Buzz
Although we love online budgeting tools, a reliable spreadsheet can be just as effective. Go Banking Rates showcases the Excel formulas that can help with your budgeting.
They highlight that Excel offers 53 financial functions, and while using all of them can be overwhelming, they've compiled a list of the most essential ones. Here are two that stand out:
The Payment Function =PMT(rate, nper, pv, [fv], [type])
Bob Flisser, vice president of Software School, Inc., mentions, "the payment function is the most crucial... it calculates the monthly payment when repaying any type of loan, be it an auto loan, mortgage, or others."
Flisser clarified that this function aids borrowers in visualizing different scenarios they might face.
Data tables and scenarios are particularly useful, as they allow you to play out 'what if' scenarios, such as seeing how the payment changes if the interest rate rises or the principal amount decreases.
The "IF" function: =IF( condition, [value_if_true], [value_if_false] )
This conditional formula assists users in determining whether they qualify for certain tax deductions or credits. For instance, the earned-income tax credit adjusts based on income levels for various filers.
By comparing one or more values against a set threshold, users can figure out if they meet the income requirement to receive the tax credit.
While some Excel experts might already be well-versed in these formulas, if you're just starting out or haven't explored its budgeting formulas yet, it's definitely worth your time. Click the full post for more formulas.
Image by Andrea Allen.
