How to Create a Personal Financial Statement

 

how to do a personal financial statement

A personal finance statement form is used by individuals who would like to take a closer look at their financial health. It may be requested by financial institutions or investors if you're looking to take out a loan or secure an investment. Personal Balance Sheet A balance sheet is the second type of personal financial statement. A personal balance sheet provides an overall snapshot of your wealth at a specific period in time. Personal Financial Statement: A document or spreadsheet outlining an individual's financial position at a given point in time. A personal financial statement will typically include general.


How to Create Personal Financial Statements for Business Owners


Personal financial statements generally differ from business financial statements because the business itself is one of the assets owned by the person. If the business is a sole proprietorship, the business's assets and liabilities can be intermingled with your personal financial statements. Otherwise, ownership in and earnings from the business will simply be line items in the asset section of personal balance sheet and the revenue section of the income statement.

This article was co-authored by Michael R. Michael R. Lewis is a retired corporate executive, entrepreneur, and investment advisor in Texas. Categories: Business Finances. Lewis Updated: March 29, There are 22 references cited in this article, which can be found at the bottom of the page.

Set up a balance sheet. The first step in creating personal financial statements is to create a Balance Sheet, which display your overall net worth at a specific point in time, such as the end of the year, by illustrating the difference between what you owe and own. The balance sheet is composed of columns that list your assets what you own and your liabilities what you owe.

Start your balance sheet by opening a new sheet in a spreadsheet program. Start by creating a column labeled "Assets. As you go, write in the asset categories to the left of their values.

This will result in two side-by-side columns that split up your assets by type. If you are applying for a loan, you may be required to fill out an SBA or bank-specific personal financial statement. In this case, be sure to obtain the proper document and fill it out as instructed. Determine the value of your liquid assets.

Liquid assets are those assets that can be easily liquidated, which means turned into cash. These include current balances of your personal cash reserves, how to do a personal financial statement account sand saving account s.

In addition, the balances of any money market account accounts you own should be recorded in this category. Sum up the balances of these accounts to find your total liquid assets. Liquid assets are sometimes also referred to "cash and cash equivalents," especially in formal accounting contexts. Find the value of your investments, how to do a personal financial statement. Investments are those assets that are held in investment or brokerage accounts.

This includes investment portfolios, retirement funds, mutual funds, certificates of deposit CDsand the cash value of your life insurance policy. These assets should be recorded at their current market value for the date of balance sheet creation. Check online or call for your current balance in these accounts.

List your fixed assets. Fixed assets are those assets that would be the most difficult to liquidate. For example, your home, other properties, and vehicles are fixed assets. In addition, any valuable collections, artwork, antiques, or other valuables are considered fixed assets. In the context of personal financial statements, these are sometimes called "large assets, how to do a personal financial statement. Sum up your assets. Underneath the last asset category, sum up the total value of all of your assets.

How to do a personal financial statement a line for "Total Assets" on the left and record the total value to the right.

The program should sum the values for you. Create a how to do a personal financial statement column named "Liabilities. All liabilities should be listed as the amount owed at the present date. Check your bills or account statements for the most up-to-date information. Tally your liabilities by type. Go down the list of loan balances you owe, credit you have been extended, how to do a personal financial statement, unpaid bills you have, and taxes you owe.

Separate out each category of liabilities and list their value to the right, just like you did with your assets. Your categories might include: Notes payable.

Money you owe an individual or business, how to do a personal financial statement. Outstanding personal bank loans. Unpaid bills. Auto loan balances. Mortgage balances, how to do a personal financial statement. Unpaid state and federal taxes. Loans taken out against your life insurance policy. Credit card balances. Sum up your liabilities. When you've listed all of your liabilities and their values, type in another category on the left for "Total Liabilities.

Double-check your work to make sure you didn't miscalculate the total or exclude any liabilities. Subtract your total liabilities from your total assets. The result is your net worth. List this total next to the "Net Worth" cell. Your net worth is how much you are "worth" and represents how much you would have left if you were forced to sell all of your assets and settle your liabilities.

Create a box labeled "Net Worth. This box will list the difference between what you own and what you owe, otherwise known as your net worth. This figure is what business bankers look for when reviewing an entrepreneur's personal financial statement. Start your income statement on a separate sheet. Your personal income statement is a record of your inflows and outflows of money over a specific period of time, such as a month or year.

In other words, this statement shows how much you make and where it goes. Like the balance sheet, the income statement is broken into categories. However, these show income and expenses rather than assets and liabilities.

The end result of creating an income statement is your how to do a personal financial statement income," which shows your personal "profit" or loss for the period. Follow the lender's specific requirements when it comes to reporting this type of income. Create a column called "Income. Here, you will list all of your sources of income over the period. To the right, you will list the amount of income received from each source.

For example, you will likely have a category for your salary. To the right of this cell, you would enter the amount you earned from your primary occupation during the period. Find your total income from all sources. Your income will be listed in categories based on how it was earned. This list will include all inflows of cash or value from the period, whether from wages, investment, or other sources. At the bottom, include an extra cell for "Total Income" and insert the sum of your different incomes for the period.

Interest Income. Social Security benefits. Other income. Create a second column on the sheet called "Expenses. Expenses include everything you paid for, from your loan payments to food and entertainment.

At the bottom, leave room for a "Total Expenses" cell so that you can sum up your total expenses. Car loan payments. Insurance premiums. Investment Contributions and fees. Court-ordered payments like alimony or child support. Discretionary spending entertainment, hobbies, meals out, etc. Medical expenses.

Other expenses. Subtract your total expenses from your total income. This total is your net income. Write the total down immediately following the expenses column. A positive net income means that you earned more than you spent, whereas a negative one means the opposite.

Use your net income as a starting point for reassessing your spending, if necessary. Analyze each column in both documents. Financial statements are useful tools for businesses and investors who want to assess the financial health of a business.

 

Evaluating Your Personal Financial Statement

 

how to do a personal financial statement

 

A personal finance statement form is used by individuals who would like to take a closer look at their financial health. It may be requested by financial institutions or investors if you're looking to take out a loan or secure an investment. Personal Balance Sheet A balance sheet is the second type of personal financial statement. A personal balance sheet provides an overall snapshot of your wealth at a specific period in time. Personal Financial Statement: A document or spreadsheet outlining an individual's financial position at a given point in time. A personal financial statement will typically include general.