Sample Personal Financial Statement

Most household budgets are dynamic, constantly changing, and subject to unexpected disruptions and expenses. How do you know your household's financial health at any given point? If you want to see a snapshot of your finances at a particular time or track fluctuations in the value of your assets or level of liabilities and net worth, you should create a personal financial statement.

To help you begin the process, we offer a sample template for a personal financial statement below.

What Is a Personal Financial Statement?

A personal financial statement is a document that gives a detailed picture of your personal finances. It usually has a balance sheet and an income flow section.

This statement has two main components: assets and liabilities. Assets include income, securities, and properties, while liabilities refer to debts, unpaid bills, and overdue taxes.

The Importance of Using Personal Financial Statements

Each time you make a financial statement, you create a snapshot of your financial situation at a particular time. You can use a financial statement to track goals like retirement or pay off debts such as medical bills or personal loans. A personal financial statement can help when applying for a mortgage. You must file a similar document if you need to apply for bankruptcy.

To watch fluctuations in your finances, you may prepare financial statements periodically, such as monthly, and compare statements. You can also use these financial statements to experiment with different budgetary options and to plan for certain possible outcomes.

How To Make a Personal Financial Statement

You can use a standard form to create a personal financial statement. Usually, assets appear on the left and liabilities on the right. Your net worth is on the right side of the statement. Before making a financial statement, gather information on your finances, including:

• Unpaid income taxes
• Latest statement of your loans, such as business loans and car loans
• Personal property with value included
• Any real estate income
• Bank statements for all bank accounts, including checking and savings accounts
• Your investment income, IRA, and retirement funds
• Other financial obligations, such as child support or alimony payments
• Bills with monthly payments for each

Get a copy of your credit report and check for any errors. Checking your report and correcting errors is particularly important if you prepare the statement to apply for a loan from a financial institution. Your lender will likely run your credit report, and you will know where you stand.

Personal Financial Statement Template

The following is an example of a personal financial statement template to help you get started. Add and remove categories as needed for your situation.

How To Fill Out a Personal Financial Statement

After you gather all the relevant information, start listing your assets in the asset section. Make sure to use the current market value of the assets you list. Many calculators are available online to help you estimate resale values. Then, list all your debts in the liability section.

Once you document all asset and liability figures, total both separately. Next, subtract total liabilities from total assets to get your net worth. Certain types of debt, such as a mortgage, are "positive" as long as you consistently make monthly mortgage payments. As you pay your mortgage, you build equity in the property.

Struggling With Too Much Debt?

If your liabilities and debts far outweigh your assets and income, you may need help organizing your finances. You are not alone. In 2023, the average American carried over $100,000 of debt, including mortgages, student loans, and unsecured consumer debts. The total balance of credit card debt grew 17.4% in 2023.

If you struggle to pay, your credit score will suffer long-term damage. Consider contacting a reputable credit counseling agency to learn more about managing your money, setting up a sensible budget, and negotiating with creditors.

You may also consider filing for bankruptcy. Two types of bankruptcy are available for individuals and couples: Chapter 7 and Chapter 13.

Chapter 7 bankruptcy is a liquidation plan. Your qualified assets get sold to pay your debts. The remaining debt is eligible for discharge. You must meet certain income and debt limits or qualify under a means test set out by the bankruptcy court.

Chapter 13 bankruptcy is a reorganization of your debts. You and your creditors negotiate a repayment plan. This payment plan is set for three or five years, after which the bankruptcy court discharges your remaining debts.

Bankruptcy will only discharge unsecured debts. You can't get rid of your child support or alimony obligations. Also, the court often doesn't discharge tax debts, student loans, or certain court fines.

See FindLaw's Debt Relief and What is Bankruptcy? sections for more resources.

How To Use a Personal Financial Statement

Being as honest as possible when calculating your liabilities and income is essential since you can make better decisions with the most accurate information. If your net worth is negative, this doesn't mean you're in financial trouble. Even those with a positive net worth can have some financial problems.

Any personal financial statement may need more context to have meaning. For instance, someone pursuing an advanced degree may be increasing debt while earning very little income, but that educational investment will pay off in a higher salary after graduation.

Your ultimate goal is to regularly increase your assets while controlling your liabilities. Remember that the cost of carrying debt, particularly credit card debt, gets reflected in interest rates, generally higher for those with lower credit scores.

Have More Questions? Contact an Attorney

If you are unsure where to start with your financial or legal issues, talking with a bankruptcy attorney can help you understand your situation. A bankruptcy attorney can review your case, discuss bankruptcy filing and credit counseling, and give you legal advice.