How to take stock of our finances

Take stock of our finances

A balance sheet is an exercise that reflects the asset situation at a specific time. This financial analysis is essential to measure the performance of our income as well as knowing how we are managing our wealth.

To make a balance sheet we need to take into account two major components of our economy: assets and liabilities.

How to take stock of our finances
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The balance sheet is calculated by subtracting what you have from what you owe.

What are the assets?

The term active refers to all goods and resources that can be traded. Assets represent the value of our money. We can divide them into:

Real Estate and Automobiles. In this section we can include not only the house and the own car but also the commercial premises and lands of which we are owners.

Home and/or office supplies. In this category we include furniture, appliances and other similar objects.

Investments. Money that is in the bank or in some financial instrument that provides returns.

Valuable items. Here we write down goods such as jewellery and pieces of art.

Salary. Finally, we must take into account the average of what we earn each month, since it constitutes the most immediate of our assets.

What are the liabilities?

These are all the commitments that we have not yet settled, among the most frequent we have:

Mortgage. It’s the amount of the mortgage loan. This liability is the amount we must pay for our home.

Credit card(s). The debt acquired (only the balance) by payments made with the credit card should be considered as liabilities as well as loans taken from family or friends.

Current expenditure. In contrast to the salary, we must take into account the expenses that we have month by month (averaged over the year) for food, clothing and / or rent.


To make a balance of personal finances we must develop a list of the amounts of our assets and liabilities, subtract the second from the first and get a percentage. In other words, we calculate how much of what we have is what we owe.

It is best to have liabilities in the range of 30 to 50 percent of our assets. A personal balance must be made at least once a year.

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