What’s a P&L?
What it is...
A profit and loss statement, sometimes called an “income” statement, is a financial document that shows the revenue, costs, and expenses incurred by a business during a specific period of time. It gives you a snapshot of the business's financial performance and helps you assess your profitability.
Why do you need one?
Sure, P&Ls are usually for a business, but don’t you want to know your financial performance, too? Wouldn’t you want a snapshot of how your money’s doing?
Use this P&L to track:
- The source & performance of all your income streams
- All your expenses
- Your monthly savings rate
It’s important to track these numbers to make sure you’re on target to hit your financial goals – whether that’s buying a house, saving for retirement, or… buying a business 😉.
Just like a biz, we want to increase revenue & reduce our expenses = increase our profitability.
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Want to take your P&L to the next level?
If you want to get super sophisticated, you can utilize tools like these:
- Tier 1: Monarch Money
- We would recommend Mint, but now that it’s no longer available, there are plenty of other options out there that will help you build a budget quickly. Perfect for relatively non-complex personal balance sheets. It syncs all of your investments, assets, properties, bank accounts, credit cards, etc. Mint is best for budgeting.
- Tier 2: Personal Capital
- This site can aggregate all your investments and help you analyze and adjust your investment strategy. Personal Capital offers a 401(k) fee analyzer to help you determine which funds in your retirement account are the most costly and offers strategies to help you lower your fees there as well as your banking fees.