How to Track Your Path to FI in 2026 (Step-by-Step Guide)

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2:11Mindy Jensen:Most people set financial goals without knowing where they stand. Today, we're going to show you how to build a personal financial statement from scratch. Your complete financial snapshot in one place. Net worth, cash flow, assets, liabilities, everything you need to make 2026 your best financial year yet.

2:33Mindy Jensen:Hello, hello, hello, and welcome to the BiggerPockets Money podcast. My name is Mindy Jensen, and with me as always is my spreadsheet nerd co-host, Scott Trench. Mindy opening this show with a statement. That's what I do there, yeah. Well, anyways, as we look into the new year, that's when we start to think about our goals for next year. And today we're going to share one of the resources that we've created here at biggerpocketsmoney.com. This can be found and downloaded for free at biggerpocketsmoney.com slash resources, where we'll be uploading a large number of files over the next year. So just remember that one, biggerpocketsmoney.com slash resources.

3:05We're going to upload a bunch of free stuff there. You don't need to give us your email address to download these. These are just free. We made it intentionally free without requiring an email address because we want these in the hands of more people just to help as many people as possible. But you are, of course, welcome to join our email list anytime on the website. And we specifically invite you to join our 31-Day DIY Personal Finance Challenge, which Mindy drove and created here. I made this particular spreadsheet, but Mindy has driven that 31-Day Financial Planning Challenge. It's awesome.

3:36I have not completed all of it. I look forward to it because it's going to make me better with my money, and I'm supposed to be good at it and host this podcast with her.

3:42Mindy Jensen:Scott, I want to say that day one of the 31-Day Challenge is to fill out your personal financial statement. So if you have already signed up for the challenge, this day is going to be a doozy. However, this is the foundation for the entire challenge. So it's really important that you have all of your numbers all in one spot that you can keep coming back to. If you are signed up for the 31-Day Challenge, you can get a head start by going to biggerpocketsmoney.com slash resources and downloading the personal financial statement so that you can put all of your numbers in place. And then you really only have one tiny task on that first day.

4:21Well, should we talk about personal financial statements?

4:23Mindy Jensen:Yeah, Scott, what kind of information are we asking our listeners to put into this document? Yeah, so a personal financial statement is just a snapshot of where you're at at any given time, right? It should list out your balance sheet, assets and liabilities. That should include everything on your balance sheet. Everything you own that is valuable, or that could be considered part of your network should be included on this. And then it should include your income and expenses. I believe that a good personal financial statement should also include other assets, or at least have a placeholder for them, like, for example, pensions or things that are not as easy to articulate as part of a financial plan, perhaps social security, if you wanted to include that.

5:04Those are factors that are important in financial planning. So this is not a projection model. It's not something that's going to say you're starting here and you're going to end up here. It's just a snapshot of where you are so you can diagnose. And one of the things that I find frustrating about this is there's not a lot of great resources out there that I can find that are free. And so this should not be a complex exercise. This is not a very technical thing. This is a very basic building block of personal finance. And so I just wanted to put a free spreadsheet together. whether you can download this in Microsoft Excel format, or you can open it in Google Sheets.

5:38We'll take you to a link to a place where you can make a copy of it and put your numbers in there. Nobody has to see this except you, but it probably is a good idea if you're going to, for example, meet with the financial planner or begin talking serious about your numbers, that you fill something like this out that provides a starting point for the discussion where some financial information can be looked at.

5:56Mindy Jensen:So Scott, you said this is a simple spreadsheet, and I want to say it's simple, but it's comprehensive. It's not difficult to fill this out, but it is going to take time and it will require you to find all of your financial numbers in order to get a whole snapshot. So I don't want people to think, oh, I'm just going to put in a couple of things and it's going to be done. It's a good document. It's a great document. And how much is it costing them, Scott? Zero dollars. It's free for everyone, regardless whether you are a listener of BiggerPocketsMoney or if you were signed up for the BiggerPocketsMoney newsletter list.

6:31Mindy Jensen:All right, Scott, let's jump into the personal financial statement. Sure. So we're going to go to biggerpocketsmoney.com slash resources. We're going to the resource library and then we're going to go and download the personal financial statement. You can open it and drive or download it. We're going to download it here. Thank you to the 200 people who have already downloaded this before we've talked about it. So that's great. Thank you to those folks. So let's open it up now. And we're going to be greeted with an instructions tab here. And this is just going to give you a quick overview about how to use a document.

7:00It's designed to be as simple as possible to get a reasonable picture of a typical BiggerPocketsMoney listeners financial position. I didn't build, well, I hope anyone and everyone will find this resource if they need it or could use it. This is not like something for somebody who's worth tens or hundreds of millions of dollars, a huge business owner or anything like that. And it's a little bit more complicated, perhaps, than somebody who's broke and just getting started, maybe just has a few debts and no investment accounts will need. This is a little bit more complex than that. The idea is to modify all the inputs here.

7:33I've plugged in a position that I think is typical of an early retiree. So someone at the end of their financial journey here at BiggerPocketsMoney, just to give a sense for where all these inputs can go on each of the tabs here. So you fill these out. And then I have a little kind of nifty feature where if you want to print it, it's all ready to go. As long as you just exclude that first page, it's all formatted and stuff nicely to send to your financial planner. Okay. So let's talk about assets and liabilities. And this is the first reason why I was having trouble with a personal financial statement online.

8:01I feel like most personal financial statement templates do not discriminate between different types of net worth, right? When we are looking to achieve financial independence, we want to treat our primary residence, our cars, our personal property and beneficiary accounts like a 529 or a donor advised fund differently than our stock bond portfolio or rental properties, right? It's so basic and obvious. And yet this does not exist in an easy format, a simple format that I can find online in a robust way. And so that's all this is doing. You just plug in your primary residence, your mortgage, your vehicles, your personal property, and that's associated with them.

8:40And that's how you get your personal property and other assets. Then we talk about your financial portfolio where you plug in your cash, your traditional or Roth or other retirement accounts, your after tax position, and you get an idea of your net liquid financial portfolio. I call your financial, I separated the financial portfolio into two buckets here. The liquid financial portfolio, which you can think of as traditional stocks and bonds. Many people just live in that world in terms of investing their whole lives. And that's great. And then many other BiggerPocketsMoney listeners, for example, will have other types of investments in their position.

9:15For example, like rental properties or businesses that they own or private equity investments or credit or debt funds or those types of things that are less common, but still included in various parts of the portfolio. And I also have this concept of other cash flow, right? Like that might include pensions or social security or these things that don't fit on a balance sheet, but are there, you know, we're going to put a small nominal dollar amount too, so that we can actually discuss them and have them and have them be a part of our portfolio. And there's a place to show where that cash flow coming in on our net worth and liability statement.

9:49So this does not actually sum up to your illiquid financial portfolio here. It is just a showing what the cashflow projections are going to come from, from your illiquid investment portfolio.

9:59Mindy Jensen:And now a quick word from our show sponsors.

10:06Mindy Jensen:Welcome back to the show. Scott, I want to point out that because you have very helpfully pre-populated all of these numbers. If somebody is going to fill this in and an item doesn't fit in, like let's say my instance, crypto, I don't have anything in crypto. Make sure you mark these as zero. Otherwise it's going to change the numbers in a not positive way for you. Well, there's places to add all of that stuff, right? Right. No, I'm saying you have already populated all of this information. So if I say, crypto doesn't apply to me. And then I just skip it instead of taking that 57 ,000 and turning it to a zero.

10:42Mindy Jensen:I think it's really helpful to have all of these numbers pre-populated, but then also make sure you take out anything that doesn't apply. 100%. Yeah. And by the way, over time, Mindy and I plan to invent fake people. For example, like Barb broke at 50, retired at 60, and we will pre-populate versions of this and iterate on them so that they're more practically applicable to that type of person. And so that would be one that in the future you could download at biggerpocketsmoney.com slash deep resources as we populate those to kind of give a view of a certain person's specific situation. And maybe those inputs will save you some time because they'll be closer to your situation than this on the cusp of retirement, Bigger Pockets Money listener that we created here.

11:22The other core component of a personal financial statement is your income and expenses. So this is going to include, this has fields for, you know, imagine a married couple with two jobs, they have a base and a bonus component. Maybe there's a 1099 here or there where they make some sort of side income. Maybe there's a little bit of other income in some category, a rental property, and some investment income. And the idea here was to get all the reasonable sources for investment income or income in a household that is typical to the BiggerPocketsMoney listener set. Obviously, someone with more complex streams of income or different streams of income will have a different view in this, and we should build a different type of personal financial statement or have them modify components of this.

12:03But if your position is fairly normal and includes, generally speaking, these types of income streams. I also put in a little handy tax liability calculator. One of the problems we've been having over the years at BiggerPockets Money here is that the, what is your savings rate? Question seems to stump a lot of people because it's like, well, I max out my 401k and I get my 401k match. And how does that factor into my savings rate? That's pre-tax versus post-tax. Well, it's all dollars you save less all dollars you spend is your savings rate, whether they're pre-tax or post-tax. And so this will help you kind of understand that savings rate about what is your net income, how much do you spend, and how much cash are you accumulating per year net of taxes.

12:44And there's a circularity to this because if you were to, for example, not contribute to your 401k, you will pay more taxes, which will reduce your overall savings rate. And so figuring out that circularity, I think, is really important and planning out the journey to financial independence and seeing how big of a propellant these tax advantage accounts can be is, I think, really powerful. So a little handy tax calculator. This is all for 2025. I will update this for 2026 as we pass into the new year here with new tax tables for all that kind of stuff. So how am I doing here on the income side?

13:14Mindy, any questions about this part?

13:16Mindy Jensen:I think it's pretty straightforward. Again, just if it doesn't apply to you, remove the number that is pre-populated. Awesome. And then on the expense side, I mean, very basic. This is not something that personal financial statements really ever have a challenge with. You can go anywhere on the internet and download a very simple personal financial statement that'll help you do a budget, right? So there's nothing new here. I didn't attempt to be particularly interesting or unique or new with my budgeting here. I just put in some basic assumptions for household spending here and plugged them in in the most common categories here.

13:45So if you're looking for a more robust budgeting tool, for example, this is not it. We're using this as an illustration of one's annual or monthly household spending in the context of really a deeper look at tax planning and where my assets are and how much do I really have in my financial portfolio.

14:03Mindy Jensen:All right, Scott, what's the next tab? OK, next up, I have three tabs here that are optional schedules here for folks that have more complex situations. In some cases, we find that individuals will have a large number of debts. This is probably less common among BiggerPockets money listeners, but it's fairly common among some of the more complex Finance Friday applicants that we've gotten. And for that, in order to determine a strategy to pay off debt, we need to know what your balance on each debt is, what the interest rate is, what the payment is. And in some edge cases, we need to know the age of that debt.

14:36If you have a lot of very old debt, that can change the strategy a little bit in terms of whether to start paying it off now or let it age out of certain statutes. That's what this tab is for. It's just basic input fields. And it's useful for us here at BiggerPocketsMoney as we look to think about certain specific planning situations. Next up is the real estate tab. So this is not a robust software tab. It's just, hey, Mindy and I have talked to a lot of people here at BiggerPocketsMoney who have rental properties, right? Of course, with bigger pockets and the experience we have there, there's going to be an overlap.

15:09And so this is just a place to type in basic information about a rental property that I would need at a basic level to begin the discussion about what ought you to do with this rental property portfolio, right? Looking at these numbers and having a discussion with somebody, I can begin to get a better picture of something and maybe begin to make some high-level recommendations. This is what I would want as a very first glance, very high-level overview, the minimum amount of information to begin thinking about those types of things. So should All right, go ahead, Mindy.

15:35Mindy Jensen:I really like the two columns all the way to the right here, the annoyance factor and the prospects. Because right now, this property might be awesome or might be awful, but you know that it's gonna get better or you really have a good idea that it's gonna get worse for factors that are specific to that property. What's the number one rule of real estate, Scott? Location, location, location. So having this in there can help you, again, Again, get a holistic picture of your rental properties if that applies to you. And again, these are all optional. So if it doesn't, just skip on to the next one.

16:09All right, Mindy. Well, I think this is some good sheet, right? Spreadsheets. All right. Well, we'll be right back with more of that good stuff after this. When's the last time you enjoyed checking your finances? Well, Monarch is trying to change that. Open it up and in a couple of minutes, you know exactly where you stand with your spending, your goals, your net worth, your investments, everything all in one place. And it goes wherever you go. Quick check in on your phone between meetings or check the bigger picture on your laptop on Sunday night. Everything syncs, everything refreshes whenever you want.

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18:01All right. Thanks for sticking with us. Let's get right back into our model conversation. Just to quickly go through this, right? This has basic information around the address of the property. What is it? Is it a duplex? Is it a triplex? Is it a single family home? What does look like, the value of the property, the mortgage balance that is remaining as of today, the equity in the property, it's just a calculation, of course, what its rent is or could be in the immediate future, the mortgage payment estimate for expenses on that property that are non-mortgage, so think CapEx, vacancy management, utilities, all that kind of stuff, and then the estimated cash flow, which is an output or a calculation from that.

18:38And this tells me very basically, how is this property performing from a cash flow perspective? The next two pieces of information that I need that I can't really find anywhere. There's no, there's no software that, that make this really easy. It's just like, is this property a real pain in your rear? Like, do you want to keep this thing? Like, you know, and, and if, if it is, do you believe in it in the future? Like, are you hanging onto this pain in the rear property because you have super high, you know, optimism in the future? And I can just tell with a simple one to three crude scale. Yes.