Financial Statements and Recordkeeping

Personal financial statements include income statement, balance sheets and budgets. These statements are key tools in watching your status and should be prepared and revised often. Without them, it is tough to deal with planning problems.

True and complete personal recordkeeping helps the planning process and enhances your state of mind.  SCM provides guidance to assist you in setting up an effective system.

Balance Sheet

The balance sheet shows your assets, debts and net worth. The level of detail should be on par with their usage. Sources of info include checkbook, broker’s statement, wills, leasing and policies, safe box contents and tax returns.

Income Statement

The income statement lays out your income and expenses. The chief sources of income include wages, bonuses and profit-sharing, transfer payments and  invest income. Expenses include mortgage or rental payments, taxes, household expenses, loan payments, college, health costs, and savings.

Financial Statements


A budget is an income statement prepared in advance. It helps your thinking process by marking problems in spending patterns, points out items to overcome and sets up fixes. The steps to prepare a budget include setting goals, looking at your current needs, picking a proper budget form, smoothing monthly receipts, listing monthly expenses, and matching actual to target receipts and payouts.

Usung Statements

Using statements to map your your finances from a few angles in order to fully grasp your current status and figure out how best to work out your life plan. SCM looks at your income statement for short-term needs, flow of funds, asset structure, use of assets and short-term results. SCM looks at the balance sheet for asset mix, debt, net worth, asset valuation, retirement plans and reserves.


Many clients don’t realize how simple it is to create an adequate recordkeeping system. The main components are a safe deposit box, effective filing system for active files and keeping inactive files in storage. The easier the set up is to use, the more likely you will sustain an interest in its value. Other adult family members should know where your records are located, their basic content and the logistics of your accounting system.

For other Financial Planning topics, visit our Financial Planning page