How to Prepare a Personal Finance Statement

When you are interested in borrowing money, many lenders will ask you to fill out a personal financial statement. It's a snapshot of your assets and liabilities as well as the way you handle your income. From this information, the lender will be able to determine whether you will be able to repay a loan. And the more difficult that is, the higher the lender will set your interest rate, presuming he is inclined to offer you a loan.

Instructions

1

Prepare a list of the things that you own. Start by looking at your banking statements and noting the balance of all accounts. Write down the name and address of the banks as well as your account numbers. Next, if you own a home and any vehicles, think about how much they might be worth. If you own life insurance, you will need to include in your statement the so-called "cash surrender value," the amount that you would get if you were to cash in your policies. It you are saving for retirement, whether in an IRA or a 4010(k), you should include the current value of those accounts, as well as company addresses and account numbers. Finally, you should note any other investments or assets you may own -- such as boats, jewelry and antiques -- and figure out how much they are worth.

2

Turn to your debts. Start out by listing your credit card balances, as well as the name of the cards and the account numbers, Next, make a note of how much you owe on your home and the monthly payment. If you have other loans, such as personal loans, second mortgages and auto loans, note the outstanding balances as well as the amount you are paying each month. And if you have other liabilities such as child support and alimony, they should be listed as well. To verify these debts, as well as to determine your creditworthiness, most lenders will contact one or all of the three credit bureaus for a credit report.

3

Prepare a list of income and expenses. First, make a note of all your sources of income such as how much you earn for your job, dividends from investments, and income earned on your savings account. If you are the beneficiary of a trust fund, note the amount of income you receive and the amount of the principal you can withdraw. Finally, list all of the payments you make during a typical month. Your bank statements are a good place to look for these payments.

4

For further help with your personal financial statement, download a generic form from a number of websites. See examples in Additional Resources below.