A balance sheet is one of the most valuable tools you can use to organize your assets and debts. It gives you a snapshot of where you stand financially.
For some, building spreadsheets is painful. But it can be fun! A balance sheet shows you how to manage your finances in a satisfying way.
The Power of Organization
In my dad’s Financial Workshop, he teaches that Financial Health begins with knowing your numbers.
Imagine you’re a sailor traveling through dangerous waters—you need to know your destination before you begin.
A balance sheet shows you exactly where you are at financially. It’s a lighthouse that guides you to safe harbor, even in the murkiest seas.
Understanding Financial Altitude
Ultimately, your goal as a Prosperous Soul is to increase your net worth. My dad calls this altitude. The higher your altitude, the more freedom you have to make wise decisions.
The balance sheet is eye-opening because it reconciles your assets with your debt. It shows you just how wealthy you are. For example, if your assets (i.e., cash on hand) are $3,000, and your debts are $2,500, your net worth is only $500. You might feel wealthy because you have cash, but if the creditors come calling, you don’t have much security to fall back on. A balance sheet shows you how much wealth you actually own.
At Prosperous Soul, we see net worth as altitude, a financial lift-off point. Picture it as an airplane gaining altitude from a runway. If your net worth is $5,000, your altitude is 5,000 feet in the air.
Unfortunately, most Americans are stuck in the negative. They’re submarines trapped in the ocean’s depths.
To rise above, these households need to spend years of tackling debt. It’s possible to break free, but it takes time.
Hard Times Build Strong Families
When my wife and I began our Financial Healing journey, our altitude was so negative– eighty thousand dollars—that we were practically next to the Titanic at the bottom of the sea. Only a miracle could break us out.
Thankfully, my dad helped us create a solid debt-elimination plan. We tackled our smallest liabilities first and snowballed that momentum into larger ones. Slowly, our altitude increased.
Then came the fun part. Dad helped us set up a balance sheet in Google Sheets, adding formulas that automatically updated as we paid down our debt and increased savings.
Seeing our numbers improve was so exciting! I marveled at how a balance sheet shows not only where you stand, but also the progress you make. Soon, reviewing our numbers became a morning ritual, right alongside prayer and Scripture.
Sample Balance Sheet
Here’s a sample balance sheet for my wife and I. It shows our altitude—and details our assets and debts.
A balance sheet shows you more than just numbers; it’s a personal guidepost.
I hope our sample inspires you to set up your own spreadsheet and monitor your progress!
Reflections on Our Balance Sheet Journey
The sample reflects our position in December 2023. Today, our debts are down forty thousand dollars. That’s a miracle!
In our case, unexpected windfalls, debt forgiveness, and refinancing helped increase our altitude. Plus, we saved versions of our balance sheet, so we could see our progress over time.
Leaving Room for the Miraculous
God’s grace has been so evident. We couldn’t have erased this much debt without the Lord’s intervention. This reminds me of the verse:
… [The Lord] said to me, “My grace is sufficient for you, for my power is made perfect in weakness.” Therefore I will boast all the more gladly of my weaknesses, so that the power of Christ may rest upon me. For the sake of Christ, then, I am content with weaknesses, insults, hardships, persecutions, and calamities. For when I am weak, then I am strong. — 2 Corinthians 12:9-10 (ESV)
And this one too:
“Come to me, all you who are weary and burdened, and I will give you rest. Take my yoke upon you and learn from me, for I am gentle and humble in heart, and you will find rest for your souls. For my yoke is easy and my burden is light.” — Matthew 11:28-30 (NIV)
My wife and I worked hard for our breakthrough, but God lengthened our strides. Here are just a few miracles that we experienced:
– A $40,000 medical bill, forgiven entirely
– An $11,000 medical debt, reduced by half
– A $10,000 medical expense, erased after a billing mistake
– Support from friends and family that helped chip away at medical costs
– Credit card refinancing that freed us from crippling interest
Altogether, God removed nearly $70,000 from our liabilities—a miracle we’ll never forget. I’m convinced that a balance sheet shows you the path forward, but it’s God’s hand that leads you to success.
PS: If you’re struggling with debt, check out my Dad’s Financial Workshop. It’s a short training that’ll teach you how to eliminate debt, build savings, and increase your net worth.