Josh Lance

You, Incorporated

Every quarter and on a yearly basis, publicly traded companies release a set of financial statements to their shareholders.  These statements provide information to show the company’s current financial condition, how it performed in during the past period and how cash was used or sourced during that period.  These statements provide a clear basis to determine how the company is doing financially.  The same concept can apply for individuals as well.  If you were to put together a set of financial statements about your personal finances, what would those statements say?   We may not think of ourselves as little individual companies, but our understanding of our personal finances may be clearer if we do.  So, how do you put together the financial statements of You, Incorporated?

A company has two main financial statements.  The first is the balance sheet.  The balance sheet shows the current financial position of the company by listing its assets, liabilities, and shareholders’ equity.  For You, Incorporated, it would look something like this:


Cash (checking accounts, savings accounts, money market accounts, certificates of deposit)

Investments ( brokerage accounts, IRAs, 401ks, stocks, etc.)

Real Estate (personal home, vacation home, etc.)

Personal Property (car, boat, etc.)

Other Assets ( loans made to others, valuables, etc.)


Mortgage Debt

Credit Card Debt

Personal Property Debt

Student Loan Debt

Other Debt

Net Worth (Assets minus liabilities)

If you put your personal finances into this balance sheet, what would it say?  Would your net worth equal the total of your assets or would you find yourself with a negative net worth (meaning that your liabilities exceed your assets)?  Putting your personal finances into a balance sheet can give you a good snapshot on where you stand.

The second main financial statement is the income statement.  The income statement lists out the revenues earned and the expenses incurred during the period.    For You, Incorporated, it would look something like this:


Income from employment

Interest and dividend income

Gains or Losses on sales of assets

Other income (garage sales, side job, etc.)


Rent/Mortgage Payment

Food and Groceries


Automobile expenses



Personal Goods/Clothing

Repairs and maintenance

Gifts and Donations

Children expenses

Personal care/health

Interest expense


Net Income(Loss)

What would your income statement look like?  Would you have net income or net loss?   The income statement is very similar to setting up a budget.

While it may seem strange to look at your personal finances like a company, it can help you identify where you stand and how you have been doing financially in order for you to better plan and make adjustments in the future.    Being able to plan appropriately for the future can help you make better decisions regarding your finances.  The next blog entry in this series will look at doing just that by budgeting effectively.

About Josh Lance

A licensed certified public accountant (IL) and Chartered Global Management Accountant, Josh is also a family man who calls Chicago home.  Before venturing on his own with a mission to help small businesses, Josh spent his early career at a top-10 national public accounting firm before working at an ultra high net worth family office.  Josh is also an adjunct professor at Northwestern University in Evanston, IL.  He enjoys making wine at home, cooking, traveling, and cheering on his favorite football and soccer teams. Josh was honored by being selected to the 2017 class of the AICPA Leadership Academy and was named as one of the 40 under 40 in 2017 by CPA Practice Advisor.