Quarterly Financial Statements

Not too long ago, I decided to start producing quarterly financial statements. I was approaching retirement and had a couple reasons for wanting to produce quarterly statements. First, I wanted to be able to ascertain our progress towards our income goal. I included separate lines for earned income and investment income, so that it would be apparent when our investment income adequately covered our spending needs. I also separated how much we spent on a regular basis and how much we paid in interest costs. I included our short-term and long-term assets and liabilities to show our net worth and see what was contributing to its increase or decrease.

Despite working as a financial advisor, I have never followed a budget. I’ve spent so long spending a similar amount of money each month, that I don’t really have to worry about straying too far from our usual spending amount. It’s helpful to me to look back and see how much we actually spent in the recent past. I can compare that to how much I’ve earned to see the change in cash position, whether we’re moving closer to or farther from our goals. When paying down debt, it’s easy to miss the progress because the cash is all being used. However, it’s easier to make wise decisions when the parameters are clear. For example, while the stock market was low over the last couple weeks, I planned to sell some stock where the price was high, and buy stock where the price was low. I bought, but didn’t end up selling, instead using margin. I can now see how that affected my debt level and interest cost.

I also have columns for the current quarter and the prior quarter, as well as year-to-date. In this way I can easily spot variations and find the cause, if necessary. Over the last three months, I have had far less earned income than the prior three months (working far fewer hours), but I have much more investment income. I can also easily see that my investment income covered 110% of the amount we spent over those three months, including interest costs.

Creating the financial statements takes very little time. I review all the transactions from my bank account (most of the purchases are on the credit card, so there aren’t too many line items) and separate out flow-through funds, such as government benefits that go straight into the RESP. With what’s left, I add up the spending, interest costs and deposits and enter them into my spreadsheet. I then log on to my brokerage accounts and look at the investment total, RESP total (since it’s earmarked for the kids, not my use) and the total investment total.  Here’s the template for the Income Statement:


  • Earned income
  • Investment income (ex-RESP)
  • Subtotal


  • Credit Card
  • Bank Account
  • Subtotal

Taxes (estimate)
Change in Cash

Here’s the template for the Balance Sheet:


-Liquid Assets

  • Cash
  • Securities
  • RESP
  • Subtotal

-Fixed Assets

  • Vehicle
  • House
  • Subtotal



-Current Liabilities

  • Credit card balance
  • Margin
  • Investment loan
  • Subtotal

-Long-term Liabilities

  • Mortgage
  • Subtotal


Net Worth

I highly recommend everyone produce quarterly financial statements. It helps to have a much clearer view of my financial situation, which in turn helps me to make better decisions. It also uncovers areas that require attention. It’s relatively little work, but four times a year is probably sufficient, while not distracting from the long-term view.