How to Write Balance Sheet Template for an Individuals
Balance sheet template is very important, especially if you are a business owner who manages your business by yourself. It is also useful for the individual who wants to know where their business stands in a certain period. Reading and making a balance sheet also will enrich yourself about the business and its viability, because it informs a lot of things about your business. That is why some investor will reviewing the business balance sheet and others document before they want to invest money.
Balance Sheet For Managing Your Finance
If you are individuals, you need to make this too. It will help you a lot in managing and planning about your spend and investment. Here is some breakdown to write it:
1. Balance Sheet for Personal Asset
There are three different kinds of an asset that you should write in your balance sheet template, they are; fixed asset, floating asset, and intangible asset. If you are concern about your personal net worth, you also can add the fictitious asset, real property, and some floating asset too.
The fixed asset is about your property assets, such as condo, land, real estate or others that you own. The floating asset is an asset which has fluctuating value, such as cash, stocks, or investment in foreign currency. Then the intangible asset is a trademark and licenses that you may own.
2. Find The Net Worth
If you start reviewing all your finance, you need to sum all of your asset and liabilities. Then you need to subtract the sum of your liabilities to the asset. The rest of the number is called by net worth. If you are having negative or zero net worth it means your finances are not good. The good net worth should have a positive number, that is mean you are building your asset.
3. Prepare It For Retirement Day
Housing, meal, transportation, and utilities are the basic spend in your budget sheet. If you want to save some of your money for the retirement day, you need to make the balance sheet with some savings target. It is important to evaluate your liabilities and set the right budget. You can start saving by lowering your lifestyle and cut off some unnecessary cost, such as snacks and others.
4. Pay Attention to The Number of Liabilities and Loans
Liabilities is a list of current debts that you carry nowadays. It could be your monthly housing mortgage payment, money that you owe to bank or your friends, etc. You also can count the loans that you have paid. When you make a balance sheet, the liabilities and loans should be included in the amortized cost. It will be equals to the amount owed on the finance at those time.
5. Don’t Forget About The Equity Value
Nowadays, people might have some stocks in the capital market, even it just a little. So you need to follow the rule of businesses that write their own equity value in the balance sheet. There is two common capital which put in a company. These are contributed to capital or stocks and retained earnings.
By reading this, we hope you understand how to write a Balance Sheet Template for an individual by yourself. Don’t forget to make it carefully so it will show the real result.