Personal Balance Sheet or Financial Profile

How many of you know how much money you have?  No matter what your income or lifestyle, you should know what your assets and liabilities are.  It should be one of the first things you do on the road to managing your finances.  

Assets are things you own such as the balance in your bank accounts, money market accounts, investments, life insurance cash value, auto resale value, market value of your house if you own, personal property such as furniture, jewelry etc.

Liabilities are anything you owe such as your mortgage or rent, car payments/loan, credit card debt, education loans, personal loans, medical debts, etc. 

Take a sheet of paper and divide it into two columns.  First you list all your assets on the left side of the paper along with the dollar amounts – add everything to make a TOTAL ASSETS.  Then list all your liabilities along with the dollar amount – add all your liabilities to make a TOTAL LIABILITIES.  Subtract your liabilities from your assets and that will give your your net worth.  If it’s a negative than that means you owe more than you own. 

This link http://www.msnbc.msn.com/id/9745956  has a form that you can enter the figures and it will calculate it for you on-line.  This next link is a Excel template you can download.  http://office.microsoft.com/en-us/templates/TC010175221033.aspx?pid=CT101172761033  This spreadsheet can be customized and will calculate your numbers also. 

By taking this step, you should have a fairly accurate picture of your finances.  Knowing these figures can help determine ways to pay off debt, whether or not you can afford to take a vacation and let you know how well you are managing what God has entrusted you with.

Feel free to leave a comment or question.  I am not a CPA or financial planner but can try to answer your questions to the best of my ability.   Upcoming topics will include tracking your expenses and how to create a budget!  I’m sure most of you would love to have a date night and discuss finances with your spouse!  Please know I am kidding but trust that if you are married and both of you are in agreement with the finances, you will have few arguments over money (which is one of the top reasons cited for divorce).

Until next time…Dana

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