How to Make Your Own Personal Balance Sheet

There are simple ways to make or create your own Personal Balance sheet even if you're not an accountant. If you just want to monitor  your Balance sheet,it is a smart idea so you know how much you own and how much you owe. Basically all you need is to write down all your assets and liabilities. It is important you know all of them and have some receipt and proof for proper documentation.                                                         

To get your net worth you have only to subtract your total assets from your total liabilities. Remember your net worth go up as your assets increases and your liabilities decreases and this would be a good sign you are in a good hands. Once your net worth go down- it means your assets decreases and your liabilities increases and your personal finance is in danger.

Monitoring your personal finances is very important nowadays. The most important we can do, spend what you can afford and try to save during rainy days if possible.

                                                                Personal Balance Sheet

As  of January 1,XXXX

Assets:                                                                                    

Cash on hand:   XXX

Savings account: XXX

Checking Account: XXX

Prepaid Deposit: XXX

Cars: XXX

Home: XXX

Retirement: XXX

Investments: XXX

Other: XXX

Total Assets                                 XXX

Liabilities:

Home Mortgage: XXX

Car Payment: XXX

Credit Card

Other Debt: XXX

Total Liabilities                           XXX

Net Worth:                                   XXX 


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• Why is Basic Accounting so Important

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Why is Basic Accounting so Important for Personal finance

I graduated in Business school and I know Basic Accounting so important in our daily life. We just don't know but we use accounting everyday- the money comes in and money that  goes out. Basically you don't need to graduate in Business school to understand all of the accounting cycle. Of course it is well worth once you are there and have a better understanding about the subject. It's all different stories once you study the accounting or wants to be an accountant.

There are only 3 words you should understand and how  to manage your finances. Most of us screw up with these words.

• Asset-  is an economic resources or  whatever you own like a private property, one of the standard examples are cash, furnitures, homes, clothes,car and land. Remember all these assets my depreciate the value if you think a long term.
• Liability-is responsible for something. This is your debt and you have responsibility to pay in a short term or long term. One of the example is your house mortgage, car mortgage and your credit card. 
• Income-is your monthly wages or salary. 

Most people screw up with these 3 words and sometime they think liability is there asset and they forget about their income and that's we called a compulsive buyer. Some people forget that asset would depreciate and never think the long term. 

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How to Prevent Getting Major Bills on Credit Cards

Credit Cards has pros and cons and it  all depends on  you. Sometime, credit cards is  a big help if you used it wisely but being a human  we tend  to be an  impulsive buyer and this is true in any ways

It is hard to control once we don’t understand and learned our lesson from our  mistakes or from other people who are in debt and can’t get out of it.

Buy what you can afford: 

Don’t compete with other Jones and Joneses buy what you can afford even if you charge it in your credit card, just think of it you can afford to pay when you arrived at home that day.

Pay the full amount on time-Swiping is so easy and sometime you forget how much you owe at the end of the day. Once you received your statement, pay the full amount on time to avoid interest .

Make use Credit Card Intended for convenience:

Credit card is for convenience and easy to travel with without anything to worry. Make use of  this as your protection and not to get debt and worried your days how to pay it. Your credit score will tell  you “how responsible people you are”.

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There is no secret to save money

Would you believe if I say there is no secret to save money? Why? Basically if you don’t understand your needs and wants in life then you can’t save money.  I know most of us struggling how to save money. I’m sure most of us  spend in reading books, e-books and listening to guru on how to save money. My questions is , do you really saves money? Is there really a secret on how to save money or it is a hoax.

When I study my business degree budgeting and analyzing goes together. In real life it is hard to do. Whether you like it or not if you don’t understand your needs and wants there is no secret to save money. Another thing to consider is sacrificing your needs or wants.Are you ready?

What is Your Needs:

I say that the first thing you need to understand is your needs and most of us has a hard time to understand what is really our needs in life . I/we are a compulsive buyer. We tend to use our emotions in terms in our needs.

Wants:

Basically wants is only a human being and I don’t deny I have a hard time about my wants. For me sometime, wants is my needs and I ended buying it. My wants probably is your needs and your needs is my wants and vice-versa.

The bottom line, we all need to identify our needs and wants,then we can save money by cutting and understanding our needs. It's a bout disciplining ourselves and focus your goal in life.

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