Personal Finacial Statements And Personal Balance Sheets
Personal Balance Sheet
A record of assets and liabilities at a position in time. Shows net worth.
Per. Balance Sheet
Measures strength and progress of an individual or business.
Net Pay
Money you get after taxes and other deductions.
Allocated Spending
Most Important of all budget forms- Day to day, week to week planning- taken from the cash flow plan.
Personal Possessions
Not Liquid assets, material Ex. Furniture, car, antiques, jewelry, etc....
Savings Account
Not cash flow Interest from, yes
Long Term Liabilities (CF)
Not on Cash Flow Statement; short term are.
Real Estate
Property, house, rental property.
Personal Cash Flow Statement
Reports net wages and other income along with spending for a period of time.
Investment Assets
401k (retirement plan), mutual fund, stocks, IRA, etc...
IRA
An investment asset, stands for Individual Retirement Account.
Liquid Assets
Assets that can be turned into cash immediately without loosing value. Ex. Cash, saving account, checking account, CD.
Three Main Categories of a Personal Balance Sheet
Assets, Liabilities, Net Worth
How to Best Use Money
Careful Planning Careful Saving Careful Spending
Income-Expenses=
Cash Flow
Income
Cash Inflow
Expenses
Cash out flow
CD
Certificate of Deposit- Money you give to the bank that earns interest. (Somewhat liquid, looses some value after taking before time is up)
Know Your Financial Status
Create a Balance Sheet Cash Flow Statement
Short Term Liabilities
Credit Card, Shopping Bill, etc...
Frequency in Businesses
Make a Personal Business Plan every month or quarterly.
Cash Flow is Negative
Eliminate Liabilities
Quarterly
Every three months.
3 Main Categories of Cash Flow Statement
Income, Expenses, Cash Flow
Types of Assets
Liquid Assets Real Estate Personal Possessions Investment Assets
Types of Liabilities
Short Term Long Tern
Lump Sum Payment Planning
Shows big payment and spending budgets for the year. Ex. Christmas, quarterly payments.
In Individuals (Pers. Balance sheet)
Shows net worth
Balance
Shows owner's equity
Long Term Liabilities
Student Loans, Mortgage, car loan, etc...
Money Management Basics
The day to day financing. -How to Best Use Money -Know Your Financial Status
Gross Pay
The money your earn without deductions.
Assets
Things of value you have. Ex. Money in the bank House Car Furniture Checking Account Savings Account
Liabilities
Things you owe money on. Ex. Car Loans, Student Loans, Mortgage, etc.. Non-examples: Utility Bill, electric bill, etc..