The start of a new year is an excellent time for a “fiscal checkup.” Begin by preparing a personal financial statement (PFS). The PFS is a relatively simple document that lists what you own (assets) and what you owe (liabilities). 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.
Why you need a Personal Financial Statement
A fresh PFS can be helpful for your next meeting with your financial advisor. Meanwhile, if you own a small business and intend to seek a commercial loan, you will most likely need to give the bank a current PFS. 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.
Personal Financial Statement Tips
Use the 2013 year-end balances from your brokerage and bank statements. Ask a local Realtor for their estimate of your home’s value or search the Internet for recent sales of similar homes in your neighborhood. If you have artwork, jewelry, collectibles, etc., be realistic. Use the insured or appraised value. Your cherished Beany Baby collection might be worth a million dollars to you, but it’s only worth what you could get for it at a yard sale or on Ebay.
Download a free, blank PFS form from The First at:
If you have any questions about filling out the form, contact me or any Branch Manager at The First.
Bill Sheffer, VP of Business Development
215-860-2643 ext. 3108
