How to Create a Personal Balance Sheet and Examples

To create a personal balance sheet, gather all your financial documents, list your assets and liabilities, then calculate your net worth.

If you’ve ever felt like your finances are a source of constant anxiety, you’re not alone. Money is a leading cause of stress for nearly half of U.S. adults, according to a 2024 Bankrate survey.

But what if part of that stress isn’t just about the amount of money you have, but rather, the uncertainty about where you stand financially?

Without a clear understanding of your financial situation, it can feel impossible to plan for the future or make informed decisions.

Whether you’re facing debt, unsure if your savings are enough, or just want to get a better handle on your overall financial health, a personal balance sheet can be a powerful tool to help you gain control and clarity.

It provides a snapshot of what you own and what you owe, offering a clear view of your financial position. In this article, we’ll guide you through creating your own personal balance sheet, helping you reduce the stress that comes with financial uncertainty.

What is a Personal Balance Sheet?

A personal balance sheet is essentially a snapshot of your financial situation at a specific point in time. It lists everything you own (your assets) and everything you owe (your liabilities). Your net worth is determined by taking your total assets and subtracting your liabilities. These three elements—assets, liabilities, and net worth—form the core components of a personal balance sheet.

How to Create a Personal Balance Sheet for Beginners

To start making a personal balance sheet, choose which app is easiest for you to use. You can use Excel, Google Sheets, or the Numbers app. Once you’ve chosen the app you want to work with, follow these four simple steps, and you’ll have a clear picture of your finances in no time.

1. Gather your financial documents.

Before you start, you’ll need to gather all your financial documents. This includes:

• Bank statements: For checking, savings, and any other accounts where you keep money.
• Investment statements: For accounts like 401(k)s, IRAs, stocks, bonds, or mutual funds.
• Loan documents: Mortgage, car loans, student loans, and any other debts you owe.
• Credit card statements: To get a current picture of your outstanding credit card balances.
• Property appraisals: If you own a home or other valuable assets like a car, jewelry, or collectibles.

Having all this information in one place and up-to-date will make it easier to complete your balance sheet accurately. For a simpler way to organize your bills and Buy Now Pay Later payments, use Cushion. This handy app helps you manage your finances by giving you a clear, real-time view of your bills. Plus, you can easily sync everything with your Google Calendar, so you’re always on top of your payments.

2. List your assets.

Now that you have all your documents, start by listing your assets. Assets are everything you own that has value. Categorize them according to the following:

• Cash and cash equivalents: Write down the balance from each of your checking and savings accounts. For example, if you have $2,000 in your checking account and $5,000 in savings, list those amounts.
• Investments: Include the current value of your investments, such as your 401(k), IRA, or any stocks and bonds. For example, if your 401(k) is worth $14,933 and you have $5,000 in stocks, include these figures.
• Real estate: Make a reasonable estimate of your home’s value and add it to your list of assets. If your home is worth $250,000, include this figure in your list.
• Personal property: Estimate the value of big-ticket items like your car, jewelry, art, or any other valuable collectibles. If your car is estimated to be worth $10,000, ensure that this amount is included on your list.
• Other assets: Don’t forget about life insurance policies with a cash value or any business interests you might have. For example, if your life insurance policy has a cash value of $20,000, it should be added to your list of assets.

Add up the total value of all your assets to get your Total Assets amount. Here’s what it may look like on an Excel sheet:

3. List your liabilities.

Next, it’s time to list your liabilities, which are the debts you owe. You can categorize them this way:

• Mortgages: If you have a mortgage, write down the outstanding balance. For example, if you still owe $180,000 on your home, list this as a liability.
• Car loans: Write down the amount you still owe on your car loan. For example, if you owe $8,000, include this.
• Credit card debt: Include any outstanding balances on your credit cards. If you owe $3,000, list it.
• Student loans: If you have student loans, list the total amount you owe. For example, if you have $25,000 in student loans, this should be noted.
• Other liabilities: Don’t forget about other debts like personal loans or unpaid medical bills. For example, if you have $2,000 in unpaid medical bills, include this.

Add up all your liabilities to get your Total Liabilities amount. Here’s what it may look like on an Excel sheet:

4. Calculate your net worth.

Once you’ve listed all your assets and liabilities, calculate your net worth by deducting your total liabilities from your total assets.

Following the examples above, if your total assets amount to $306,933 and your total liabilities are $218,000, your net worth would be $88,933. This figure gives you a snapshot of your financial health.

What does this number mean? If your net worth is positive, it means you own more than you owe. If it’s negative, it means you owe more than you own, which can be a sign that you need to work on paying down debt.

The table below displays the average net worth by age. With these data, you can compare your financial position with others in your age group:

If your net worth is below average for your age, don’t worry—there are simple steps you can take to boost it. Start by saving more and paying down debt. You can also look for ways to increase your income, like picking up a side job or doing freelance work. Investing in growth assets like stocks, mutual funds, or real estate can also help. By making these small changes, you can steadily improve your financial situation and move closer to your goals.

To get you started, here’s a sample balance sheet for you to try, copy, and download:

Sample Personal Balance Sheet

Why Have a Personal Balance Sheet?

A personal balance sheet isn’t just a document—it’s a tool that can help you improve your financial health in several ways:

• Identify high-interest liabilities: One of the immediate advantages of a personal balance sheet is that it helps you identify which liabilities carry the highest interest rates. Focusing on paying down these debts first can help you save money on interest payments and improve your net worth over time.
• Adjust your budget and savings: A personal balance sheet allows you to see the bigger picture of your finances. If you find that your liabilities are too high compared to your assets, you might need to adjust your budget. This could mean cutting back on unnecessary expenses or increasing your savings rate to improve your financial standing.
• Track your financial progress: By regularly updating your balance sheet—ideally, once a year—you can track and evaluate your financial progress. Is your net worth growing? Are you reducing your liabilities? This practice helps you stay on top of your financial goals.
• Make informed decisions: Having a clear understanding of your assets and liabilities empowers you to make better financial decisions. Whether it’s deciding to take on new debt, invest in a new opportunity, or simply save more, your personal balance sheet serves as a valuable guide.
• Plan for major life events: Whether you’re buying a home, saving for retirement, or preparing for your child’s education, a personal balance sheet provides a clear picture of where you stand financially. This makes it easier to plan for major life events, ensuring you have the necessary resources when the time comes.

Summary

This week, why don’t you set aside an hour to list your assets and liabilities in a simple spreadsheet. Creating a personal balance sheet is a crucial step toward taking control of your finances. It’s not just for the wealthy or financial experts—anyone can and should create one. By following the steps outlined in this guide, you’ll gain a clear picture of your financial situation, empowering you to make better decisions, plan for the future, and achieve your financial goals.