I know that I am a bit of a financial freak, and I am constantly researching what options I have at home to make my finances more manageable and better-regulated. However, it doesn’t take a master’s degree to realize that the big difference between a financially healthy and unhealthy financial situation is your attitude about it.
I recently went to an all-state meet-up for financial experts, and one of the speakers, who was also one of the speakers that the rest of us were attending, suggested that financial statements should be more of a personal matter than a corporate one. He suggested that rather than just going through a big form, the financial statements should be written down in some form of personal journal.
The personal financial records give you the opportunity to see where you are in your finances, what it’s like to be in them, and how you’re handling them, and can be used to write a personal statement when required.
This is an interesting idea because financial statements are something that many people struggle with. They come in a variety of forms: monthly, quarterly, semi-annual, annual, and so on. They take up a lot of space and can be very confusing. But just because financial statements are a personal matter, doesn’t mean they should be just a formality. Personal financial statements can be very revealing and can help people realize how they are handling money, and what they are trying to accomplish.
A personal financial statement is one where we show you the income and expenses that have been made and show us how you spend the money. It can show the type of jobs you have and what you earn. It can show how much you are spending on food and drink. It can even show how much you are spending on house and car maintenance.
Unfortunately, personal financial statements can be pretty opaque. Often, there is not much information about expenses and income, just a lot of numbers and figures. So it can be useful to see your expenses as a percentage of what you make. This will help you decide if you are spending too much or too little.
The problem is that personal financial statements are often very difficult to read. In the real world, we don’t do this. The financial statements we receive from our employers, banks, and other financial institutions usually do not include our actual expenses and income. What they do reflect is how much we spend on things like food, rent, utilities, car maintenance, and so on.
These are the expenses that you keep a checkbook and tax return for. These are the things that you pay for in the ordinary course of doing business as a business. These are the things that you pay for because you have a need for them. If you don’t pay your rent on time, then your landlord can do something to get you evicted. If you don’t pay your electric bill on time, then your electric company can come and shut your unit off.
Sure, there are a lot of reasons for people to make financial statements. But there are lots of reasons why you need to make financial statements. The easiest way to explain it to people is to share something that you did for a living. If you were a realtor, you might share your sales prices for houses. If your accountant told you to make a 10-page income tax return, you would show that you made $10 million last year.
If you’re an electrician, you might need to show how much you paid for your electric bill. If you’re a home owner, you might need to show how much your house is worth. If you’re a construction company, you might need to show how much money you spent on materials, labor, and equipment. If you’re a real estate agent, you might need to show how much money you sold a house for.