Your Personal Financial Statements
Personal financial statements are the roadmap that guides us from where we are today, to where we want to be tomorrow. They also provide fixed points of reference from which we can measure our progress over time. Personal Financial Statements There are two basic personal financial statements that everyone should prepare, or have a financial advisor prepare, at least once each year; the cash flow statement and the balance sheet. This process is a critical first step in financial planning. Tracking your financial position and progress gives you a great feeling of control — you know where you are going financially. It helps you to make wise decisions about financial matters. Cash Flow Statement "Cash Flow" is how you spend your money. A cash flow statement is an ongoing financial document which tracks sources of income, uses of income, and the difference between the two (surplus funds which should be invested towards future financial objectives.) If you keep a budget, you are, i...