A basic personal financial statement template gives you a consolidated view of your financial health, with sections for assets, liabilities, and net worth. This information is essential for understanding your financial situation, setting financial goals, and making informed decisions about your money.
Creating a basic personal financial statement is relatively straightforward. You can use a simple spreadsheet or download a template from a financial website or software program. The key is to be accurate and consistent in your data entry.
Assets
Assets are anything you own that has value. This can include cash, investments, real estate, vehicles, and personal belongings. List each asset in its own row, along with its current market value. If you have any debts secured against an asset, such as a mortgage on your house or a loan on your car, list the debt as a liability and the asset’s net value (market value minus debt) as the asset value.
Assets are typically divided into two categories: current and non-current. Current assets are those that can be easily converted into cash, such as cash, checking accounts, and marketable securities. Non-current assets are those that cannot be easily converted into cash, such as real estate, vehicles, and equipment.
It is important to note that the value of assets can fluctuate over time. Therefore, it is important to update your basic personal financial statement regularly to ensure that it reflects your current financial situation.
Liabilities
Liabilities are anything you owe money on. This can include credit card debt, student loans, mortgages, and car loans. List each liability in its own row, along with the current balance. If you have any assets that are secured against a liability, such as a house that is mortgaged, list the asset in the assets section and the liability in the liabilities section.
Liabilities are typically divided into two categories: current and long-term. Current liabilities are those that are due within one year, such as credit card debt and short-term loans. Long-term liabilities are those that are due more than one year from now, such as mortgages and car loans.
Net Worth
Net worth is simply the difference between your assets and your liabilities. To calculate your net worth, add up the values of all your assets and subtract the values of all your liabilities. Your net worth is a measure of your overall financial health. A positive net worth means that you have more assets than liabilities, while a negative net worth means that you have more liabilities than assets.
Tracking your net worth over time can help you to see how your financial situation is changing. If your net worth is increasing, it means that you are making progress towards your financial goals. If your net worth is decreasing, it means that you need to make some changes to your financial plan.
