Personal Finance is all about managing your personal finance statements.
Your personal financial statement is a form which details the following for you -
Your income and expenses
Your cash flows
Your assets and liabilities
Your net-worth
Like a diagnostic report determines your body’s health, a personal financial statement determines your financial health. It gives a holistic view of your financial condition.
One must be aware of their financial condition at any point in time. You must know how much you make, how much you spend, what assets do you own, who do you owe money to and are you managing your financial affairs efficiently.
We will discuss each component of a personal financial statement in detail in the following days.
I have prepared a free template of personal financial statements. You could download it here.
A template of personal financial statements with a financial freedom checklist and financial freedom calculator is available for a dollar.
Reading Recommendation
There is no better book to explain the concept of a personal financial statement than Rich Dad Poor Dad. I would highly recommend reading this.
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