In Australia – our financial year runs July to June and I LOVE it! This gives me a chance to have a financial reset. It’s an opportunity to reassess my situation and have a ‘fresh’ start for the new financial year.
This year I have decided, I want to treat my personal finances like a business. I found myself wondering if we were to be more aware of our own relationship with money, and choose to ‘own’ it, would we be more successful with our finances?
How am I going to go about this? I am going to make myself a Profit/(Loss) Statement and a Balance Sheet for the financial year.
This is my next major blog project and it will be running from April until early July. I will have separate posts to this explaining my process, the different findings I have and providing examples. As always, this follows my three step process from My Personal Finance Process; assess, plan and action.
- Track your expenses for whichever period you feel is necessary.
- Work out your realistic budget.
- Customize your template to match your income, expenses, assets and liabilities.
- Complete your budgeted totals for the Profit/(Loss).
- Complete your Balance Sheet.
- Track Ongoing Data
In the most basic form, the Profit/(Loss) will show:
Income – Expenses = Remaining
The Profit/(Loss) Statement is a comparison of the budgeted and actual.
The Balance Sheet will show:
Assets (Cash, Property, etc) – Liabilities (Debts) = Net Position
For the Balance Sheet, this is just a bit of fun to see how I have progressed after the financial year with my overall position.
Would you like some assistance putting your own Profit/(Loss) Statement or Balance Sheet together? Keep an eye on Facebook too see details for the giveaway, where you will receive the templates and I can either complete for these for you or provide any necessary assistance to help complete them! I will be randomly selecting three people to help put their own set of personal ‘financials’ together, this can either be for a singles, couples or families. Winners will be drawn Sunday, 28th of April. This isn’t limited to Australia, we can work together on any dates that you see fit.
If you have any questions, please do not hesitate to either comment below or email email@example.com.
Baby Sloth x
Disclaimer: I am not a financial advisor. These documents are not professional documents and cannot be used as such. This is only to provide awareness and to show you finances from a different perspective.