Why You Should
Create a Personal Financial Statement
Plus Learn How Easy it is to Complete
A lot of moms will cringe at the suggestion to create a personal financial statement. You could have your accountant or bookkeeper complete these statements for you if you want. But completing a financial statement isn't as hard as you might think!
Personal Financial Statement Form
Here's a couple of links providing you with a Personal Financial Statement Form to make the job easier. The first one is for excel or open office:
Excel Personal Financial Statement Form.
or a
Notepad Version.
Why Should You Create A Personal Financial Statement
According to Robert Kiyosaki, rich people are “financially literate”. He believes financial literacy should be taught in schools. That way we wouldn’t have so many people in
credit card debt.
When starting your business plan, you will want to attach a copy of your personal financial statement. If you're looking for financing or investors, you will be required to. Completing your financial statement from time to time is actually a good idea. You have money come in and you have money going out. You have things that you own and things that you owe. Makes sense to know if you're making progress with your finances. What's working, what's not.
What to Include
Your personal financial statement consists of two parts. The balance sheet and an income statement. The balance sheet contains what you own, what you owe, and what your worth. The difference is your net worth. The income statement contains what you made, and what you spent. Your personal financial statement should only include your personally held assets and liabilities or debts on a specific date. Do not include any business assets or liabilities. Be sure to sign and date to authenticate. If you have never completed one before, you will need to get your financial information together.
Balance Sheet
This section includes your assets:
Cash
Certificates of Deposit
Stocks and Bonds
Life Insurance Value
Auto's, Boats, RV's
Home value
Home Contents
Jewelry
Other Assets
Your Liabilities:
Mortgage
Credit Cards
Loans
Other Liabilities
Total Liabilities
Income Statement
This section states your source of income minus your expenses which leaves your net income:Income:
Salary
Passive Income
Rental Income
Other Income
Total Income
Expenses:
mortgage
utilities
debt
food
clothing
Total expenses
Net Income: what's left over
Moms-Work-from-Home-Tips
Completing your financial statement from time to time is actually a good idea. You statements should answer these questions: - Did you make enough income to cover your expenses?
- Are you growing your passive and/or residual income?
- What are you spending money on? Where can you try to reduce/increase any of area?
- Am I taking on good debt (income producing) instead of bad debt?(increases your expenses)
- Is you net worth increasing?
Have you achieved financial freedom yet?
The Next Section
Now you know how to create a personal financial statement. The next section of your Business Action Plan to complete is the
Start Up Costs.
How to get an accurate figure...
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