How to Fill in Your Personal Balance Sheet

How to Fill in Your Personal Balance Sheet

Where in the world do you stand with money!!? The head in the ground or ostrich approach to managing money gets old fast. You need more financial security and less stress about money.

But where do you start with money?

There’s no better way to start than to fill in your personal balance sheet. A balance sheet is the best ever snapshot of where you stand with money. It’s one of three financial statements. I freakin’ love financial statements!

No more ignoring bills or brushing debt under the rug! Financial statements help you get focused and organized with your money and life. This is part two of a 4-part financial education series. Here’s part one that explains why financial statements are hands down the best way to manage your money.

What exactly is a balance sheet?

A balance sheet is a snapshot or picture of exactly where you stand right now with money. This shows your total current assets (everything you own), liabilities (everything you owe), and net worth (take a breather, this could be in the negative!).

First, I want to acknowledge that it’s exciting, but also incredibly scary to get super clear on where you are now. The process of filling in your personal balance sheet takes time and work. Like the saying goes, “no pain, no gain.”

There’s a lot to gain in knowing where you stand. It’ll help you get out of debt, save up for a trip, or reduce anxiety. You can finally start living the life you’ve always envisioned for yourself!

You can create your own spreadsheet for your balance sheet. Or I created a financial (day) planner that has all the financial statements plus a debt and investing calculator. Here’s details on how you can get the exact spreadsheet I use and I can help you complete your financial statements!

How to Fill in Your Personal Balance Sheet

1. Fill in your assets

To fill in your personal balance sheet first you’ll write down the total current value of all your assets. Again, an asset is what you own. Examples of assets are your home, car, bank account, savings, retirement accounts, or other investments.

If you’re a homeowner I recommend using sites like Zillow, Redfin, or Trulia to get an estimate of your home’s value. Use a site like Kelley Blue Book to see how much your car is valued right now. It’s always shocking how much car values drop!

For both your home and car you’ll enter the total current value now, not the purchase price! If you are renting an apartment or leasing a car you don’t own the asset so the value on your personal balance sheet would be zero.

A moment of truth when you fill in your balance sheet is entering the value of your saving and investment accounts.

It is incredibly frustrating to work hard and have little to nothing to show for it! Where is your money going?! You’ll find out next in the series when you fill in your personal Statement of Cash Flow. Right now with your balance sheet you’ll enter in the value of your bank, saving, and investment accounts.

You can make six-figures and have zero savings. Or you can make $30,000 and have hundreds of thousands of dollars to your name!

Your income is not on your balance sheet anywhere! The balance sheet shows the real deal or authentic picture of your financial house. It boils down to you either have money or you spend money. This financial statement shows what you’ve done with the money you’ve earned. Have you invested it? Or have you blown it and taken out more debt?

The best-selling book, The Millionaire Next Door, showed that true millionaires aren’t flashy and reject status symbols!

Get the total value of your assets and then move to your liabilities.

2. Fill in your liabilities

Enter the total current value of your liabilities, or everything that you owe. This is how much you owe on your home, car, student loans, credit cards, store cards, medical debt, ‘I owe you’s’, payday loans, or any debt. This part is not fun, but 100% necessary.

If you want to get out of debt, you’ve got to know exactly how much you owe!

For homeowners, you’ll find out the outstanding balance of your mortgage. Then find out how much you owe on your car.

Often people have seven student loans and multiple credit cards. It is no wonder why money can feel overwhelming and chaotic. It will take time to sort through all your debt, but you’ll feel empowered knowing where you stand. When you know where you stand, then you can do something about it!

Tally up the total amount that you owe!

3. Fill in your net worth

The last step on how to fill in your personal balance sheet is to enter your net worth. All the hard work of gathering your info is done. Your net worth is the total current value of your assets minus the total current value of your liabilities.

Seeing your net worth is truly eye opening. All the spending patterns or saving habits are put together with a snapshot of your current financial health. For example, if you have assets of $25,000 and liabilities of $40,000 you’ll have a net worth of -$15,000.

Completing your balance sheet is like going to the doctor. You have symptoms and it’s annoying having to make an appointment and take off work. However, once you get a diagnosis and treatment plan you’re on your way to feeling good!

I recommend filling in your balance sheet every quarter. Knowing where you stand will help you stay accountable for your financial goals. Coming back every three months and updating your assets and liabilities will help you stay motivated and celebrate your progress.

You will see your assets growing and liabilities shrinking!

Become Chief Financial Officer and start running the business of you. Manage your money like a boss by filling in your balance sheet. Give it a try and let me know how it goes!

P.S. Stop worrying about money and do something about it! Let’s work together to reach your financial dreams. Check out info on a one-on-one money coaching session here.

Carly Michelle Best Money Class Ever

Hi! I'm Carly

Welcome! Let’s be friends:). I’m a Finance grad, creator of Best Money Class Ever and money coach. Here you’ll learn how to say bye, bye, bye to debt, build savings, and stress less about money.