A personal financial statement is a layout for your financial freedom. Who doesn’t want to be financially free? Many people think that for it, one has to be good at numbers but, actually it is not the same. A personal financial statement assists you to understand where do you stand financially and what needs to be done to attain the financial freedom. It helps you to develop strategies to pace up faster towards your financial freedom. Personal Financial Statement assists a bank or any credit department to have a clear idea of an individuals’ financial situation in order to sanction the loan or mortgage application by the person.
The personal financial statement consists of two components – income statement and the balance sheet. The income statement shows you the amount of the cash flow in your life and the balance sheet gives you the idea of how much fortune do you have. Income statement is further bifurcated in two parts:-
• Income – It is the cash coming in your life.
• Expenses – It comprises of the cash going out of your life.
Balance sheet, on the other hand, is divided in two parts i.e., assets and liabilities. Assets are the component because of what you grow more income and liabilities are the one that make you spend more.
In brief, it is a tool that makes you understand the difference between your assets and liabilities so that you begin your journey towards the financial freedom. It will allow you to manage your finances more effectively and efficiently. So, if you still don’t have a personal financial statement, go for it today! Contact Smart About My Money by email at support@smartaboutmymoney.com
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