To get to where you want to go with your financial conscious evolution, you have to know where you are.    The only way to really know if you are progressing financially is if you have a firm grasp on your current financial picture.

Contrary to what you may have heard,  preparing your personal financial reports is not that difficult.    The first time will take the most time, it will take you around 30 to 40  minutes.  Then when you maintain and update the it on a monthly basis, it should only take you less than 15 minutes.   The other option, if you don’t want to do it yourself,  is to pay someone else to do it for you.  Either way works.  Just do it!!

For the purposes of your conscious evolution financial plan, keep it simple.  There are many different reports or statements that you can generate but it is best (for now) to keep it to two reports  -   a personal financial balance sheet and income statement.

Balance Sheet

A Balance sheet tells you what assets and liabilities (expenses) you have at a given point in time.    Then your assets minus your libilities gives you your net worth.   You can find a basic one by searching on the internet or create your own.  On the right side of the paper list all your assets (home, car, stocks, bonds, savings accounts, checking accounts, trading cards – anything of value that you want to track), assign a value to each item.  Then on the left side of the paper, list all your liabilities (mortgage, car loan, outstanding taxes, credit card bills, etc.), assign a value (the full amount of the debt not the monthly payment) to each liability.   Total each column, then subtract the liabilities from the expenses – that is your Net Worth.

Income and Expenses Statement

After your finish your  balance sheet, prepare an Income and Expense Statement. This document shows you what you have coming in and what you have going out.  Do the same thing with this sheet as you did with the balance sheet - on the right side list all your income (don’t forget interest, stock dividends, etc) and then on the left list all your monthly expenses (don’t forget the money you put in your savings, 401K, IRA, etc).    Subtract the expenses from the income and you have your disposable income.  If your expenses are higher than your income, review each expense listed to determine which one you can eliminate now or over time.

As you do this every month, you will begin to see changes in your net worth, income and expenses.  Remember what you focus on increases so focus on increasing your net worth and disposable income.

Then the final step is to take both of these documents and project what your numbers will be in 5 and 10 years based on your personal financial goals, assumptions, and aspirations.

Focus on Financial Prospertiy!