What Is a Personal Profit and Loss Statement?

A personal profit and loss statement records your income and expenses for the month.
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A personal profit or loss statement is similar to a business profit and loss statement, except you’re accounting for the monthly income and expenses of your household. When you think about it, your household really is run like a business. You have money coming in, expenses going out, and an ongoing list of duties to manage. Most businesses create profit and loss statements on a regular basis to get a picture of past financial performance as well as to create budgets. When you use a profit & loss statement, you might realize better – and easier -- personal financial management.


Income on your personal profit and loss statement might be derived from many sources. Most folks identify money from a job or self-employment as income, but other types of income count too. If you have earnings from dividends or interest, alimony, child support or unemployment, you’ll want to include the amounts on your personal profit and loss statement. Essentially, any money you receive should appear, even if the money isn’t taxable. When you make income entries to your statement, use net amounts. The net amount is the income you actually have available for expenses -- the amount after taxes and other deductions are subtracted.

Variable Expenses

Expenses on your personal profit and loss statement are viewed in two different categories, variable and fixed. Variable expenses change each month, such as utility bills, vehicle gas and groceries. Your personal profit and loss statement should show the actual amount of variable expenses each month. You can use your actual figures to create budgets later by averaging your past expenses from this category.

Fixed Expenses

In contrast to variable expenses, fixed expenses stay the same each month. Your rent or mortgage, insurance and car payment are examples of fixed expenses. You know how much these bills cost each month before you receive your billing statement. Your personal profit and loss statement should reflect your fixed expenses in the month you pay the bill, but budgeting expenses in this category is a bit easier than it is for variable expenses because you don’t have to estimate the cost.

Assets and Liabilities

The equity in your assets and the balances of your liabilities don’t appear on your personal profit and loss statement, but it’s a good idea to keep track of these items. To begin, you ‘ll need to list all your assets, such as your home, cars and retirement accounts and the fair market value of each. If you owe money on either asset, write down your balance. Each time you make a payment on the note, adjust the balance to reflect your current debt. You might have other liabilities, such as credit card debt and other loans. List the balance for these debts and subtract payments you make. If you keep up this system, you’ll always know how where your debt stands. You might have room to budget extra money to pay off the amounts quicker, and you’ll have quick access to your asset and liability records.

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