A personal financial statement is used to give you, or others, an overview of what you owe and the property you own. Personal financial statements are comprised of two groups of numbers, a balance sheet and an income sheet. The balance sheet shows what, and how much you owe. The income statement gives you what your income and expenses are for a week for your lifestyle. When you put these two groups of numbers together, you get an overview of what your financial health is. Personal financial statements are often used for credit, loans, or debt to income ratios.
How would you find your financial health? You would use the following steps to create your own personal financial statement.
First, let’s start with the balance sheet. You can use Excel, as an example, or you can use any similar software. The first step you will take is to open a balance sheet template. Name this template something you will remember like “My Balance Sheet”. Then go to your banks website and log into your account and find your account summary. Look for the most up to date totals for each account; these are usually listed on the first page you come to. Mortgage lenders have similar pages. Many times both accounts will be with the same institution. When you find these numbers, transfer the current account balance to the balance sheet in the proper space.
Next, contact a real estate agent who does appraisals. This person will give you the current market value of what your real estate is worth. You don’t need to do this step each month, just every four months to stay current. Put this number into the asset column of the balance sheet.
After that, log onto your stock or brokerage account. You will need the most recent value of your investments for the current month. Put these numbers into the appropriate spaces in the balance sheet. Once this is finished, go find your loan balances. This category includes the credit cards, loans and installment payments. Bring these numbers over to your balance sheet and put them in the liability column. This is the first half of the personal financial statement.
The next half of a personal financial statement is the Income Statement. Start by finding the income sheet template in Excel or whatever software you are using. Open up the template, then head back to the bank accounts. Log back into your accounts if you logged out. Once you have the account window open, download the past thirty days of activity for each account you have. You will want to save this information as a Comma Separated Value, or CSV, file. This file helps transfer of information easier into Excel and other spreadsheet programs.
Once you have this information you will categorize each item on the bank statements. Use categories such as Clothing, Food, Medical, Pets, Car and what other items you may need. Your templates will have a useful list of categories to work with when you work through this section of the personal financial statement. To find the totals for each of your categories you will use the following commands from the drop down menus.
Data>Filter>Auto Filter> Auto Sum
Fill in the requested cells to get your numbers then put each total in the appropriate slot of your spreadsheet. This gives your expense and income amounts. As a tip, the income on your personal financial statement should be greater than your expenses.
