Personal Financial Statement – Why You Should Maintain One

Financial statements are commonly kept for businesses and other ventures, and individuals rarely think to maintain a personal financial statement.  However what many people don’t realize is that a personal financial statement is quite important. Here’s why:

• To become financially stable, you must first have a clear understanding of your financial situation.
  
  
• A personal financial statement will allow you to measure your financial progress and compare your financial moves, both from the past and present.
  
  
• A personal financial statement will increase your odds of financial success.
  
  
• At some point you will be asked to submit one, to a bank, business partners, or other financial institutions.

It is Easy to Maintain a Personal Financial Statement

Most people want to understand their finances, but not many people are willing to take the steps necessary.  After all, finances are boring, frustrating and often stressful – but with a personal financial statement, they don’t have to be!

Imagine being in charge of your finances, and the strength and independence that will bring. The good news is that constructing and keeping a personal financial statement is not difficult. A personal financial statement, which takes only a short time to complete, is also easy to maintain.

Don’t let your finances and debts take control of your life.  With a personal financial statement, you can get that control back; learn about what works and what doesn’t work, ensuring you won’t make the same mistakes twice. After all, learning to budget, spend wisely and save is all about trial and error.

How to Create a Personal Financial Statement

You can make a comprehensive, personal financial statement by using a good personal financial statement software program or spreadsheet:

• Your summary sheet will show what you own and what you owe. This will be separated into two separate columns and called “assets” and “liabilities.” Once you have completed these sections, you can easily see the difference between your assets and liabilities to find your net worth. A personal financial statement is a great tool for gaining a glimpse into your financial picture at any given time.  You may be surprised as to how much you are worth.
  
  
• Your income sheet details all of your income, as well as all of your expenses. For many people, then act of creating an income sheet is a dramatic eye-opener, as few people take the time to really understand just how much money they are spending every month. Once you have separated your income and your expenses into two categories, you can find the difference between the two to determine your net income.

Your personal financial statement should be easy to complete with the help of a good financial statement software program. These types of programs can be purchased at a very modest price.

The key to a successful personal financial statement is to keep it updated regularly. After all, a personal financial statement won’t be beneficial if you don’t keep track of it regularly. A personal financial statement is more than a financial tool; it is a learning tool that will allow you stay on top of your finances so you can enjoy financial success

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