Learn to Make a Personal Financial Statement
Did you know that your financial situation can be optimized or could at least be in the process of improving just by arming and based on a personal financial statement? It is surely what you want, so it is time to design it, but do you know how to do it? Keep reading and we explain you better.
We understand that you have many plans and goals, but it is important that you know that you must organize so that money is not diluted like sugar in water, it is not always about the amount of your income, but knowing how to manage them intelligently.
That said, you could understand incorrectly or perhaps extremist, that this implies the fact of not spending. Rather, it is about doing it with awareness and thinking responsibly about all our obligations, prioritizing luxuries or excesses, among others.
Remember that it is very important to know how to manage your capital, save accordingly and also know the amount of monthly expenses to generate a positive change in your finances.
But, first of all, learn the most important lesson by answering this question: What is a personal financial statement?
It is a spreadsheet or document that you can manage on your own, that is, personally. It would include the economic data involved in your activities, which would describe your current financial situation.
Generally, the personal financial statement provides a detailed and disaggregated view of the assets and liabilities, in addition to being able to monitor it carefully, with the aim of studying the financial situation, but for what?
You could get weaknesses in your behavior as a consumer, look for signs that indicate a better way to manage your finances and discover what you can do without or minimize to increase your profits and save more.
But before setting up your own financial statement you should know what your assets and liabilities are, since this is paramount, do you need help for this? Here we provide all the information you require.
Define your assets and liabilities
In order for you to have a clearer idea and to develop your own personal financial statement, you must know how to define what assets and liabilities are, which are basically characterized by your income or investments, and by expenses or debts, these would be defined by the following form:
- The assets: These are those factors that represent income for your current financial situation, such as the interests or returns of your bank account, investment funds, shares or shares, any account receivable, in short, any investment that generates profits .
- Liabilities: This concept includes the opposite of assets, that is, those expenses of any kind, such as debts or financial obligations such as food, health, school, rent, car fee, credit card payments, personal loans , taxes, etc.
How to value my assets?
It is essential that you know how much your assets are worth, in addition to analyzing your liabilities, and the way to do it is to classify them according to their duration, which could be short or long term. Below we give you more information about it.
Learn to classify your assets
The success of a personal financial statement is the knowledge you possess and know how to handle it in the right situations.
As long as you know how to classify your assets, you can identify which ones have immediate profits and which ones would be postponed. The types of assets are four and we explain them below:
1. Personal assets:
Within your home there are several elements that can be classified as personal assets, however, many of them are not included in a personal balance because they do not have enough performance.
At the time of making a financial statement you could add jewelry, cars, electronic devices, furniture and even clothing, works of art or antiques.
These could be assigned a value to obtain a performance estimate, for example, clothing and jewelry could count on 30% based on their initial purchase price.
However, machinery, appliances and furniture may have a value equivalent to 5% of the market cost. In addition these assets are also depreciated, for example, your furniture loses an annual value of 10%, the car loses 25% and computers about 30%.
2. Liquid assets:
They correspond to those that do not lose value by becoming cash in the short term, such as stocks, cash, promissory notes, cryptocurrencies, fixed term, etc.
3. Real estate assets:
Assets of this type offer short-term liquidity if they are rented. In case of sale, the liquidity they provide is long-term, since it could take months or more than a year to get a buyer, due to various factors, such as legal procedures, transaction conditions, etc.
This is any property that is part of your heritage and should not be specifically the structure where you are living.
4. Deferred assets:
This asset has a very variable objectivity or accuracy because it is influenced by various types of taxes, it is life insurance, pensions, inheritances, etc.
Types of liabilities
Next, know what are the types of existing liabilities or expenses to express an adequate and really functional personal financial statement :
● Floating liabilities: correspond to your debts and short-term expenses, such as fixed monthly obligations, basic services, credit cards, food, education, among others.
● Fixed liabilities: these are all those long-term obligations, or which expire after one year of having made the personal financial statement, such as the outstanding installments of any mortgage or auto loan, etc.
Develop your personal financial statement
Here we bring you a template that will work as a guide for you to capture your personal financial statement, remember that your income must be greater than your expenses or expenses, that is, assets larger than liabilities.
Place all your earnings in order according to the previous information, write down what you spend to identify how much money you have and how much you could invest, be aware of your money and insurance will be very good Try it!
As you can see, it is very easy to make a personal financial statement to find a more accurate answer to your finances. This tool is intended to provide you with organization and information to identify your debts.
However, there are really functional options designed by experts, which have been created to solve your debts in a more friendly way, with financing plans appropriate to your pocket, to settle them easily and completely.
If for example you have pending payments on your credit card, remember that you have Easy Loan, a real support for your finances, whose system will take you to settle your debts in the most intelligent and effective way.