THE LIFE

October 21st, 2011

Creating a Personal Finance Statement

OLYMPUS DIGITAL CAMERA

If you own a small business or are self-employed, this guide will help you track income and expenses on a regular basis.

Entrepreneurs tend to create personal financial statements for one of two reasons. Either they love numbers and want to track expenses and income in order to know what makes their business tick, or they are meeting with a lender or an investor who will want to review financial statements.

Business owners who are intimidated by financial analysis tend to fall into the second group—they act only when pushed. But that can be a mistake. Knowing one’s way around a financial statement is an important step in maturing as a business owner. A personal financial statement is also a helpful tool in helping you to understand the separation (and blurring of the line) between an individual’s assets and liabilities, and those associated with his or her business venture.

To be sure, managing financial statements is not exactly the most creative or glamorous aspects of running a business. “If ever I ask people why they want to start a business, it’s a sense of self fulfillment or I want someone to be able to experience this certain product,” says Chuck Matthews, executive director of the center for entrepreneurship, education and research at the University of Cincinnati. “But creating and maintaining a budget is one of the most important things to do.”

So, whether you are ready or not, you should sit down with your financial account information and create a series of Excel spreadsheets—starting with a balance sheet and income statement. These documents will make up your personal financial statement.

Creating a Personal Finance Statement: The Balance Sheet

A balance sheet’s purpose is to show the assets you own and the liabilities you owe. When calculated, the positive assets and negative liabilities will show your net worth.

Among the assets to include on your balance sheet: bank account balances, the value of stocks owned, and the value of your property. Simply log on to your bank’s account and any brokerage accounts to obtain current numbers. In order to obtain accurate property values, you’ll want to call your real-estate agent who does appraisal and get an updated value assigned to any property you own. While you’ll want to create a new personal financial statement every month, this step isn’t necessary every time – just try to keep your property value updated each quarter.

As for liabilities, add any sort of lease, mortgage, credit-card debt, or loans you are currently repaying. Simply log on to your lender’s site (which might be the same as your personal and business accounts from the assets column) and get the most recent numbers. Some easily overlooked liabilities are tax payments and accounts payable.

It helps to consider this balance sheet just a snapshot of what you have and what you owe. You are not creating a ledger for the week, month, or year. You are simply trying to take a picture of your net worth at one moment in time.

For a complete list of all the items a balance sheet can include, check out Inc.com’s detailed guide.

 


About the Author

DeAndra Harrison
DeAndra` A. Harrison, Editor for Socialtik Mag is a Columbus, OH native, trying to survive in the "concrete jungle of NYC", who is passionate about her entrepreneurial ambitions. She is striving to succeed and she will let everyone know. She believes that helping herself is not enough, so she actively imparts the knowledge she acquires to those around her.




 
 

 
5960338-brainstorming-concept--related-word-cloud-color-sticky-notes-and-white-chalk-lines-on-blackboard

7 Rules to a Perfect Brainstorming Session

We all know that as budding entrepreneurs we have to create new ideas 24/7. We always have to have our thinking caps on and forge new ways to market our products or make people want to use our services. When we are sleeping, ou...
by DeAndra Harrison
259

 
 
3d rendering of handsets from an old vintage phone

How Do Small Collection Accounts Impact Your Credit Score?

Fortunately, there is one recent change to the world of credit scoring concerning small debts, which are sometimes called “nuisance” collection accounts. Fair Isaac, creator of the FICO score, has rolled out to all three cr...
by Socialtik Mag
241

 
 
alg_apple_ceo_steve-jobs

Steve Jobs’s 7 Rules to Success

Steve Jobs’ impact on your life cannot be overestimated. His innovations have likely touched nearly every aspect — computers, movies, music and mobile. For entrepreneurs, Jobs’ greatest legacy is the set of pr...
by DeAndra Harrison
96

 

 
200398520-001

Is Marketing a Money Drain or Money Fountain?

Marketing is an essential part of running a business, often overlooked or poorly implemented due to busy-ness of the Owner, this gets looked upon as money draining out of the business. On the other hand, if done right and imple...
by DeAndra Harrison
85

 
 
fundamentals-of-pitching-to-investors

Perfect Pitch for an Investor’s Home Run

Angel investors can provide you not only with the money to take your small business to the next level, but also real-world experience, advice and a cache of industry connections. But are you giving investors the information t...
by DeAndra Harrison
85

 



68 Comments


 
 

  1. Women’s shoes, wear Christian Louboutin high-heeled shoes woman? Men admire you! Studies have shown that more men than women wonder.


  2. working is fantastic cardiovascular work out and is also wonderful to fit your needs in different ways. Your working boots and shoes are resources that do two items to fit your needs they boost your performance, they usually guard your ft from harm. each casual and important runners need to select boots and shoes carefully.


  3. Money and support is not all the things in a person’s life. The matter of affection and care is also an invisible need that people tend to overlook. For people who fill the streets in rags and dirty clothes, a simple comfort and smile may eventually give their lives a new lease.


  4. Yesterday, my sister purchased a pair of Christian louboutin shoes that come going to be so fabulous and elegant red bottoms shoes


  5. aliment that backpack MBT Shoes Chapa Red Bottom Shoes?Now you can access your dreamt MBT Shoes Chapa with baby allocation of the aboriginal price.


  6. Move over Tulisa: Fazer hooks up


  7. Today is very difficult conditionals for working in small buisness and people should be prepared to lost it.


  8. A Prom dress search contains the trip for the salon or day spa along with a excellent tanning session or two.


  9. The main element with a purpose to running barefooted may be the going motion the feet will take, That propagates the particular influence through all of those other physique MBT Shoes http://www.embts.co.uk/


  10. Girls like to possess one of the most fashionable and adore changing more than the fashionable and fancy garments for them foe wonderful comfort and outfits.


  11. Girls like to possess one of the most fashionable and adore changing more than the fashionable and fancy garments for them foe wonderful comfort and outfits.


  12. Today is very difficult conditionals for working in small buisness


  13. 7malls.com deals with a plethora of Cheap Michael Kors Handbags,brands accessories and has a immensely diversified collection in their online store.Michael Kors Outlet The prices are some of the most discounted rates offered in the online stores arena.Michael Kors Store Online Louboutin manufactured an individual’s draw by using special reddish colored soles, empowering pumps and also covetable equipment, stage designer high heel sandals and stylish aftermarket clutches have created Christian Louboutin UK an extravagance must-have for each and every fashionista.


  14. For an individual or a fledgling young start-up, an income statement can be relatively simple. If the balance sheet represents how much you own and owe, the income statement represents how much you made and how much you spent.


  15. Excellent weblog, many thanks a lot for your awesome posts!


  16. on the New York Stock Exchang the moment sweetie bracelets are extremely favorite; they can be a example of items of fun jewelry which might be expressed by brands renowned for quality


  17. Thanks for sharing. i really appreciate it that you shared with us such informative post


  18. Good to know that such kind of posts are there to help ignorant and novice people.


  19. Ici vous pouvez trouver les plus nouveaux de style bottes Ugg pas cher @ 66,00 $, ils sont grandement conçus qui sont Ugg Bailey populaire au cours des world.Uggs Le point de vente vous propose des produits uniques et exquise à Ugg vente en ligne d’usine plus bas prix en ligne.http://www.chaussurebottespascher.com/


  20. Quality articles is the important to attract the people to pay a visit the website, that�s what this web site is providing. action guide


  21. Corporations raise capital in much the same manner as other businesses: either through incurring debts to creditors or receiving investment funds from their owners.


  22. If the balance sheet represents how much you own and owe, the income statement represents how much you made and how much you spent.


  23. Thanks for sharing. i really appreciate it that you shared with us such informative post


  24. Very nice post. I just stumbled upon your weblog and wished to say that I have truly enjoyed surfing around your blog posts. After all I’ll be subscribing to your rss feed and I hope you write again soon!


  25. The h2o degree in a perimeter more than flow swimming pool is equal to that of its bordering area immediately after which can be margined by a notch or channels.


  26. Thank you for giving me the information provided, let me once again disintegration. Thank you, hope yo, looking forward to…….


  27. Valuable thoughts and advices. I read your topic with great interest. They say they’ve been taxed and regulated to death for decades, and they have no choice but to do what they can to claw their way back into profitability.


  28. The balance sheet represents how much you own and owe, the income statement represents how much you made and how much you spent.


  29. Valuable thoughts and advices. I read your topic with great interest. They say they’ve been taxed and regulated to death for decades, and they have no choice but to do what they can to claw their way back into profitability.


  30. Tacho Universal is the most sold programming-device for digital speedometers worldwide csh


  31. I see this publish among the best publish ever. It may be unusal. I truly admire quite ideas you are offering within the content. I’m anticipating for additional important ideas plus much more blogs. Your a very lucky you to definitely certainly have this gift basket of understanding. Stay the very best !!!!


  32. Wow, 3rd straight game? Who was victorious!


  33. Valuable thoughts and advices. I read your topic with great interest. They say they’ve been taxed and regulated to death for decades, and they have no choice but to do what they can to claw their way back into profitability.


  34. I see this publish among the best publish ever. It may be unusal. I truly admire quite ideas you are offering within the content. I’m anticipating for additional important ideas plus much more blogs. Your a very lucky you to definitely certainly have this gift basket of understanding. Stay the very best !!!!


  35. I read your topic with great interest. They say they’ve been taxed and regulated to death for decades, and they have no choice but to do what they can to claw their way back into profitability.


  36. Thank you for sharing! buyincoins, where you can buy good products from China directly without any shipping fee.


  37. We were able to find much appreciation that we can get because there are many awards that we can get right now if we are able to try hard and precise AUTO


  38. I have to say that the information here was the most complete that I found anywhere. I am definitely bookmarking this to come back and express later.


  39. The most interesting and excited holiday is Halloween, and many dealers also want to find cheap Halloween costumes for the season sale. Why not consider dear-lover.com or shiyingsexylingerie.com? They are experts on manufacture and wholesale Halloween costumes.


  40. This is quite an outstanding thought I just love it all.


  41. I read this post this is very informative site about advertisement i like this blog i am empress thanks sharing this blog


  42. We always permit to acquire our thinking hoods on moreover counterfeit unfamiliar streets to store our results or fabricate persons demand to wont our employs. Whereas we are inactive,…


  43. thanks for your sharing and this is really a good article , i like it.doris


  44. I have really had a good experience in terms of information of you blog. I am sure visitors will also like your creativity.


  45. Dental Teeth Whitening Light Bleaching 6 LED Integrated.feng


  46. I have read about keep updating about their present works and keep sharing. I love to read on more of this sort. Thank you with regards.


 
 



Leave a Reply

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>

Twitter Users
Enter your personal information in the form or sign in with your Twitter account by clicking the button below.


thru 9/26 - Fall Sale. 30% Off select styles. Disc