Income Statement Example Personal Statement

Month after month, many individuals look at their bank and credit statements and are surprised that they spent more than they thought they did. To avoid this problem, one simple method of accounting for income and expenditures is to have personal financial statements. Just like the ones used by corporations, financial statements provide you with an indication of your financial condition and can help with budget planning. There are two types of personal financial statements:

Let's explore these in more detail.

Personal Cash Flow Statement
A personal cash flow statement measures your cash inflows and outflows in order to show you your net cash flow for a specific period of time. Cash inflows generally include the following:

  • Salaries
  • Interest from savings accounts
  • Dividends from investments
  • Capital gains from the sale of financial securities like stocks and bonds

Cash inflow can also include money received from the sale of assets like houses or cars. Essentially, your cash inflow consists of anything that brings in money.

Cash outflow represents all expenses, regardless of size. Cash outflows include the following types of costs:

  • Rent or mortgage payments
  • Utility bills
  • Groceries
  • Gas
  • Entertainment (books, movie tickets, restaurant meals, etc.)

The purpose of determining your cash inflows and outflows is to find your net cash flow. Your net cash flow is simply the result of subtracting your outflow from your inflow. A positive net cash flow means that you earned more than you spent and that you have some money leftover from that period. On the other hand, a negative net cash flow shows that you spent more money than you brought in.

Personal Balance Sheet
A balance sheet is the second type of personal financial statement. A personal balance sheet provides an overall snapshot of your wealth at a specific period in time. It is a summary of your assets (what you own), your liabilities (what you owe) and your net worth (assets minus liabilities).

Assets can be classified into three distinct categories:

  • Liquid Assets: Liquid assets are those things you own that can easily be sold or turned into cash without losing value. These include checking accounts, money market accounts, savings accounts and cash. Some people include certificates of deposit (CDs) in this category, but the problem with CDs is that most of them charge an early withdrawal fee, causing your investment to lose a little value.
  • Large Assets: Large assets include things like houses, cars, boats, artwork and furniture. When creating a personal balance sheet, make sure to use the market value of these items. If it's difficult to find a market value, use recent sales prices of similar items.
  • Investments: Investments include bonds, stocks, CDs, mutual funds and real estate. You should record investments at their current market values as well.

Liabilities are merely what you owe. Liabilities include current bills, payments still owed on some assets like cars and houses, credit card balances and other loans.

Net Worth
Your net worth is the difference between what you own and what you owe. This figure is your measure of wealth because it represents what you own after everything you owe has been paid off. If you have a negative net worth, this means that you owe more than you own.

Two ways to increase your net worth are to increase your assets or decrease your liabilities. You can increase assets by increasing your cash or increasing the value of any asset you own. One note of caution: make sure you don't increase your liabilities along with your assets. For example, your assets will increase if you buy a house, but if you take out a mortgage on that house your liabilities will also increase. Increasing your net worth through an asset increase will only work if the increase in assets is greater than the increase in liabilities. The same goes for trying to decrease liabilities. A decrease in what you owe has to be greater than a reduction in assets.

Bringing Them Together
Personal financial statements give you the tools to monitor your spending and increase your net worth. The thing about personal financial statements is that they are not just two separate pieces of information, but they actually work together. Your net cash flow from the cash flow statement can actually help you in your quest to increase net worth. If you have a positive net cash flow in a given period, you can apply that money to acquiring assets or paying off liabilities. Applying your net cash flow toward your net worth is a great way to increase assets without increasing liabilities or decrease liabilities without increasing assets.

The Bottom Line
If you currently have a negative cash flow or you want to increase positive net cash flow, the only way to do it is to assess your spending habits and adjust them as necessary. By using personal financial statements to become more aware of your spending habits and net worth, you'll be well on your way to greater financial security.

Personal statements are documents that are written in response to a request of information made by another party. Usually, one writes a personal statement in essay form to apply for colleges. There are also personal statements that come in the form of a list, such as the personal financial statement.

Whatever personal statement format you are looking for, our statement templates got you covered. These are in PDF format, can be downloaded, and printed. All the text are totally editable to accommodate the information that needs to be included.

Personal Financial Statement Format

Personal Mission Statement Format

Personal Cash Flow Statement Format

Personal Statement Format for College

Personal Statement Format for Job

How to Make a Personal Financial Statement

If you are starting a business or applying for a VISA, loan, or some kind of permit, you might be asked to write a personal financial statement. We have in stock templates for personal financial statements that you can use and edit with your personal information.

Our personal financial statement templates contain the necessary and general information that most agencies or institutions need from you, which include the following:

  • personal information
  • contact details
  • section 1
    • assets
    • liabilities
    • annual income
    • estimate of annual expenses
    • general information
    • contingent liabilities
  • section 2
    • cash in banks and notes due to banks
    • life insurance
    • securities owned
    • note and accounts receivable
    • real estate owned
    • mortgages and contracts owned
    • personal property
    • notes

What You Need to Make an Income Statement

Our income statement template covers the basic information needed to determine the cash flow of your company and comes in two parts: income and expenses. It also conveniently lists down the documents you need to write an income statement:

  • most recent paycheck
  • statements showing income from income sources (e.g., pension, Social Security, savings)
  • most recent bank and investment statements
  • most recent credit card statements
  • statement of other debts (loans)
  • most recent checking and savings account
  • record of discretionary expenditures over the past month

Once you have obtained these documents, you can now use the income statement template painlessly. Jut download the ZIP file, extract the PDF document, and put in your information on the boxes. It is a simple and straightforward template that will save you time and effort.

Law School Personal Statement Format

Residency Personal Statement Format

University Personal Statement Format

Personal Statement Format for Scholarship

The College School Personal Statement

Almost all colleges and universities require student applicants to furnish them a personal statement as a last step in the application process. Questions vary from one school to another, but the goal remains the same: they want to know how you can be an asset to the institution.

We have a number of graduate school personal statement samples from universities to give you an idea of the questions you might face and the kind of answers you might give to leave a good, lasting impression.

How to Use Personal Statement Samples for College

  • Download the ZIP file and extract the PDF file.
  • Print the sample.
  • Read the entries and questions thoroughly.
  • Answer with self-confidence without sounding cocky.
  • Practice writing your answer on the space provided. If your answer exceeds the space, you might want to tweak your answers so that they fit snugly and neatly on the provided space.
  • Get someone to read the personal statement sample and solicit advice for improvement.

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