How Do I Prepare a Personal Financial Statement?

Mar 26th, 2020

When was the last time you had a “fiscal checkup”?

When it comes to long-term financial planning, preparing a Personal Financial Statement (PFS) is one of the best ways to assess your current situation and keep yourself on track to meet goals.

The PFS is a relatively simple document that lists what you own (assets) and what you owe (liabilities). You can use budgeting apps like Mint to review your assets and liabilities or download our blank FNBN PFS Form.

A financial statement will help you determine your financial plans.

When you are finished, you will have computed your personal net worth. If you already have a PFS, it’s a good idea to update your numbers annually. Compare your results with the previous year’s PFS. This will help determine if you are headed in the right financial direction. Ideally, your net worth will increase over the years as the value of your assets grow and your debts diminish. Your ultimate goal is a positive net worth, which means you have more assets than liabilities.

Why you need a Personal Financial Statement

A fresh PFS can be helpful for your next meeting with your financial advisor. You may also need one for certain personal loans, such as a mortgage. It might also be a good idea to keep a copy of your PFS with your will to help your Executor settle your estate if the need arises.

For small business owners, if you intend to seek a commercial loan, you will most likely need to give the bank a current PFS.

A PFS is helpful during the loan process

Personal Financial Statement Tips

Use the previous year-end balances from your brokerage, retirement, and bank statements.
Ask a local Realtor to estimate your home’s value or calculate the average of the home values provided by sites like Zillow, Trulia, and more.
Be realistic about the value of your possessions, such as artwork, jewelry, antique furniture, collectibles, and more.. Our possessions hold a lot of emotional value for us, so it can be hard to objectively guess their worth. Whether it’s an “antique” china cabinet passed down from your grandmother or your cherished Beanie Baby collection from the ‘90s, use the insured or appraised value. These items may be worth a million dollars to you, but in reality they are only worth what you could get for it at a yard sale or on eBay.
Do not include any rented assets, only real estate and other items you own. An investment property does count because you own it and rent it out to others.
You may also need to prepare an Income Statement, which includes your monthly sources of income and expenses.

The First is your local financial partner in Bucks County

The First has been serving individuals, families, and businesses in Bucks County for more than a century. Today, we are proud to be the longest-running independent bank in Bucks. Partner with us for all of your personal and business banking needs. For help completing your PFS, or questions about your current financial situation and goals, contact our Wealth Management Group. We offer a complete menu of services, including Financial Planning and Investment Management.