Budgeting and Planning

Personal Balance Sheet

A financial statement that summarizes an individual's assets, liabilities, and net worth at a specific point in time.

Net Worth

total assets - total liabilities = persons networth

Personal Income Statement

financial report showing one’s profitability through income and expenses over a specific period

Financial Ratios

Metrics used to assess financial health to see financial stability.

ex: assets-to-liabilities ratio

Cash Flow Monitoring

tracking where your income comes from and where that money is spent

Financial Goals

Specific objectives that guide saving and spending decisions, categorized into long-term, intermediate-term, and short-term goals.

Long-Term Goals

Major financial objectives that require significant time and planning, such as starting a business or creating a retirement fund.

Intermediate-Term Goals

Financial targets that are achievable within a few years, like paying off major debt or saving for a child's college.

Short-Term Goals

Immediate financial objectives that can be accomplished within a year, such as gathering emergency funds or paying off bills.

Budget Conformity

The practice of aligning spending habits with established budget goals to ensure financial discipline.