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Your Balance Sheet

Another financial statement that you can develop to determine your financial status is the Balance Sheet.   As stated above, the Balance Sheet shows your total assets, minus total debt to determine your equity.  See worksheet below.

Balance Statement Worksheet

Savings (A) $_______________
Checking (B) $_______________
Stock (C) $_______________
401K (D) $_______________
IRA (E) $_______________
House (F) $_______________
Auto(s) (G) $_______________
Other (H) $_______________
Total Assets $_______________

House (I) $_______________
Auto (J) $_______________
Credit card, cash advance (K) $_______________
Other liabilities (L) $_______________
Total debt $_______________

Cash + stocks equity (A+B+C) $_______________
Retirement equity (D+E) $_______________
House equity (F-I) $_______________
Auto equity (G-J) $_______________
Other equity (H-L) $_______________
Total equity $_______________

If your equity is negative, you are broke.  This means if you liquidated all your assets, and paid off all your debts, you won’t have enough money because you have more liabilities than assets. For many people in debt, their credit card debt may make up a big portion of their debt.  You can download the above worksheet and enter the numbers to determine your Total equity.   If your equity is positive that is good, but is it positive by an amount you are happy with?  If you have a positive equity of $1,000, this is terrible especially if you are approaching retirement.

To improve your equity, you must dig yourself out of debt by creating a positive cash flow.  In time, the balance sheet will be taken care of.


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