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February Taking Stock: What do I have and where is it?

February
Taking Stock: What do I have and where is it?

Have you ever felt so overwhelmed with everything financial that you don’t know where to start? And because you don’t know where to start….you just put it off?

This month, I want to help with that overpowering feeling. I want us all to take a look at what we have and where we have it. This process will not only help us get organized, but if for any reason somebody else needs to know about your assets, you’ll have it all lined up and ready to go in a one page format. You can click the link below to download a fillable PDF for you to keep track of your assets and liabilities going forward.

At this point some of you may be thinking, “I don’t have much yet, so it’s sooooo not worth my time to do this.” Well ladies, I have negative assets. That’s right, you heard me correctly…negative! I have an astronomical amount of student loan debt that I am managing (over $200k worth) but I still have bank accounts, a retirement account, investments, life insurance, etc. All things that I need to keep track of every once and a while. Let’s get started. Download the spreadsheet to look at while reading the sections below.

Cash & Cash Equivalents:

This is where you’ll list your bank accounts, certificates of deposit, online savings, change in your couch cushions, and cash in mason jars buried in your backyard. 🙂 The reason these accounts are listed separately than investments is because they’re “liquid” accounts. You can access them whenever you need to without waiting to sell a stock or raise cash. A CD might have penalties if you break it early, but you can still get to it if you need to.

Retirement Accounts:

Yes, ladies, that is a lovely photo I snapped when visiting Cinque Terre in Italy for my 30th birthday in 2017. It’s one of the most beautiful places I’ve ever seen. My retirement goals consist of traveling the world and laying on a beach! Sometimes you need a reminder of why you’re working so hard! That picture you see is my reminder! The retirement accounts section of your balance sheet should show the values of your savings for retirement. Here are some of the most common types of plans (and you may have more than one):

  • 401(k)
  • 403(b)
  • Traditional IRA
  • Roth IRA
  • SEP IRA
  • SIMPLE IRA
  • 457 Plans
  • 414 or 401(a) plans
  • Health Savings Accounts (HSAs)

If you’re not sure what type of plan you have, reach out to your human resources department and they should be able to direct you. If you’d like to review with me, just let me know! We’ll get into more details about the benefits, taxation, and strategies for these types of plans later this year. For now, simply grab the balance and input it into the spreadsheet.

Non-Retirement Investments

These types of accounts are funds that you have invested that aren’t specifically targeted or protected by regulations for retirement. These can be investment accounts that contain stocks, bonds, mutual funds, ETFs, etc. or just holding an individual stock or two. It can be the amounts you contribute to an app that invests for you. It can be an annuity, stock options, 529 plans for your kids, gold coins, firearm collections, stamp collections, cash values of life insurance policies and more.

Real Use Assets

Do you own a home, a car, a boat, or a plane? Okay, I’m likely getting carried away with the plane! Though I won’t deny it would be nice! This section is where you’d record these types of assets. Anything physical you might own. You can try to guesstimate how much your personal property is worth (e.g. contents of your home or apt.) but that can be kind of difficult, so don’t stress about it too much. It might add up quicker than you’d expect, but hey if you were to try to claim that your dog is worth $250,000…..that might be stretching it a bit. Hey, I don’t know about you, but my pooch is priceless! And not a real use asset to boot! She’s more like a money pit! As I tell her every morning, I have to go to work to make the bacon so she can eat it all! But, I digress. Let’s get into liabilities & debt.

Liabilities

Short Term Liabilities would be credit card debt that you carry over a month to month basis. If you pay off your credit card debt every month, do not put anything in this section. Long term liabilities are debts like student loans, auto loans, personal loans, mortgages, and home equity loans.

Life Insurance

The last item on your sheet! Yay! We’re almost done. The last thing to put on your balance sheet is your life insurance. This is not an asset that you will benefit from, but it would be part of your estate if you got hit by a bus yesterday. It’s important to know if you have life insurance and how much you have, because there are several planning strategies you can implement through life insurance. I’ll talk more about that in another blog. Now check carefully, because it’s possible you have life insurance you don’t know about. Maybe your work offers it? Or maybe you signed up for some with an Association that you forgot about? I know mine is with USI Affinity through the New York State Bar Association (mom, are you reading this?! Remember that in case I die!)

See, I have to make my balance sheet right along with the rest of you! And I will use my handy dandy tool found here in order to do so!

Things Not to Put on your Balance Sheet

Though it may seem like you should, there are a few noteworthy things not to put on your balance sheet. They are as follows:

  • Pensions
  • Disability insurance
  • Health insurance
  • Flexible Spending Accounts
  • Future Inheritance
  • Any other streams of income that don’t belong to you

The End

Now that you have the basics of making a balance sheet, let’s spend the rest of February pulling our financial picture together. By the end of the month, you’ll feel much better just by having the overall portrait in front of you instead of a distorted image that feels like you’ll never see straight. After this month, we’ll start tackling some planning ideas for each of these areas, among others. Please reach out to me at lewisk@jgua.com or message the Womansplaining page on Facebook if you have any questions. Have a happy February and I’ll see you in March! Stay sassy ladies!

Your financial wellness tour guide,

Kelly Lewis

 

Download Balance Sheet Template Here

By |2019-07-29T10:09:37-05:00February 10th, 2019|The Blog @JGUA, Womansplaining|