To demonstrate the construction of a basic formula, we will begin working on the Budget Detail worksheet in the Personal Budget workbook, which is shown in Figure 2.2.

This is what gives Excel the ability to create a variety of what-if scenarios, which will be explained later in the chapter. As a result, when the numbers in the cell references are changed, Excel automatically produces a new output. This means that Excel uses, or references, the number entered into the cell location when calculating a mathematical output. Furthermore, when constructing a formula in Excel, you use cell locations that, when added to a formula, becomeВ cellВ references. Sheets two through four are ones we will return to later in the semester with our chapter on Financial functions.ДЇigure 2.1В Completed Personal Budget Workbook Creating a Basic FormulaДЇormulasВ are used to calculate a variety of mathematical outputs in Excel and can be used to create virtually any custom calculation required for your objective. As a result, the Budget Summary worksheet serves as an overview of the data that was entered and calculated in the other three worksheets of the workbook. The first worksheet, Budget Summary, contains formulas that utilize or reference the data in the other three worksheets. Notice that this workbook contains four worksheets. Excel can make managing your money a fun and rewarding exercise.ДЇigure 2.1 shows the completed workbook that will be demonstrated in this chapter. Whether you are managing your expenses during college or maintaining the finances of a family of four, a personal budget can be a vital tool when making financial decisions. Organizing and maintaining a personal budget is a skill you can practice at any point in your life.

Most financial advisors recommend that all households construct and maintain a personal budget to achieve and maintain strong financial health. The objective used for this chapter is the construction of a personal cash budget. This section reviews the fundamental skills for entering formulas into an Excel worksheet.

Work with complex formulas by controlling the order of mathematical operations.Understand relative referencing when copying and pasting formulas.

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