A financial statement is your “report card” of how you take care of your finances. It follows you throughout life. Banks don’t want to know what your grades are or were in college, they want to see your financial statement.
Your financial statement shows how much money is coming in (assets) each month, and how much money is going out (liabilities) each month.
Assets: Paycheck, savings account, investment income, stocks and bonds
Liabilities: Mortgage, rental payment, car payment, student loans and any other monthly payments you may have.
Simple example of a financial statement
| Assets (Cash going in to your pocket) | Liabilities (Cash coming out of your pocket) |
| Monthly job paycheck: +$3000 Savings account: +$20,000 Retirement account: +$45,000 TOTAL: + $3000/month (with extra assets for when/if you need them) | Monthly mortgage/rent: -$1200/month Monthly car payment: -$400/month Student loan payment: -$200/month Credit card debt? TOTAL: -$1800/month |
Creating opportunities for financial freedom 