Space has been left for

The most basic and arguably most important tools in personal financial management are your financial statements. These are not reports that you receive from your bank, but your own analysis of your financial situation.There are three statements that you can use to analyze your current financial situation, your Balance Sheet, Income and Expense, and Annual Budget. The balance sheet gives you a snapshot of your Net Worth, or how your Assets compare with your Liabilities. It is not uncommon to have a negative value if you own few assets and have large student loans. Ideally you would work towards maintaining and increasing a positive Net Worth. Your Income and Expense statement helps you understand where your money goes each month. It looks at the past to develop a report on what money you have earned and how you have spent it. This allows you to identify bad habits or problem areas. Your Annual Budget is a goal. For the next few months you are going to try and follow your budget which should outline a plan for accomplishing financial goals, ie, saving for future purchases, building a retirement fund.These statements should be used in a cycle as you continually evaluate your spending habits you can adjust your budget to something that works for you. Your balance sheet will help you evaluate your progress towards your goals.

For this assignment you will only be creating your Balance Sheet and Annual Budget. Use these Excel files to prepare your statements.

Personal Balance Sheet

Annual Budget

Space has been left for you to add different items if the provided line items are not sufficient. If you are leaving any of the main categories or line items blank, or have a special circumstance, please indicate what or why in the comments section on each statement.

Prepare a Personal Balance Sheet

The personal balance sheet must include your assets (what you own), your liabilities or debts (what you owe), and your net worth (the difference between your assets and liabilities). Your assets (the items you own) should be listed in the left column of your worksheet, along with their money value. In the right column of your worksheet, list your liabilities (money you owe) along with their dollar value. Calculate your net worth using the equation: Net worth = Total assets – Total Liabilities. After you find the difference between your assets and liabilities, list your net worth in the bottom right corner of your worksheet. The provided spreadsheet should make most of the calculations for you, but make sure you check the results for accuracy.

Prepare Your Annual Budget

Your budget will cover the next 12 months starting from now. You will need to include all expected income and plan out your expenses. Again, the spreadsheet should total things for you but you are responsible to make sure those totals are correct. The goal is not to end up with a positive surplus. A surplus in your budget means you have money you aren’t taking advantage of by investing or saving. It is likely that you will end up with some surplus or deficit, but try to balance your budget. If you leave a deficit for any month or for the whole year you will need to explain how you plan on covering the difference. Loans should be included in the income portion.

***As you create your statements, please remember that all information is kept confidential between you and your instructor. In this activity, it is preferred that you use your own information and enter accurate numbers, as it will help you learn. However, you are allowed to adjust any values as you desire if you have reservations about full disclosure.

• 20 Points – Balance Sheet:Make sure your balance sheet is complete and that you provide a line item in each category. If you need to leave any category blank, please enter N/A or something in the category so your instructor knows you did not just miss or forget the category. Remember to check your math and make sure that your final totals for assets, liabilities, and Net Worth are correct.
• 25 Points – Annual Budget:Make sure that you address all of the line items. Feel free to add items as necessary. Also, include comments as necessary to explain any budget items that might be extreme or out of the ordinary. You don’t have to provide details, but it helps your instructor see that you haven’t just picked a bunch of random numbers.

Make sure you check all your totals and that you are not submitting a budget with a large surplus or deficit. Go back through and make revisions if necessary.

Your assignment should be submitted as an Excel (.XLS or .XLSX) file. The assignment must be submitted by the due date. Late assignments will not be accepted.

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