How to Write a Balance Sheet

Step-by-Step Guide

1. 1

   Step 1: Choose a date for your balance sheet.

   Businesses are required to report their balance sheets on a certain date or dates each year.
   
   As an individual, however, you have much more freedom to choose your own date.
   
   Just be sure that the amounts that you gather for your debts and assets are all from the same date.
   
   List this date at the top of your balance sheet to remind you and also so that you can refer back to your balance sheet later.
   
   For regularity, you may choose to do a balance sheet at the end of the calendar year or twice per year at a set date.
   
   This will allow you to follow your net worth growth year-by-year.
2. 2

   Step 2: Assemble your financial information.

   You will need records of your assets as well as your debt.
   
   Make sure you have your latest bank statements, the balance on any loans that you owe, and the current market value of your investments.
   
   You will also need to approximate the resale value of any valuable assets that you own, including your home, cars, and any valuable jewelry or household items.In general, list any valuable items that you own for which you could find a buyer and what that buyer might pay for the item.
   
   This can be determined by researching recent sales of similar items and noting the sale price.
   
   This is called the market value.In some cases, you may need to get a certified appraisal of larger, more valuable assets. , Unlike business balance sheets, which follow a preset formula, a personal balance sheet can follow any type of organization.
   
   In general though, it's a good idea to start by organizing your spreadsheet or paper into two rows or columns, one for assets and one for liabilities (debts).
   
   You can either do this by hand or use a spreadsheet program on the computer.
   
   There are also pre-made templates and editable online files that can be used to create a personal balance sheet.Try searching Google for "personal balance sheet template" and several options will show up.
   
   When judging the size of your balance sheet, know that your assets and liabilities will be listed by category and not by individual item.
   
   So if you have a large amount of valuable household items, know that these will be combined and listed as one line item on your balance sheet.
   
   Generally, a balance sheet should be no longer than one page. , In the first column or row, list your asset categories and their values.
   
   These include both financial assets as well as "hard" assets like cars and valuables.
   
   Listing these assets may require other tables in which you can sum the individual assets in each category.
   
   For example, if you have more than one car, you would combine the market value of your cars and list this on the balance sheet simply as "cars." The sum of these assets is your total assets.
   
   Include the following assets when making your balance sheet:
   Cash and account values in the bank (including checking, savings, money market, and certificate of deposit accounts) Investments (including stocks, real estate, mutual funds, college savings accounts) Any money owed to you (like a personal loan to a friend) Resale value of your home(s) Resale value of your vehicle(s) Resale value of personal property (such as jewelry and furniture) , In the second column or row, list your liabilities as well as their value.
   
   These refer to any debts that you owe.
   
   Specifically, liabilities can include:
   Student loans Auto loans (what you currently owe) Credit card debt (this includes debt currently incurred even if you plan to pay it off at the end of your statement month) Mortgage balance The balance of any other personal loans Outstanding bill balances (unpaid bills from this month) Taxes due or estimated taxes due next year (for this tax year) , To get an accurate picture of your net worth, start by totaling your columns or rows at the bottom of the balance sheet to get total assets and total liabilities.
   
   At this point, check to see that you haven't omitted anything from either category. , This will give you your net worth.
   
   This represents the total value of everything that you actually own.
   
   Your net worth will go up as your assets increase and your liabilities decrease.
   
   Use your balance sheet to budget your finances and achieve a higher net worth.Keep your balance sheet updated to track your progress towards your financial goals.
   
   Try to recalculate at least twice a year.
   
   This will help you see the big picture, so to speak.
3. 3

   Step 3: Set up your balance sheet.

4. 4

   Step 4: List your assets.

5. 5

   Step 5: List your liabilities.

6. 6

   Step 6: Total your assets and liabilities.

7. 7

   Step 7: Subtract your total liabilities from your total assets.

Detailed Guide

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