Assessing Current Financial Resources

From Financial Literacy Wiki

Assessing Current Financial Resources

The financial goals that you intend to pursue depend critically on your available financial resources. The more financial resources you possess, the more goals you can seek to achieve. Hence the first step of personal financial planning process is assessing your current financial resources. You can assess your current financial resources by developing your own personal balance sheet and income and expenditure statement. Your personal personal balance sheet show assets and liabilities you owe others. The difference between assets and liabilities constitute your net worth or your true wealth. Your personal income and expenditure statement shows how much income you have earned annually and how much of it was spent. The difference between income earned and expenditure incurred is your net savings. Net savings will enhance your net worth in balance sheet.