How to Create A Personal Balance Sheet? 3 Easy Steps

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Personal Balance Sheet

The best way to know all about or collect all information about your finances is by making a personal balance sheet. We do understand this might be a confusing task with no proper knowledge of doing so. But, yes a personal balance sheet will clear all your doubts and confusion by presenting you with a clear picture of your financial situation. So let us understand more about the personal balance sheet as well as its related terms such as personal balance sheet definition, what is a personal balance sheet, creating a personal balance sheet, etc. 

What Is A Balance Sheet?

A balance sheet is known to be a financial statement that depicts all of the company’s liabilities as well as shareholder equity from its total assets. Thus, the balance sheet tells us about the internal and external affairs of the company, how well is the company performing. 

So, the equation representation of the balance sheet is as follows:

  • Balance Sheet = Assets + Liabilities 

OR 

  • Assets = Liabilities + Shareholders’ Equity

What Is A Personal Balance Sheet?

A personal balance sheet is the same as the normal balance sheet which depicts all of the company’s liabilities as well as shareholder equity from its total assets or say tells you about assets vs liabilities. So, the personal balance sheet definition tells you about your personal financial health by including all your assets and liabilities. Thus, it is a list of everything you own as well as tells you where all of your money is and how much you owe and your debts. 

How To Make A Personal Balance Sheet? 

To create a personal balance sheet you need to follow some basic steps and analyse few specific things too. So let’s create a personal balance sheet

  • Step 1: Decide the Reporting Date and the Period of personal balance sheet
  • Step 2: Make a list of your Assets
  • Step 3: Make a list of your Debts or liabilities
  • Step 4: Calculate Shareholders’ Equity
  • Step 5: Add Total Liabilities to Total Shareholders’ Equity
  • Step 6: Compare the Total Liabilities to Total Shareholders’ Equity with Assets total
  • Step 7: Examine your balance sheet.

Now, discuss these steps involved in creating a personal balance sheet in detail. 

Step 1: Decide the Reporting Date and the Period of personal balance sheet

A personal finance sheet should show the total assets, liabilities, as well as the company’s shareholders’ equity on a particular date which we called as the reporting date. Most probably in most of the cases, the reporting date is the final date or day of the reporting period.

On quarterly basis: In case the companies report quarterly, then the reporting date will fall out in the final day of the quarter as follows:

  • Q 1: March 31
  • Q 2: June 30
  • Q 3: September 30 
  • Q 4: December 31

On annual basis: Companies reporting on annual basis mostly have December 31st as their reporting date, but they are free to choose any date in the financial year. 

Step 2: Create a list of your Assets

After analysing the reporting date next step is to list down all the assets you have or the company is holding. For this purpose, you can also categorise the assets based on current and non current assets too or specify them based on your own by category. Some of the assets are as follows:

Classification of assets based on your own by category:

Immediate access

  • Savings account
  • Checking account
  • Non-retirement investments / brokerage account
  • Revocable Trust

Retirement accounts

  • Employer retirement accounts – 401k, 403b, 457
  • IRA – Traditional, Rollover, Roth, SEP
  • Pension / Profit-sharing plan

Accounts for kids

  • 529 plan 
  • Educational IRA
  • Custodial accounts

Business ownership

  • Company stock
  • Ownership stake in your business or another
  • Private equity

Real estate

  • Primary residence
  • Vacation property
  • Investment property

Complicated assets

  • Cash value life insurance
  • Irrevocable trust (if you’re the beneficiary)
  • Inherited IRA
  • Collectibles of value

Classification of assets on basis of current assets and non current assets:

Current Assets:

  • Cash and cash equivalents
  • Short-term marketable securities
  • Accounts receivable
  • Inventory
  • Other current assets

Noncurrent Assets:

  • Long-term marketable securities
  • Property
  • Goodwill
  • Intangible assets
  • Other noncurrent assets

Note: Current and noncurrent assets or all the categories should be totalled by adding them up to get the total assets. 

personal balance sheet example of assets:

Here we have represented personal balance sheet format of assets.

Assets

Amount (in $)

Cash 

4000

Gold coins

5000

Health savings account

20000

Investments

 

IRA

5200

401 K

3900

Robin hood account

4500

Property

 

TX rental property

2500

CA rental property

3500

Honda city

4000

Assets Total 

$ 49,000

Step 3: Make a list of your Debts or liabilities

As, you have listed down all the assets you own similarly you also need to list down all your debts and liabilities. Some of the liabilities, or debts as well as interest rate on some of these debts are as follows, which is depicted under general liabilities and debts and by classifying them as current liabilities and non current liabilities:

Classification as general liabilities and debts:

  • Credit card balances
  • Past due bills
  • Back taxes owed to IRS
  • Auto loan (or future lease payments added up).
  • Federal student loans (stafford, grad plus, parent plus)
  • Private student loans
  • Personal loans payable to a bank or to the financial institution
  • Funded acquisitions (such as furniture, applications, electronics, cell phone)
  • Line of credit
  • Money owed to family or friends
  • Property loans
  • Mortgage
  • Home equity loan
  • HELOC (home equity line of credit)

Classification as current liabilities and non current liabilities:

Current Liabilities

  • Accounts payable
  • Accrued expenses
  • Deferred revenue
  • Commercial paper
  • Current portion of long-term debt
  • Other Current Liabilities

Noncurrent Liabilities

  • Deferred revenue (noncurrent)
  • Long-term lease obligations
  • Long-term debt
  • Other noncurrent liabilities

Personal balance sheet example of Liabilities:

Here we have represented personal balance sheet format of liabilities. 

Liabilities

Amount (in $)

Short term Liabilities

 

Principal loan

4500

TX property mortgage

5500

CA rental property

6500

Long term Liabilities

 

Student loan principal

10,000

TX property mortgage

5800

CA rental property

5200

Liabilities Total 

$ 49,000

Step 4: Calculate Shareholders’ Equity

After noting down all your assets and liabilities now you need to calculate all the Shareholders’ Equity a company or organization has. So, some of the common sections of shareholder’s equity include:

  • Common stock
  • Preferred stock
  • Treasury stock
  • Retained earnings

Step 5: Add Total Liabilities to Total Shareholders’ Equity

Total Shareholders’ Equity is included under the liabilities side of the balance sheet and merged into the total of liabilities. So, we will as Total Shareholders’ Equity to the liabilities. 

Step 6: Compare the Total Liabilities to Total Shareholders’ Equity with Assets total

Now, as we have got all the assets and liabilities information. So, we will equate total assets against total liabilities plus equity. 

  • As, Balance sheet = total assets = total liabilities + equity

Step 7: Examine your balance sheet.

You need to Investigate your balance sheet and check if the total of assets matches total of liabilities. As well as check the financial health of your business or your personal self by using individual personal balance sheet

Sample Personal Balance Sheet 

Here, we have presented a sample personal balance sheet or example of a personal balance sheet depicting Total Liabilities to Total Shareholders’ Equity and total Assets. This balance sheet template also depicts the personal balance sheet format or way to present assets and liabilities in the balance sheet. 

Assets

2020

Current Assets

 

 

Cash

                 11,874 

 

Accounts receivable

 
 

Inventory

 
 

Prepaid expenses

 
 

Short-term investments

 
 

Total current assets

 $              11,874 

Fixed (Long-Term) Assets

 

 

Long-term investments

                   1,208 

 

Property, plant, and equipment

                 15,340 

 

(Less accumulated depreciation)

                  (2,200)

 

Intangible assets

 
 

Total fixed assets

 $              14,348 

Other Assets

 

 

Deferred income tax

 
 

Other

 
 

Total Other Assets

 $                       – 

     

Total Assets

 $           26,222 

     

Liabilities and Owner’s Equity

 

Current Liabilities

 

 

Accounts payable

                   8,060 

 

Short-term loans

 
 

Income taxes payable

                   3,145 

 

Accrued salaries and wages

 
 

Unearned revenue

 
 

Current portion of long-term debt

 
 

Total current liabilities

 $              11,205 

Long-Term Liabilities

 

 

Long-term debt

                   3,450 

 

Deferred income tax

 
 

Other

 
 

Total long-term liabilities

 $                3,450 

Owner’s Equity

 

 

Owner’s investment

                   7,178 

 

Retained earnings

                   4,389 

 

Other

 
 

Total owner’s equity

 $              11,567 

     

Total Liabilities and Owner’s Equity

 $           26,222 

Personal Balance Sheet Excel: 

You can also show the personal finance balance sheet in excel. So, here we represent below the personal balance sheet template excel which shows the total assets with total liabilities and shareholder’s equity.  

A

B

C

Assets

2020

Current Assets

 

 

Cash

                 11,874 

 

Accounts receivable

 
 

Inventory

 
 

Prepaid expenses

 
 

Short term investments

 
 

Total current assets

 $              11,874 

Fixed (Long-Term) Assets

 

 

Long term investments

                   1,208 

 

Property, plant, and equipment

                 15,340 

 

(Less accumulated depreciation)

                  (2,200)

 

Intangible assets

 
 

Total fixed assets

 $              14,348 

Other Assets

 

 

Deferred income tax

 
 

Other

 
 

Total Other Assets

 $                       – 

     

Total Assets

 $           26,222 

     

Liabilities and Owner’s Equity

 

Current Liabilities

 

 

Accounts payable

                   8,060 

 

Short-term loans

 
 

Income taxes payable

                   3,145 

 

Accrued salaries and wages

 
 

Unearned revenue

 
 

Current portion of long-term debt

 
 

Total current liabilities

 $              11,205 

Long-Term Liabilities

 

 

Long-term debt

                   3,450 

 

Deferred income tax

 
 

Other

 
 

Total long-term liabilities

 $                3,450 

Owner’s Equity

 

 

Owner’s investment

                   7,178 

 

Retained earnings

                   4,389 

 

Other

 
 

Total owner’s equity

 $              11,567 

     

Total Liabilities and Owner’s Equity

 $           26,222 

FAQ

How Do You Create A Personal Balance Sheet

For creating a personal balance sheet you need to follow the following steps as:

  • Step 1: Decide the Reporting Date and the Period of personal balance sheet
  • Step 2: Make a list of your Assets
  • Step 3: Make a list of your Debts or liabilities 
  • Step 4: Calculate Shareholders’ Equity
  • Step 5: Add Total Liabilities to Total Shareholders’ Equity
  • Step 6: Compare the Total Liabilities to Total Shareholders’ Equity with Assets total
  • Step 7: Examine your balance sheet.

What Is A Personal Financial Statement Example?

A personal financial statement example includes a balance sheet depicting assets and liabilities as well as shareholder’s equity. 

What Are The Value Of Personal Financial Statements?

The individual’s net worth is depicted in personal financial statements that consists of assets and liabilities as well as shareholder’s equity values. 

What are the 5 types of financial statements?

The 5 types of financial statements include the following as:

  • An Income Statement
  • A Statement of Changes in Equity
  • A Balance Sheet
  • A Statement of Cash Flows and 
  • Notes to Financial Statements.

How Do You List Personal Assets And Liabilities?

You can list your assets as follows: 

Current Assets:

  • Cash and cash equivalents
  • Short-term marketable securities
  • Accounts receivable
  • Inventory
  • Other current assets

Noncurrent Assets:

  • Long-term marketable securities
  • Property
  • Goodwill
  • Intangible assets
  • Other noncurrent assets

And you can list your liabilities as follows:

Current Liabilities:

  • Accounts payable
  • Accrued expenses
  • Deferred revenue
  • Commercial paper
  • Current portion of long-term debt
  • Other Current Liabilities

Noncurrent Liabilities:

  • Deferred revenue (noncurrent)
  • Long-term lease obligations
  • Long-term debt
  • Other noncurrent liabilities

What Are Examples Of Personal Assets?

Some of the examples of personal assets include: 

  • Cash and cash equivalents
  • Property or land
  • certificates of deposit
  • savings accounts
  • money market accounts
  • physical cash
  • Treasury bills

Conclusion

A personal Balance sheet offers a quick view of the financial health of the individual. A personal balance sheet is the same as the normal balance sheet which depicts all of the company’s liabilities as well as shareholder equity from its total assets. So, here in the above article, we have summed up for you the basics steps involved in creating a personal balance sheet as well as excel personal balance sheet template and personal balance sheet examples

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