Making a Financial Inventory and Balance Sheet

Updated July 28, 2007

A financial inventory is simply a list of what you have and where you have it. A financial inventory is especially important to have you happen to die or are unable to handle your financial affairs, providing your survivors or those who will need to take care of you all the information they will need to take on your estate.

A balance sheet is a financial record that allows you to figure out your net worth.

You should update your financial inventory and balance sheet whenever you open a new account, close an account, take out a new insurance policy, change advisers, etc. Even if you don't make such major changes, you should still update your financial inventory at least once per year to make sure that everything is up to date and that values are current. (January 1st is an excellent day to update your records and start off the new year with a fresh perspective of your financial situation.)

It does take a bit of time to get all the information required for your financial inventory and balance sheet together, but the process is simple, and it's a necessary starting point for any financial planning.

1. List all of your advisors If you have an attorney, an accountant, a financial planner, etc. you need to write down their name, company, contact information, and a brief description of what they do for you. It's also a good idea to list people that are in positions to handle or make changes to your accounts, such as anyone with a power of attorney, the contact people in your HR or payroll department at work, etc.
2. List all of your assets Indicate what type of asset it is, where it is held (even if it's just held in your cookie jar), account information, and contact information for the individual or institution where you hold the account and/or property locations. Assets include items like:
   • Cash
   • Checking account
   • Savings account
   • Money market accounts
   • CD's
   • Bonds
   • Stocks
   • Mutual funds
   • Retirement accounts / pensions
   • Insurance plans (current cash value)
   • Property (current worth)
   • Collectibles (current worth)
3. List all of your liabilities Indicate what type of liability it is, who you owe, account information, contact information for the individual or institution holding the account, and payoff dates and amounts. Liabilities include items like:
   • Mortgages
   • Automobile loans
   • Student loans
   • Consumer loans
   • Personal loans
   • Credit card debt
4. Calculate your net worth. Add up all of your assets to get your total assets value. Then add up all of your liabilities to get your total liabilities value. Now just subtract your total liabilities from your total assets. This is your net worth.