specialized type of writing where you’d write proposals to help nonprofits and other agencies to obtain funding for their programs. To succeed at grant writing, it’s important to research the requirements and deadlines of the funding, write compelling proposals to receive the grant dollars, follow up with the proposals, and write reports about them.
The Takeaway
Your golden years are what you make of them — and for some, that can mean re-entering the workforce or pursuing a new, rewarding career path. Fortunately, there are plenty of jobs for skilled seniors that suit different skills and interests and provide a source of extra income.
Take control of your finances with SoFi. With our financial insights and credit score monitoring tools, you can view all of your accounts in one convenient dashboard. From there, you can see your various balances, spending breakdowns, and credit score. Plus you can easily set up budgets and discover valuable financial insights — all at no cost.
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FAQ
Can seniors still work full time and receive Social Security benefits?
According to the Social Security Administration, the answer is “yes.” If you’ve already reached your full retirement age, then you can work and earn as much as possible without a reduction in benefits. If you aren’t yet at full retirement age, then you can earn up to $23,400 in 2025 without a reduction. For income earned beyond that annual limit, your benefits would be lowered by $1 for each $2 earned.
What types of job skills are in high demand?
Management and leadership skills are appreciated by many employees, and these are skills seniors may well have developed over the years. It’s important to be able to effectively communicate, both verbally and in writing, and to work well with others. For many jobs, sales and marketing abilities are key, while in others the ability to research and analyze are crucial. Note that these are general categories. Specific skills will depend upon the job you’re applying for.
What type of work-life balance should working seniors expect?
Maintaining a work-life balance is especially important for working seniors. As you consider re-entering the workforce, you’ll want to consider your physical and mental health as well as your finances, and ensure that whatever job you take on will fit in your lifestyle. As an older adult, you may discover that you don’t have quite as much stamina as you once did. On the other hand, having children out of the home and on their own may open up more time than you expected.
Photo credit: iStock/Vesnaandjic
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Non affiliation: SoFi isn’t affiliated with any of the companies highlighted in this article.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
A line item budget is a detailed look at your income and your expenses, and it can help you manage your money more effectively.
Like any type of budget, the purpose of a line item budget is to help you understand how much money you have flowing in and out every month. It also provides the guidelines and guardrails you may need to avoid overspending and hit your savings goals.
If you’re interested in taking a closer look at your money or are sick of running out of cash before the end of the month, this guide to line item budgeting can help.
Key Points
• A line item budget lists income and expenses, providing a simple, organized financial overview.
• Advantages of a line item budget include ease of management, clear financial tracking, and planning for the future.
• Drawbacks of a line item budget include rigidity and the detailed record-keeping required.
• Personal budget categories should reflect individual financial goals and circumstances.
• Income and expenses are tracked line by line, offering a clear view of financial flow.
What Is a Line Item Budget?
A line item budget is a detailed financial plan that lists your income and then breaks down expenses into categories, or “line items.” It allows you to organize your expenses by grouping related costs together on separate lines to create a comprehensive financial picture
A line item budget also enables you to anticipate costs within each expense category, then closely monitor your spending to ensure you stick to your budget and don’t overspend in any specific area.
What Is Considered a Line Item?
A line item is an income or expense category that is part of your budget. For example, if you’re setting up a personal line item budget, your income line items might include salary and a rental property, while your expense line items might include rent, car insurance, and a music subscription.
If you want to make sure you’re putting some money into your savings account each month, you can even include a savings transfer as a line item in your budget.
It may be helpful to know a bit about how these budgets can work in business, as background for creating your own line item budget. Say a business is creating a new advertising campaign. They might consider:
• Projected expenses: How much they think the cost of creating and executing their advertising materials will cost in the future.
• Previous actual expenses: This will show how much in the past their costs actually were for such endeavors.
• Present-year expenses: This would track the actual expenses being incurred as they create their ads. This could be done week by week or month by month.
Why Line Item Budgets Are Commonly Used
Line item budgets are commonly used because they allow you to account for everything that is flowing in and flowing out of your checking account. This makes it easy to monitor spending and compare actual costs with projected amounts and stay on top of your money.
Businesses, nonprofits, and governments tend to favor line item budgets because they allow an organization to easily identify areas where costs are exceeding expectations, track spending across different departments, and make informed decisions about where to allocate funds most effectively.
What Are the Advantages of Using a Line Item Budget?
If you are considering implementing a line item budget, consider these upsides.
Allocating Expenses Is Simple
One of the biggest pros of using this kind of budget is the ease with which they can be created. With just a few clicks on a spreadsheet, you can establish a basic structure and begin to fill in the data that needs to be recorded. And as priorities change, the budget can be changed just as easily to meet those new needs.
Interpreting the Budget Is Easy
Another major advantage of the line item approach: Making a budget this way isn’t only easy to do, it’s also easy to understand. Creating a basic list of categorized income and expenses doesn’t require any specialized accounting degree to decipher. With your phone’s calculator function, you’re good to go.
Planning Your Future Finances
It provides an easy-to-read, at-a-glance view of what to expect from your expenses in a week’s, month’s, or year’s time. And specific amounts are clearly displayed on each individual line. Those looking for budgeting for beginners tips may want to consider a line item budget for these two benefits. This kind of budget can help you avoid those surprise moments of not understanding why your checking account balance got so low.
Providing Clarity for Financial Decisions
Once a line item budget is in place, it can significantly simplify financial decision-making. Rather than wonder how much you can afford to spend on clothing or take-out, you’ll have a pre-decided spending limit. As long as you don’t exceed your targets, you can enjoy your expenditures without guilt — or running up debt.
What Are Some Downsides to Line Item Budgets?
Next, it’s worthwhile to recognize the possible drawbacks of line item budgets.
Best for Those With Predictable Income and Expenses
Line item budgeting usually relies on fixed and steady income and expenses for accuracy. It can work well for managing predictable finances, but if a budget contains line items that fluctuate significantly, it may not balance properly. This can lead to inaccurate calculations.
Typically Rigid
Another disadvantage of line item budgets is that they are rigid. It’s not uncommon to change spending habits throughout the year to fit changing needs, but those changes aren’t automatically reflected in a line item budget.
Spending adjustments may require extensive budget rewrites in order to accurately capture a new spending plan. With a line budget, any time financial goals change, it requires reviewing and adjusting everything line-by-line in order to stay current.
Requiring Detail
Unlike a budget such as the 50/30/20 rule, in which a person wrangles three big financial buckets (or spending categories), a line item budget does require rigorous accounting of specific expenses. This can be challenging for some people.
Budgeting: Is It Worth It?
Budgeting can seem tedious. After a long day (or week) at work, the last thing you may want to do is spend time in front of a screen, plugging in data and recording how much you’ve spent.
But tracking your money can be a powerful exercise. Here are some reasons why budgeting can be worthwhile:
• Tracking your spending can give you direct visibility into your habits and when you understand where your money is going, you can feel empowered to make adjustments.
• Budgeting can be part of a good money mindset. Instead of thinking of budgeting as a series of spending restrictions, you could think of it as a tool you can use. It’s a technique that can give you the freedom to spend money on what is most important to you.
• Setting money goals can provide a structure to help you build out your budget and plan for the future. So, whether you’re saving for retirement, planning a wedding, or jetting off on a trip overseas, having and sticking to a well-crafted budget can help you get there.
• It’s also worth noting that your budget is a living document. It’s okay to make changes. As you adjust your goals or experience or experience changes in your income or lifestyle, you can (and should) make adjustments and changes to fit your new needs. Your life isn’t stagnant, and your budget shouldn’t be either.
Using a Line Item Budget for Personal Finance
Typically, line item budgets are used by small businesses to track their earnings and expenses and compare them from year to year. While businesses typically have different needs than households, creating a line item budget can be helpful in personal finances, too.
Just as they give small businesses insight into opportunities to grow the business or reduce expenses, line item budgets can help individuals manage personal expenses. Outlining each source of income and expense can reveal personal spending habits and opportunities to reduce one’s cash outflow.
The specific insights you gather from a line item budget, as well as the changes you make, will ultimately depend on your personal goals and overall financial situation.
Deciding What to Include in a Line Item Budget
Deciding to create a line item budget is just the first step. Next, consider which categories are most important for you to include. A personal budget is just that — personal.
Everyone’s financial situation is different, so this list is not the end-all-be-all solution, but here are some high-level categories you may want to consider (each will likely include several sub-categories).
Bills and Utilities
This category is fairly self explanatory — after all, everyone’s got bills to pay, right? Things worth listing in this category might include water and electricity bills; cable, internet, or phone bills; or any other monthly bill you have on your expense list.
Debt
If you have student loan payments, credit card bills, or other recurring debt payments, include them in your budget. That’s an important area to track.
Education
If you are currently attending school or have kids, you’ll likely want to consider including things like tuition and fees, the cost of books and other supplies, and any other expenses directly related to education costs.
Entertainment
This one is a little broader and can be highly customized depending on personal spending habits. Do you have subscriptions to streaming services? Do you buy lots of books?
Tickets to the movies, museums, or a concert could also be included in this category. Depending on your hobbies and interests, you may find you can expand this with additional detail.
Fees
Think of all the fees charged to your accounts. Late fee on a delayed credit card payment? ATM fees? Add ՚em here. You could add HOA fees and others to this category as well. If you pay an annual fee to your credit card issuer, that goes here as well. (Seeing how fees add up can be a useful exercise. For instance, if you are paying several fees at a traditional bank, you might opt to switch to an online bank, which typically will charge lower or no fees.)
Food
Depending on your eating habits, you could split this up even further in a line item budget into categories like groceries, snacks, and dining out.
Home
Think of things like your rent or mortgage as well as expenses for maintenance and upkeep of your home.
Income
You’ll probably want to include all sources of income, not just your regular 9-to-5. If you’re budgeting as a couple, you can include income for both partners.
Add your contributions to all investment accounts including a 401(k), IRA, 529 accounts, or other brokerage accounts.
Medical
Expenses for medications, health, dental, or vision insurance, and copays can all be included under this category.
Personal Care
Things like toiletries, vitamins, and beauty supplies would fit into this category. Hair cuts, trips to the nail salon, and massages could be included as well. If desired, you could also include the cost of other self-care practices, like a subscription to a meditation app, gym membership, or exercise classes.
Savings
Money that you put into an emergency fund, vacation fund, or other form of savings should be accounted for in your line item budget, too.
Do you pay for any regular services? You could include things like dry cleaning services, the cost of having a housekeeper, or the fee you pay your babysitter for a night out.
Shopping
Heading to the mall? Shopping expenses like clothing, toys, and even gifts for others, could be added here.
Taxes
If you’re a full-time employee, taxes are automatically being taken out of your paycheck. But if you are a freelancer or independent contractor, note quarterly taxes in your line item budget.
Transportation and Auto
This is a catch-all category for things like your monthly metro pass, gas, car insurance, auto loan payment, and general maintenance of your vehicle (if you own one).
Travel
Add all costs associated with trips you take here. Things like hotels or lodging, air travel, taxis, travel insurance, and tickets and admission for excursions and seeing the sights.
If you’re road-tripping, you could include the cost of gas, tolls, and other car-related expenses for the trip here too. Also worth including is the cost of food while on the road.
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Putting Your Line-Item Budget Together
A list this long can seem overwhelming. Take it one step at a time, and, if needed, break the work up over a few days. For instance:
• On day one, gather all of the relevant documents (tax returns, paychecks, credit card statements, etc.), and create the skeleton of your line item budget.
• On day two, you could aim to make it through recording your income and maybe half of your expenses.
• On day three, you could finish adding data about your expenses and add any finishing touches or edits.
After creating this line item budget, you should have a bird’s-eye view of your spending habits. Take a close look at the information, and decide if you are happy with what you see. Now is the time to be honest with yourself and make the changes you feel are necessary. Do you want more money to put towards savings or paying down debt? See how you might alter the numbers as they currently exist for the months ahead.
Want to make cuts to your monthly expenses? Now you know exactly how much money is being spent in each category and where you could stand to hold back. Some ideas to mull over:
• Can you negotiate less expensive car insurance? Experiment with meal planning to see if you can be intentional about your food spending and potentially cut your grocery bill.
• Try adjusting the thermostat setting while you’re asleep or away from your home to cut your energy bill.
• Getting hit with fees on late payments? You might want to add an alert to your calendar or a monthly notification to your phone to remind you when payments are due. Another possible option is to enroll in autopay so you never miss a payment.
Payment history accounts for 35% of your credit score. So making payments on-time consistently could not only eliminate those pesky late fees from your budget but it could also potentially have a positive impact on your credit profile over time.
To make sure you stay consistent with your line item budget, it’s helpful to choose a specific day each month (ideally at the end) to review your expenses. This is when you gather your statements and receipts and log in actual spending and income numbers for each line item.
You can then compare your actual spending to your planned spending, identify areas of overspending, and make any needed adjustments to your budget for the following month to ensure you’re on track with your financial goals.
It’s also helpful to automate your finances wherever possible. Consider setting up auto pay for regular expenses, as well as a monthly transfer from your checking account to a high-yield savings account for emergencies and other short-term savings goals.
Line Item Budget Example
A line item budget example can be as simple as using an Excel or Google Sheets spreadsheet to make your own basic line item budget template.
At the top rows, income can be added, say, for a given month. Then, moving down the page, you can list out the various expenses you have. To the right of that, you might include “projected” and “actual.” If certain line items tend to always come in over budget, you may need to adjust your budget — or your spending habits.
You can customize the organization to best suit your needs.
Line Item Budget Templates
There are many free resources online that can help you set up your budget. For example, Google Sheets offers free pre-made budget templates, such as an annual budget and a monthly budget, that you can customize to your needs.
Excel also offers free pre-made templates for budgeting that includes line items for different income streams and household expenses, with the ability to add or subtract categories to make it fit your financial situation.
Alternatives to a Line Item Budget
Though simple and intuitive in nature, line item budgets aren’t a perfect fit for everyone. Here’s a look at some other budgeting options you might consider.
50/30/20 Budget
Also known as a proportional budget, the 50/30/20 budget rule focuses on splitting income into three buckets — “needs,” “wants,” and “goals” (savings and debt repayment). Instead of creating lists of expenditures, you instead commit to spending 50% of your income on things you need to spend on (housing, food, debt, and similar “musts”), 30% on things you want (dining out, travel, and so forth), and the remaining 20% is set aside for savings and debt payments beyond the minimum.
Because spending isn’t tracked on a granular level, you might use a budgeting or expense-tracking app to help avoid overspending in any one category. You can use an online 50/30/20 budget calculator to see the breakdown of your money.
Envelope Budgeting Method
The envelope method focuses on using physical envelopes and labeling each with a spending category, such as food, bills, or entertainment. The envelopes are then filled with the maximum amount of money desired to be spent in each category, and spending throughout the month happens directly from those envelopes.
Once an envelope is empty, no more spending can be done in that category, unless taken from another. This method can be adapted to use a debit card vs. cash.
Zero-Based Budget
Similar to the line item budget, the zero-based budget takes account of all income and expenses. The difference is that with this budget, the goal is to make sure that every incoming dollar is allocated to either a saving or a spending purpose, and to leave nothing left over. Automating finances with services like automatic bill-pay and prescheduled bank transfers (say, into a high-yield savings account) can help with managing this style of budgeting.
The Takeaway
Creating a line item budget can be useful when determining your spending habits. It’s a fairly simple, detailed, and well-organized way to track your earnings and spending, but it’s not always flexible. Also, if you don’t have your budget spreadsheet on hand, it could be more difficult to make changes or check in while you’re busy living.
There are many different types of budgets and as well as apps and expense trackers that can simplify money management. A good place to start your journey is seeing what tools your bank offers.
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FAQ
What is an example of a line item budget?
A line item budget is a simple, organized way of listing income and spending in detail so you can keep things in balance and see how you are tracking over time. It can be easily made with a basic spreadsheet template, listing your income, your spending, and your savings in a given time frame, such as one month.
What is the difference between a line item budget and a program budget?
Line item budgets and program budgets are frequently used in business. Typically, a line item budget will list out individual budget expenses, item by item. In a program budget, however, the spending tends to be grouped into smaller budgets for specific activities or programs. For instance, in a program budget, all the costs related to advertising a new service could be kept together, to show the expenses required to meet that goal.
How do I create a line item budget in Excel?
One simple way to make a line item budget in Excel is to create vertical columns for each month. Starting at the top of each month, you could list various sources of income. Then below that, you could break out, line by line, all of your expenses, such as food, housing, utilities, entertainment, clothing, dining out, travel, transportation, and so on, going down the page. This can allow you to tally your earning, spending, and saving.
What tools can help manage a line item budget?
There are a number of online tools and apps that can help you set up and stick with a line item budget. For example, you might start by using spreadsheet software like Microsoft Excel or Google Sheets to set up your budget, either from scratch or using one of their free line item budget templates. To help stay on track, consider downloading a budgeting app to your phone (your bank may offer a free one) that can link to your outside accounts and help you monitor and categorize your spending.
What are the most common mistakes when using a line item budget?
One of the most common mistakes when using a line item budget is failing to update it regularly. Once you set up your expense categories and spending targets, it’s important to enter your actual expenses to see if you’re staying on track with your budget.
Other common errors with line item budgeting include: underestimating expenses, setting unrealistic spending limits, and ignoring small but recurring expenses.
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SoFi Bank reserves the right to grant a grace period to account holders following a change in Eligible Direct Deposit activity or Qualifying Deposits activity before adjusting rates. If SoFi Bank grants you a grace period, the dates for such grace period will be reflected on the APY Details page of your account. If SoFi Bank determines that you did not have Eligible Direct Deposit activity or $5,000 in Qualifying Deposits during the current 30-day Evaluation Period and, if applicable, the grace period, then you will begin earning the rates earned by account holders without either Eligible Direct Deposit or Qualifying Deposits until SoFi Bank recognizes Eligible Direct Deposit activity or receives $5,000 in Qualifying Deposits in a subsequent 30-Day Evaluation Period. For the avoidance of doubt, an account holder with both Eligible Direct Deposit activity and Qualifying Deposits will earn the rates earned by account holders with Eligible Direct Deposit.
Separately, SoFi members who enroll in SoFi Plus by paying the SoFi Plus Subscription Fee every 30 days can also earn 3.80% APY on savings balances (including Vaults) and 0.50% APY on checking balances. For additional details, see the SoFi Plus Terms and Conditions at https://www.sofi.com/terms-of-use/#plus.
Members without either Eligible Direct Deposit activity or Qualifying Deposits, as determined by SoFi Bank, during a 30-Day Evaluation Period and, if applicable, the grace period, or who do not enroll in SoFi Plus by paying the SoFi Plus Subscription Fee every 30 days, will earn 1.00% APY on savings balances (including Vaults) and 0.50% APY on checking balances.
Interest rates are variable and subject to change at any time. These rates are current as of 1/24/25. There is no minimum balance requirement. Additional information can be found at http://www.sofi.com/legal/banking-rate-sheet.
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We do not charge any account, service or maintenance fees for SoFi Checking and Savings. We do charge a transaction fee to process each outgoing wire transfer. SoFi does not charge a fee for incoming wire transfers, however the sending bank may charge a fee. Our fee policy is subject to change at any time. See the SoFi Checking & Savings Fee Sheet for details at sofi.com/legal/banking-fees/. Third Party Trademarks: Certified Financial Planner Board of Standards Inc. (CFP Board) owns the certification marks CFP®, CERTIFIED FINANCIAL PLANNER®, CFP® (with plaque design), and CFP® (with flame design) in the U.S., which it awards to individuals who successfully complete CFP Board's initial and ongoing certification requirements.
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• Start by looking at past financial statements to understand your average monthly income and fixed monthly costs.
• Categorize expenses into needs, wants, and savings for better financial management.
• Use apps or spreadsheets to track and categorize expenses efficiently.
• Automate payments and savings to build consistent financial habits.
• Review spending monthly to ensure you’re sticking to your budget and working towards long-term goals.
Many people aren’t quite sure where their cash goes. They know they have money flowing in and out but couldn’t tell you the details. If you’re among that group, it can be a good thing to start tracking your monthly expenses.
Why bother? Once you know where your money is going, you can decide if this is actually where you want your money to go. You may find places where you’re wasting money and decide to rejigger your spending so you can put more money towards your goals, whether that’s paying down debt, going on vacation, or being able to retire one day.
If you’re ready to learn how to keep track of expenses, these tips can help.
Check out our Money Management Guide.
This article is from SoFi’s guide on how to manage your money, where you can learn basic money management tips and strategies.
6 Ways to Track Your Monthly Expenses
Getting a handle on your spending is easier than you think. Here’s how.
1. Understanding Your Income and Fixed Costs
To determine how much money is flowing into your checking account each month and exactly where that money is going, you’ll need to gather the last six months’ worth of financial statements.
Use these statements to determine your average monthly income (after taxes are taken out), as well as make a list of your regular, or fixed, expenses (such as rent or mortgage, utilities, and car payments). Next, list out your variable expenses — those change from month to month, such as groceries, gas, and entertainment. This is an area where you might find opportunities to cut back.
2. Categorize Spending and Expenses
Once you have an idea of where your money is currently going, you’ll want to put your expenses into categories. This could be a long detailed list. Or, you might simply divide your expenses into three main buckets: Essential spending (“needs”), nonessential spending (“wants”), and saving and paying down debt (“goals”). This approach is known as the 50/30/20 budget.
Needs
Needs include anything that you have to spend money on to maintain a basic standard of living. Using the 50/30/20 budget, 50% of your budget would go to needs.
Examples of needs include:
• Housing
• Utilities
• Food
• Healthcare
• Insurance
This category can include a mix of fixed and variable expenses. For example, your rent or mortgage payment is likely fixed since you pay the same amount all the time. But your utility bills can be variable if you pay more in winter and summer, but less in spring and fall.
One rule of thumb for housing is to spend no more than 30% of your gross (pre-tax) income on rent. This may not be feasible if you live in a metro area with high housing costs. But if you find housing is taking too big a bite out of your budget, you might consider taking on a roommate or moving to a cheaper area of town.
Wants
Wants are things you spend money on but don’t necessarily need to survive. This section accounts for 30% of spending under the 50/30/20 rule.
Examples of wants in a line-item budget can include:
• New clothes that aren’t really needed
• Travel
• Dining out
• Hobbies and recreation
• Entertainment
• Spa or salon visits.
The wants section of your budget is often where you can make the biggest cuts, since these are things you don’t need to spend money on.
Savings and Debt
The remaining 20% in the 50/30/20 budget is dedicated to saving and paying down debt. You could split it equally, and devote 10% to saving and 10% to debt. Or you might divide it differently if you’re prioritizing one financial goal over another.
Some of the things you might save money for in your budget include:
• Longer-term goals, like the down payment on a house
• A child’s future college education
• Retirement.
Financial experts often recommend saving 10% to 15% of your income for retirement alone, so you might need to re-evaluate how much you’re setting aside for that goal. Increasing 401(k) contributions can help you get closer to that target if you’re not there yet. If you don’t have access to a 401(k), you might want to open an Individual Retirement Account (IRA).
On the debt side of the equation you might have student loans, credit cards, car loans, or other debts. How you choose to pay them down can depend on how much money you have to work with and what’s most important to you. The debt snowball method, for example, can help you pay off debts from smallest balance to highest. Meanwhile, the debt avalanche has you pay off debts based on interest rate, going from highest to lowest.
If you don’t have at least three to six months’ worth of living expenses set aside in an emergency fund, consider making that a priority over other goals. The reason: Without a back-up fund, any financial bumps in the road — say, an expensive car repair, medical emergency, or loss of income — could force you to run up credit card debt that could take months, even years, to get out from under.
Prioritizing monthly expenses means deciding where your money will go first. This might include monthly bills and basic living expenses, along with saving and extra payments on debt. What’s left over after that can go towards your wants.
The more you can automate your finances, generally the more successful you’ll be at budgeting and tracking your money.
Some of the payments you might choose to automate include:
Some of the bill payments you might choose to automate include:
• Mortgage or rent payments
• Utilities
• Cell phone and internet bills
• Car insurance
• Student loan payments
• Credit card bill payments
• Transfers to your emergency fund/other savings
• Retirement contributions.
Benefits of Automation for Financial Success
Here’s a look at some of the benefits of putting a portion of your spending and savings on autopilot:
• Reduces the risk of missing payments and getting hit with late fees and interest charges.
• Helps you build a consistent savings habit without having to remember to transfer money into savings or investment accounts.
• Minimizes the effort required to manage your finances manually.
• Removes funds from immediate reach, helping you avoid the temptation to spend savings on impulse purchases.
4. Set Up a Spreadsheet
To track your monthly expenses, you might set up a simple spreadsheet where you list your income and monthly expenses and set saving targets. You can use the SUM function in a spreadsheet to automatically add values together. At the end of each month, you fill in the data and see how everything lines up.
Key Spreadsheet Templates for Budgeting
If you’d rather not go to the trouble of setting up rows, columns, and formulas, you could simply use a pre-made spreadsheet template.
For example, Google Sheets offers free pre-made budget templates, such as an annual budget and a monthly budget. Or if you have Microsoft 365 software, you can download a free pre-made Excel template for budgeting, such as a monthly budget, personal budget, or household budget.
5. Use an App
If you’d rather not have to turn on your computer and manually enter values, you might prefer using a budgeting app for tracking monthly expenses.
These tools can typically link to your bank and credit card accounts and will periodically pull transaction data from your accounts. This allows you to see how much you’ve spent right on your screen in one simple place; no toggling back and forth.
Some apps even allow you to tag or categorize expenses and create graphs or charts so that you have a visual representation of where your money is going each month.
6. Track Your Money With Your Bank’s Help
Many banks provide built-in expense tracking features within their online banking platforms or apps. These tools can often link to outside accounts, track and categorize your transactions, and offer financial insights that can help stay on top of your budget.
For instance, SoFi can help you to:
• Connect financial accounts in a personal dashboard
• View and track expenses
• Monitor your credit scores
• Create a budget plan
• Track retirement savings and other money goals
• Review your debt situation.
Why Is Tracking Your Spending Important for Financial Management?
Tracking your expenses is essential for managing your money because it provides transparency into your spending habits. After a few months of tracking your spending, you’ll likely have a clear sense of where your money is going. This information can empower you to make better financial decisions moving forward.
How Tracking Supports Long-Term Financial Goals
When you spend haphazardly — and simply hope it will all work in the end— you can end up overspending on things that don’t mean that much to you, while giving short shrift to the things that do, like saving for a home, a child’s college education, or retirement.
It’s generally much easier to start saving for these milestones early, then to try to catch up later. This is due to the magic of compound returns — when the returns on your money get reinvested and earn returns of their own. The earlier you start saving for long-term goals, the more you benefit from compound growth.
How Often Should You Review Your Spending?
It’s a good idea to review your spending at least once a month. This allows you to see how your actual spending and saving amounts line up with your plan, and if you need to rejigger your budget for the next month.
Setting a Routine for Monthly Expense Reviews
To get into a routine for monthly expense reviews, you might choose a specific day each month (ideally at the end) to review your expenses.
If you’re budgeting manually, this is when you would gather your bank/credit card statements and receipts and log in your income and expenses. If you’re using an app, most of this work may already be done for you.
Either way, you’ll want to compare your actual spending to your planned spending, identify areas of overspending, and make any needed adjustments to your budget for the following month to ensure you’re on track with your financial goals.
Avoid Common Spending Tracking Mistakes
When trying to figure out how to keep track of expenses, you may make a mistake or two along the way. Here are two common ones to keep in mind:
Overcomplicating the Process
Using overly detailed tracking methods can be overwhelming and discouraging. It’s typically better to stick to simple and effective systems that fit your lifestyle. For example, if you’re not a spreadsheet person, don’t feel like you have to force yourself to embrace them. You might consider using a budgeting app, or simply pen and paper to stay on top of your budget. The best way to track monthly expenses is the one you’ll stick with.
Ignoring Small Expenses
Small, frequent purchases can add up significantly over time. To make sure day-to-day cash expenses don’t slip through the cracks, you might jot them down in a small notebook (or the notes app on your phone). Alternatively, you could collect your receipts in an envelope. Either way, it’s important to add these expenses to the appropriate spending categories at the end of the month.
Tracking your monthly expenses is an essential part of financial success. Whatever method you choose (pen and paper, a spreadsheet, or an app), it can give you key insights into your spending habits. Once you know where your money is going, you can make informed decisions about how you want to spend and save moving forward.
Interested in opening an online bank account? When you sign up for a SoFi Checking and Savings account with direct deposit, you’ll get a competitive annual percentage yield (APY), pay zero account fees, and enjoy an array of rewards, such as access to the Allpoint Network of 55,000+ fee-free ATMs globally. Qualifying accounts can even access their paycheck up to two days early.
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FAQ
Why is tracking spending important for financial management?
Tracking spending allows you to see where your money is going, and where you might be overspending (or wasting money), each month. When you track monthly spending regularly, it becomes easier to make a realistic budget so that you can spend and save wisely, as well as work toward other financial goals.
How often should I review my spending?
Ideally, you want to review your spending at least once a month, so you can assess your financial progress and make adjustments as needed. Some people prefer weekly reviews for more real-time tracking, while others do daily check-ins to stay on top of their budget. The key is consistency — frequent reviews help you catch issues early, maintain control over your finances, and ensure you’re sticking to your financial plan.
How can I categorize my expenses to get a better understanding of my spending habits?
One simple way to categorize your expenses is to divide them into three main buckets: needs (rent, utilities, groceries), wants (entertainment, dining out, subscriptions), and goals (savings and debt repayment).
With the 50/30/20 approach to budgeting, you would put 50% of your monthly take-home pay towards needs, 30% towards wants, and 30% towards saving (including retirement) and making debt payments beyond the minimum. Depending on your expenses and goals, however, you might need to decide to tweak these percentages.
What are some common mistakes people make when tracking their spending?
One common mistake people make when they track spending is overcomplicating the process, which can make it harder to stay consistent. Other common errors include: ignoring small expenses, which can add up and lead to inaccurate budgeting; and being inconsistent with tracking, which can result in overlooked wasteful spending or missed opportunities to save more effectively.
How do I track spending if I have irregular income?
It can be tricky to budget and track spending if you have irregular income, but it’s not impossible. One solution is to look back at what you’ve made over the last six months, then divide that number by six to determine your average monthly income. You can then use this number to offset your monthly expenses. Another option is use the lowest amount you earned over the last six months as your monthly income to ensure you don’t overspend.
About the author
Rebecca Lake
Rebecca Lake has been a finance writer for nearly a decade, specializing in personal finance, investing, and small business. She is a contributor at Forbes Advisor, SmartAsset, Investopedia, The Balance, MyBankTracker, MoneyRates and CreditCards.com. Read full bio.
SoFi members with Eligible Direct Deposit activity can earn 3.80% annual percentage yield (APY) on savings balances (including Vaults) and 0.50% APY on checking balances. Eligible Direct Deposit means a recurring deposit of regular income to an account holder’s SoFi Checking or Savings account, including payroll, pension, or government benefit payments (e.g., Social Security), made by the account holder’s employer, payroll or benefits provider or government agency (“Eligible Direct Deposit”) via the Automated Clearing House (“ACH”) Network during a 30-day Evaluation Period (as defined below).
Although we do our best to recognize all Eligible Direct Deposits, a small number of employers, payroll providers, benefits providers, or government agencies do not designate payments as direct deposit. To ensure you're earning 3.80% APY, we encourage you to check your APY Details page the day after your Eligible Direct Deposit arrives. If your APY is not showing as 3.80%, contact us at 855-456-7634 with the details of your Eligible Direct Deposit. As long as SoFi Bank can validate those details, you will start earning 3.80% APY from the date you contact SoFi for the rest of the current 30-day Evaluation Period. You will also be eligible for 3.80% APY on future Eligible Direct Deposits, as long as SoFi Bank can validate them.
Deposits that are not from an employer, payroll, or benefits provider or government agency, including but not limited to check deposits, peer-to-peer transfers (e.g., transfers from PayPal, Venmo, etc.), merchant transactions (e.g., transactions from PayPal, Stripe, Square, etc.), and bank ACH funds transfers and wire transfers from external accounts, or are non-recurring in nature (e.g., IRS tax refunds), do not constitute Eligible Direct Deposit activity. There is no minimum Eligible Direct Deposit amount required to qualify for the stated interest rate. SoFi members with Eligible Direct Deposit are eligible for other SoFi Plus benefits.
As an alternative to Direct Deposit, SoFi members with Qualifying Deposits can earn 3.80% APY on savings balances (including Vaults) and 0.50% APY on checking balances. Qualifying Deposits means one or more deposits that, in the aggregate, are equal to or greater than $5,000 to an account holder’s SoFi Checking and Savings account (“Qualifying Deposits”) during a 30-day Evaluation Period (as defined below). Qualifying Deposits only include those deposits from the following eligible sources: (i) ACH transfers, (ii) inbound wire transfers, (iii) peer-to-peer transfers (i.e., external transfers from PayPal, Venmo, etc. and internal peer-to-peer transfers from a SoFi account belonging to another account holder), (iv) check deposits, (v) instant funding to your SoFi Bank Debit Card, (vi) push payments to your SoFi Bank Debit Card, and (vii) cash deposits. Qualifying Deposits do not include: (i) transfers between an account holder’s Checking account, Savings account, and/or Vaults; (ii) interest payments; (iii) bonuses issued by SoFi Bank or its affiliates; or (iv) credits, reversals, and refunds from SoFi Bank, N.A. (“SoFi Bank”) or from a merchant. SoFi members with Qualifying Deposits are not eligible for other SoFi Plus benefits.
SoFi Bank shall, in its sole discretion, assess each account holder’s Eligible Direct Deposit activity and Qualifying Deposits throughout each 30-Day Evaluation Period to determine the applicability of rates and may request additional documentation for verification of eligibility. The 30-Day Evaluation Period refers to the “Start Date” and “End Date” set forth on the APY Details page of your account, which comprises a period of 30 calendar days (the “30-Day Evaluation Period”). You can access the APY Details page at any time by logging into your SoFi account on the SoFi mobile app or SoFi website and selecting either (i) Banking > Savings > Current APY or (ii) Banking > Checking > Current APY. Upon receiving an Eligible Direct Deposit or receipt of $5,000 in Qualifying Deposits to your account, you will begin earning 3.80% APY on savings balances (including Vaults) and 0.50% on checking balances on or before the following calendar day. You will continue to earn these APYs for (i) the remainder of the current 30-Day Evaluation Period and through the end of the subsequent 30-Day Evaluation Period and (ii) any following 30-day Evaluation Periods during which SoFi Bank determines you to have Eligible Direct Deposit activity or $5,000 in Qualifying Deposits without interruption.
SoFi Bank reserves the right to grant a grace period to account holders following a change in Eligible Direct Deposit activity or Qualifying Deposits activity before adjusting rates. If SoFi Bank grants you a grace period, the dates for such grace period will be reflected on the APY Details page of your account. If SoFi Bank determines that you did not have Eligible Direct Deposit activity or $5,000 in Qualifying Deposits during the current 30-day Evaluation Period and, if applicable, the grace period, then you will begin earning the rates earned by account holders without either Eligible Direct Deposit or Qualifying Deposits until SoFi Bank recognizes Eligible Direct Deposit activity or receives $5,000 in Qualifying Deposits in a subsequent 30-Day Evaluation Period. For the avoidance of doubt, an account holder with both Eligible Direct Deposit activity and Qualifying Deposits will earn the rates earned by account holders with Eligible Direct Deposit.
Separately, SoFi members who enroll in SoFi Plus by paying the SoFi Plus Subscription Fee every 30 days can also earn 3.80% APY on savings balances (including Vaults) and 0.50% APY on checking balances. For additional details, see the SoFi Plus Terms and Conditions at https://www.sofi.com/terms-of-use/#plus.
Members without either Eligible Direct Deposit activity or Qualifying Deposits, as determined by SoFi Bank, during a 30-Day Evaluation Period and, if applicable, the grace period, or who do not enroll in SoFi Plus by paying the SoFi Plus Subscription Fee every 30 days, will earn 1.00% APY on savings balances (including Vaults) and 0.50% APY on checking balances.
Interest rates are variable and subject to change at any time. These rates are current as of 1/24/25. There is no minimum balance requirement. Additional information can be found at http://www.sofi.com/legal/banking-rate-sheet.
*Awards or rankings from NerdWallet are not indicative of future success or results. This award and its ratings are independently determined and awarded by their respective publications.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
We do not charge any account, service or maintenance fees for SoFi Checking and Savings. We do charge a transaction fee to process each outgoing wire transfer. SoFi does not charge a fee for incoming wire transfers, however the sending bank may charge a fee. Our fee policy is subject to change at any time. See the SoFi Checking & Savings Fee Sheet for details at sofi.com/legal/banking-fees/. Third Party Trademarks: Certified Financial Planner Board of Standards Inc. (CFP Board) owns the certification marks CFP®, CERTIFIED FINANCIAL PLANNER®, CFP® (with plaque design), and CFP® (with flame design) in the U.S., which it awards to individuals who successfully complete CFP Board's initial and ongoing certification requirements.
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The average retirement age in the US is age 62, but that number doesn’t reveal the wide range of ages at which people can and do retire.
Some people retire in their 50s, some in their 70s; other people find ways to keep pursuing their profession and thus never completely “retire” from the workforce. The age at which someone retires depends on a host of factors, including how much they’ve saved, their overall state of health, and their desire to keep working versus taking on other commitments.
Still, having some idea of the average age of retirement can be helpful as a general benchmark for your own retirement plans.
Key Points
• The average retirement age in the U.S. is 62, with variations by state.
• Retirement age is influenced by financial, health, and personal factors.
• Many people retire earlier than planned due to unforeseen circumstances, which can lead to financial challenges.
• Specific savings benchmarks are recommended at different life stages to achieve retirement goals.
• One rule of thumb is to save 10 times one’s income by age 67 for a comfortable retirement.
Age 65 may be what many of us think of as the traditional age to retire, and according to 2024 research by the Employee Benefit Research Institute, more than half of workers surveyed expect to retire at age 65 or older. Yet 70% of the retirees in that study reported retiring before age 65.
In addition, the age of retirement by state varies widely. According to the U.S. Census Bureau’s American Community Survey, these are the states with the highest and lowest average U.S. retirement ages:
• Hawaii, Massachusetts, and South Dakota is 66.
• Washington, D.C., is 67.
• Residents of Alaska and West Virginia it’s 61.
A lower cost of living may be what’s helping West Virginia residents retire so young. West Virginia was one of the 10 states in the country with the lowest costs of living, according to the latest Cost of Living Index.
While those previously mentioned states give a look at two ends of the average retirement age spectrum in the U.S., many states have an average retirement age that falls closer to what one might expect.
Colorado, Connecticut, Iowa, Kansas, Maryland, Minnesota, Nebraska, New Hampshire, New Jersey, North Dakota, Rhode Island, Texas, Utah, Vermont, and Virginia all have an average retirement age of 65.
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Factors Influencing Retirement Age
There are many different factors that affect the typical retirement age. Some key factors include:
• Financial situation and retirement savings: How much retirement savings a person has, whether it’s in an investment account or an employer-sponsored plan, is an important determinant of their average retirement age. A recent survey by the AARP found that more than half of all respondents were worried about not having enough money for retirement.
Concerns like this may delay retirement age. In addition, those who are waiting to get their full Social Security benefits may decide to wait until the government’s designated full retirement age of 66 or 67, depending on their year of birth.
• Health: The state of a person’s health can also influence the age at which they retire. Those in good health may opt to work for more years, while those with medical conditions or disabilities may need to retire earlier.
• Location: Where they live may also affect how long an individual keeps working. In places where the cost of living is higher, people may work longer to pay their expenses now and in retirement. Others who are expecting to move to a more affordable place might retire earlier.
• Lifestyle goals: How a person plans to spend their retirement affects how much money they may need, which can impact when they retire. Someone who hopes to travel frequently may choose to work longer to keep earning money, for instance.
Retirement Expectations vs. Reality
Expectations can lead to disappointment. Anyone who has ever planned for a sunny beach vacation only to see it rain every day knows that.
Now imagine a person spending most of their adult life expecting to retire at 65 or earlier, and then realizing their retirement savings just isn’t enough.
According to the Employee Benefit Research Institute’s 2024 Retirement Confidence Survey, the expected average age of retirement is 65 or older. However, as noted previously, the actual average retirement age in the U.S. is 62, according to that same survey as well as other research. Retiring at 62, or earlier than planned, could lead to not having enough money to retire comfortably.
How to Know When to Retire
Not everyone retires early by choice. Six in 10 people retired earlier than they expected, mostly because of health problems, disabilities, or changes within their companies, according to a 2024 survey by the Transamerica Center for Retirement Studies.
It can be difficult for workers to exactly predict at what age they will retire due to circumstances that may be out of their control. For example, among adults who save regularly for retirement, 33% say they won’t have enough money to be financially secure in their post-employment years, and 31% don’t know if they will have enough, the AARP survey found.
In order to bridge any financial gap caused by not having enough retirement savings, 75% of pre-retirees in the Employee Benefit Research Institute’s survey expect they will earn an income during their retirement by working either full time or part time.
The survey found that half of respondents have calculated how much money they will need in retirement, and 33% estimate they will need $1.5 million. However, there is a gap between their expectations and their actions. One-third of respondents currently have less than $50,000 in retirement savings.
Common Misconceptions About Retirement Age
There are some misconceptions about the typical retirement age. These are two of the more common ones:
• There is an ideal age to retire. While research shows that many people believe age 63 is the best age to retire, it is a highly individual decision. Some people may need to work longer for financial reasons; others may have to take retirement sooner than anticipated.
• Age 65 is the traditional retirement age. The average retirement age in the U.S. is actually 62. Many people retire earlier than they think they will, often for health reasons or changes within their companies.
How Much You Should Have Saved for Retirement?
To retire comfortably, the IRS recommends that individuals have up to 80% of their current annual income saved for each year of retirement. With the average Social Security monthly payment being $1,177, retirees may need to do a decent amount of saving to cover the rest of their future expenses.
This is something to keep in mind when choosing a retirement date.
Retirement Savings Benchmarks by Age
To have enough savings for a comfortable retirement, one common rule of thumb is to save 10 times your income by the age of 67. To stay on track toward that goal, these are some retirement savings benchmarks individuals can aim for along the way.
Age
Retirement savings
30
1x income
35
3x income
40
3x income
45
4x income
50
6x income
55
7x income
60
8x income
67
10x income
Calculating Your Personalized Retirement Goal
To help determine how much money you’ll need for retirement, look at how much you currently have in retirement savings, what your Social Security benefit will be at the age you plan to retire — you can use the Social Security calculator to find this number — and any other income sources you may have, such as a pension or inheritance funds.
Then, draw up a retirement budget to get a sense of how much money you may need. Be sure to include estimated living expenses, housing, and health care costs. Plugging those numbers into a retirement calculator can help you determine how much money you might need per year.
Comparing what you’ll need annually for approximately 30 years of retirement with your savings, Social Security benefit, and other income sources will help you see how much money you still need to save in order to get there — and give you a target goal to aim for.
It’s Never Too Early to Start Saving for Retirement
Since retirement can last 30 years or more, financial security is key to enjoying your golden years.
Any day is a good day to start saving, but saving for retirement while a person is young could help put them on the path toward a more secure retirement. The more years their savings have to grow, the better.
“A very helpful habit,” explains Brian Walsh, CFP® at SoFi, “Is truly automating what you need to do. Recurring contributions. Saving towards your goals. Automatically increasing those contributions. That way you can save now and save even more in the future.”
You could even use something like automated investing if you think it could be helpful. Whatever you do, be sure to start saving as soon as possible. The longer you wait to save for retirement, the more you will need to save in a shorter period of time.
Benefits of Starting Early with Compounded Growth
Starting retirement saving early can be powerful because of a process called compounding returns.
Here’s how it works: Say you have money invested in your retirement account, or maybe you even do self-directed investing, and that money earns returns. As long as those returns are reinvested, you will earn money on your original investment and also on your returns.
Compound returns can be a way for your money to grow over time. The returns you earn each period are reinvested to potentially earn additional returns. And the longer you invest, the more time your returns may have to compound.
3 Steps to Start Preparing for Retirement
It’s not enough to have an idea of when you want to retire. To really reach that goal, it’s important to have a financial plan in place. These steps break down how to prepare for retirement.
Step 1: Estimate how much money you’ll need
One of the first steps a person could take toward their retirement saving journey is to estimate how much money they need to save. Besides the method outlined above, there is also a retirement savings formula that can help you estimate: Start with your current income, subtract your estimated Social Security benefits, and divide by 0.04. That’s the target number of retirement savings per year you’ll need.
Step 2: Set up retirement saving goals
It might be worth considering what retirement savings plans are available, whether that is an employer-sponsored 401(k), an IRA, or a savings account. Contributing regularly is key, even if big contributions can’t be made to retirement savings right now.
Making small additions to savings can add up, especially if extra money from finishing car payments, getting a holiday bonus, or earning a raise can be diverted to a retirement savings account. And periodically review the investments in your account, which may be mutual funds or exchange-traded funds (ETFs), to make sure they’re working for you.
If an employer offers a 401(k) match, it is typically beneficial to take advantage of that feature and contribute as much as the employer is willing to match.
Along with receiving free money from an employer, there are also tax benefits of contributing to a 401(k). Contributions to a 401(k) are pre-tax — that lowers taxable income, which means paying less in income taxes on each paycheck.
In addition, 401(k) contributions aren’t taxed when deposited, but they are taxed upon withdrawal. Withdrawing money early, before age 59 ½, also adds a 10% penalty.
Step 3: Open a Retirement Account
If access to an employer-sponsored 401(k) plan isn’t available — or even if it is — investors might want to consider opening an IRA account. For investors who need a little help sticking to a retirement savings plan, they could consider setting up an automatic monthly deposit from a checking or savings account into an IRA.
In 2024 and 2025, IRAs allow investors to put up to $7,000 a year into their account ($8,000 if they’re 50 and older). There are two options for opening an IRA — a traditional IRA or a Roth IRA, both of which have different tax advantages.
Traditional IRA
Any contributions made to a traditional IRA can be either fully or partially tax-deductible, and typically, earnings and gains of an IRA aren’t taxed until distribution.
Roth IRA
For Roth IRAs, earnings are not taxable once distributed if they are “qualified”—which means they meet certain requirements for an untaxed distribution.
Once you set up an IRA, you’ll need to choose investment vehicles for your funds. Investors who don’t have a lot of money to work with might consider something like fractional shares that allow individuals to invest in a portion of an ETF or share of stock, for instance.
Late to the Retirement Savings Game?
Starting to save for retirement late is better than not starting at all. In fact, the government allows catch-up contributions for those aged 50 and over. Catch-up contributions of up to $7,500 in 2024 and 2025 are allowed on a 401(k), 403(b), or governmental 457(b). In 2025, those ages 60 to 63 can make a catch-up contribution up to $11,250, thanks to SECURE 2.0
A catch-up contribution is a contribution to a retirement savings account that is made beyond the regular contribution maximum. Catch-up contributions can be made on either a pre-tax or after-tax basis.
As retirement gets closer, future retirees can plan their savings around their estimated Social Security payments. While this estimate is not a guarantee, it might give a retiree — or anyone planning when to retire — an idea of how much they might consider saving to supplement these earnings.
Social Security benefits can begin at age 62, which is considered the Social Security retirement age minimum. However, full benefits won’t be earned until full retirement age, which is 66 to 67 years old, depending on your birth year.
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FAQ
Does the average retirement age matter?
The age at which you retire affects your Social Security benefit. For instance, if you retire at age 62, your benefit will be about 30% lower than if you wait until age 67.
What is the full retirement age for Social Security?
The full age of retirement is 67 for anyone born in 1960 or later. Before that, the full retirement age is 66 for those born from 1943 to 1954. And for those born between 1955 to 1959, the age increases gradually to 67.
How long will my retirement savings last?
One strategy you could use to help determine how long your retirement savings might last is the 4% rule. The idea behind the rule is that you withdraw 4% of your retirement savings during your first year of retirement, then adjust the amount each year after that for inflation. By doing this, ideally, your money could last for about 30 years in retirement.
However, your personal circumstances and market fluctuations may affect this number, which means it could vary. It’s best to use the 4% rule only as a general guideline.
Is early retirement realistic for most people?
While early retirement can sound enticing, for most people, it is not realistic because they don’t have enough retirement savings. For example, one-third of respondents to a survey by the Employee Benefit Research Institute said they have only $50,000 saved for retirement. And according to an AARP survey, 33% of adults who save regularly for retirement say they won’t have enough money to be financially secure in their retirement years.
What’s the difference between early and full retirement age?
When it comes to receiving Social Security benefits, early retirement age is 62 and full retirement age is 66 or 67, depending on your birth year. However, retiring early at age 62 and starting these benefits can result in a benefit that’s as much as 30% lower than waiting until the full retirement age of 67.
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Budgeting is an essential part of money management. Without any kind of plan, you can end up living paycheck to paycheck, accumulate debt, and miss opportunities to save. Excel can be a powerful budgeting tool that allows you to track your income and expenses and plan for future financial goals.
Below, we’ll walk through the process of creating a budget in Excel, either from scratch or using a template, plus offer tips on how to track your spending, set financial goals, and avoid common budgeting mistakes.
Key Points
• To create a budget in Excel, you can start with a blank workbook or download a premade budget template.
• When starting from scratch, you’ll need to list income sources, expense categories, and months.
• Once you add data, you can calculate totals using the SUM function.
• Customization options include adding financial goals, charts, and graphs.
• Using a premade budget template offers a ready-made structure, saving time and allowing you to focus on entering financial information right away.
How to Use Excel to Make a Budget From Scratch
The steps below will help you use Excel to create a basic budget that tracks monthly income and expenses over one year on a single spreadsheet. Once you nail the basics using Excel for budgeting, you can customize your spreadsheet to create all different kinds of budgets from scratch. Here’s how to get started.
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Step 1: Opening a Workbook
To begin creating a budget in Excel, you’ll need to open Microsoft Excel and create a new workbook. This blank spreadsheet will serve as your budgeting tool. Note that the columns are letters (A, B, C, D, etc) and the rows are numbers (1, 2, 3, 4, etc). We’ll refer to each box in the spreadsheet, such as A1, B2, C3, as a “cell.”
Step 2: Adding Income
To start your budget, add your sources of income. Skip a row from cell 1A and label box 2A “Income.” After Income, you’ll want to list down all sources of income (in cells 3A, 4A, etc.). You might only have one or two sources of income (such as “Salary” and “Tutoring”). Or, you might have several if you earn a paycheck plus extra money through another side gig and/or you have passive income streams like real estate income or investment dividends.
Label the final box in your income list “Total.”
Step 3: Adding Expenses
Skip a space under the Total cell in column A and write “Expenses.” Next, you’ll want to list your regular expenses down column A in the same way you did Income, with the final box labeled “Total.”
Step 4: Adding the Months of the Year
In row 1, column B (which is cell B1), you’ll want to enter “Jan.” To have Excel add the rest of the months for you, simply select cell B1, click the lower right corner of the cell, and drag it across 12 cells to column M (or cell M1). Excel will fill in all the other months.
Step 5: Entering Data to Start Budgeting
Now it’s time to start entering income and expense data for each month that you have available. In the cells labeled Total, you’ll need to enter the SUM function. To do this, select the cell and type “=SUM” followed by the cell range you want added together in parentheses, then press Enter.
For example, if you only have two sources of income listed in column B (cells B3 and B4), you’d type “=SUM(B3:B4).” To add the SUM function for each month, simply click the lower right corner of the cell and drag it across all the rows through to the “Dec.” column.
Note: You can also add a “Year” column after Dec. to get your totals for the year. To do this, you’ll need to add the SUM function to the first cell under “Year,” then drag it down so you can get year-end totals for each source of income and each expense category.
Step 6: How to Track Spending and Stick to a Budget
An Excel budget allows you to quickly see how your income and spending line up. To do this, you can add a “Balance” heading in column A, under your Expenses section, to subtract your expenses from your income. (You might skip a row for a cleaner look.) Next, use the SUM function and input the cells you want subtracted from each other, such as “=SUM(B5-B12).”
Ideally, you’ll end up with a positive (rather than a negative) number in your Balance cell.
Step 7: Adding Some Goals
To take your budget to the next level, you’ll want to think about your goals and how much you need to save each month to achieve them. Short-term goals might include building an emergency fund, paying off credit card debt, or saving for a vacation. Long-term goals might include funding your retirement and saving for a child’s future college education.
If your Excel budget shows that your monthly expenses are close to or higher than your monthly income, you’ll want to comb through your regular expenses and find areas where you can cut back. Any money you free up can then be redirected towards saving for your goals.
To help ensure you make progress towards your goals, you might add them as line items in your budget. This allows you to allocate money towards saving each month, just as you earmark money for expenses. Once you know how much you want to save each month, consider setting up an automated monthly transfer from your checking account to a high-yield savings account for that amount.
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Customizing a Pre-Made Excel Budget Template
A quicker way to create a budget in Excel is use one of their many premade budget templates. Simply go to File>New, then search for the term “budget.” You’ll see a library of budget template options, including a personal monthly budget, household budget, college budget, and vacation budget.
Using one of these templates may allow you to create a more detailed budget. For instance, a template might include “Projected” and “Actual” income and expenses and tabulate the differences.
You can also customize an Excel budget template to make it suit your needs. For example, you can add rows or columns by selecting where you want to add a column or row, right-click, then scroll down to “Insert.” You’ll then have the option to add to “Table Columns to the Left” or to “Table Rows Above.”
In addition, you can get rid of sections that aren’t relevant to you. For example, if you don’t have any loans, you can delete the “Loans” row under the Monthly Expenses tab by right clicking the tab, select “Delete” and “Table Rows.”
How to Track Spending and Stick to a Budget
Once you prepare an Excel budget, you’ll have a sense of your average monthly earnings and spending and how they line up. You may also have a clearer idea of your goals, and how you want to tweak your spending to help you achieve them.
To better manage your money and stick to your spending targets, it’s a good idea to track your spending — at least for a month or two. You can do this by carrying around a small notebook and pen and making it a habit to record every transaction you make (or, you could use the Notes app on your phone). A higher-tech option is to use a budgeting app that links to your credit and debit cards directly. These tools automatically record and categorize your transactions for you (though you may still have to track cash payments).
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Tips for Maintaining Your Excel Budget
To make sure your budget is effective over time, consider these tips:
• Review your budget monthly: This can help you assess spending patterns and determine if you need to make adjustments in your budget or spending moving forward.
• Refine categories: As you track spending, you may find that you need to adjust spending categories listed on your budget. You may also decide to change your savings goals based on changes in your habits or financial priorities.
• Use charts and graphs: Excel allows you to create graphic representations of your data. These charts and graphs can help you visualize where money is going, analyze spending trends, and identify any problem areas.
Excel can be a highly effective budgeting tool when consistently and correctly. Here are some common pitfalls to avoid.
• Ignoring small expenses: Minor purchases — like a latte here, a bagel sandwich there — can add up to a sizable sum and impact your budget.
• Overcomplicating the spreadsheet: Keeping your Excel budget layout simple can make it easier to manage. If it becomes too time consuming to fill in your data, you might simply give up on budgeting after a few months.
• Not accounting for irregular expenses: When listing expenses, it’s important to factor in irregular costs like quarterly bills and annual fees. You can do this by estimating the annual cost, then dividing that sum by 12 to come up with a monthly cost.
Excel Budget Template Examples
Here are some examples of different Excel budget templates you can use:
• Personal Budget: This offers a simple layout for tracking income and expenses. Monthly and yearly totals are calculated and the spreadsheet is fully customizable.
• Personal Monthly Budget: This template allows you to hone in on one month at a time. You can also set expected income and expenses, then input your actual income and expenses and see how they line up.
• Holiday Shopping Budget: This Excel budget template makes it easy to organize your holiday shopping. You can track what you want to purchase, what you have purchased, how much it all cost, and even if it’s been wrapped or not.
• Wedding Budget: You can use this template to track spending on flowers, reception, photography, and more. It also records estimated versus actual costs and calculates the difference.
The Takeaway
An Excel budget can be a simple and effective way to manage your money. Whether you build one from scratch or use a premade template, Excel allows you to organize your income and expenses, use built-in calculators for accuracy, and create visuals that highlight trends and offer insights into your financial health.
Once you have a clear picture of what’s coming into your bank account each month and where that money is going, you can take better control over your finances, start siphoning more into savings, and get closer to your goals.
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FAQ
How often should I update my Excel budget?
It’s a good idea to update your Excel budget monthly, as this can help you identify overspending, adjust for unexpected expenses, and keep your financial goals on track. It’s also a good idea to check in on your budget whenever there are significant changes to your income or expenses. This can help ensure your budget stays aligned with your financial situation.
Can I use Excel for both personal and business budgeting?
Yes, Excel can be a good tool for both personal and business budgeting. Personal budgets focus on tracking income, expenses, and savings, while business budgets typically include additional elements like cash flow, profit and loss statements, and financial forecasting. Excel allows for multiple sheets within a single workbook, making it easy to manage different aspects of your financial life separately.
How do I handle irregular income in my Excel budget?
To handle irregular income when budgeting, you’ll want to come up with a monthly average based on historical data. For example, if you’re expecting to earn at least $12,000 for the year from freelance work, you would allocate $2,000 a month to income, and use that money to offset monthly expenses.
What are some advanced Excel features that can enhance my budget?
Excel offers a number of advanced features that make budgeting more effective. For example, you might tap advanced charting options to turn your data into pie charts and line charts or use Conditional Formatting to highlight all negative numbers in red and positive numbers in green. Another helpful feature is PivotTables, which allows you to extract data from a larger spreadsheet and put it into a smaller table and even reorganize the data.
How can I visualize my budget data in Excel?
Visualizing budget data in Excel can be a great way to track spending and identify trends. For example, you might create a pie chart to show the proportion of your income you allocate to each spending category. This quickly highlights where the majority of your money is going and can uncover areas where you may be overspending. Or you might create a bar graph that illustrates your spending in different categories for each month of the year. This can help you to see patterns and seasonal fluctuations.
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