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A personal financial statement is generally a document showing an individual's cash inflow and out flow. With a clear analysis of how an individual spends his or her money one can be influenced to make major decision in his/her life that will significantly impact of his/her life. A personal financial statement will be useful in identifying ones assets and liabilities since it is a record of what you own and owe respectively (Personal Financial Statement, n.d.). With a clear analysis of how an individual financial state is he/she is in a position to keep his/her finances in check and have a good idea of how his/her financial state is.
The first decision I plan to take in the coming year is to improve on my savings. I have always wish to save on my earning and even tried to save some money severally but my effort have always been in vain. This is because I was ignorant of my personal financial statement and the financial management ability it would give to me. I was not fully aware of how much I earned from all my income sources and how much I spend therefore not in a position to determine how much I should spent in order to save. With personal financial statements at hand, I will be ably to determine my income in advance and set my spending priorities right so that I don't spend much than I earn. Also I will be able to cut down on my expenses so that I have some money left for my savings docket.
The second decision in intent to make in the coming year is to get a loan for personal development. The financial statements will highly influence the amount of money a get through the loan, and the source of the loan (Marx, 2009). With a clear analysis of how I spend my money I am in a position to identify areas that require an increase in financing in order to improve my economic status as well as my financial freedom. My personal financial statement will help prove my creditworthiness to creditor or financial institutions thus help me convince them to give me a loan to stare an income generating enterprise and finance my budgetary areas that require more financing. The financial lenders will to be in a position to loan me basing on records they see in my financial statement which I will use to show them how I plan to repay the loan. With a loan at hand I will start a business venture to improve on my cash inflow and be in a position to face the current and future economic hardships (IDEA Health & Fitness Association, 2008).
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The last decision that I intend to take that will be impacted by my financial statement to go for further studies. This meant to improve on my career so that I can get a better job than my current one and further improve on my earnings. Due to the current competition in job industry there is need to improve education level in order to keep up with employment requirements. Further studies necessitate the need for increased savings and a source of extra income (Gitman and Joehnk, 2003). Here again, the financial statement will come in handy enabling determine areas where I need to cu cost in order to save some funds for my studies. It will help me identify areas of less pressing demands on my personal expenditure in addition to facilitating acquire and educational loan.
I sum, I need to improve on my savings for emergencies, get a loan to start an income generating venture, and save some money for career improvement through further studies. All this decision involve increasing my financial health, increasing my debt as well as increasing my ability to earn more money all of which lie under the auspices of my personal financial statement. There are many benefits that come with the use of this simple financial management tool. These include managing ones net financial status, having the knowledge of ones liabilities and assets and improvement of ones welfare.