I found a solution, based on the other answers bits and pieces. So it was a projection problem, I had other shape files which their projections were ok. here are the steps I took.
- Add Layer of my xlsx file
- right click on it to display XY Data and set the X and Y coordinates field, at this point I do not define the projection, after applying these, a new table will be created under layers
- right click on the new table -> data -> Export Data -> to a shapefile(give it a proper name), when asked to add the created file as a layer I said yes.
- I removed all the other layers and be left out with my new shapefile i have just added
- Go to tool box -> Data Management -> Projections ->Define Projection. select the feature class, browse projection them import -> browse to a shape file that already has projection set then apply these changes.
final step (changing Meter coordinates to decimal degrees coordinates)
- right click on the shapefile under layers -> Open attributes table
- Add new fields, in this case two, set data type to double, field names should be for X and Y coordinates.
right click on each field-> Calculate Geometry -> select which coordinate column you want to transform, change at the last drop down to decimal degrees then Ok, repeat this step for the other field for its corresponding coordinate
therefore you should have two new fields X & Y with decimal degree format