As a business owner, your personal finances are closely tied to your business' finances. As your business succeeds, so will you. Many owners improve their business' chances of success by contributing personal resources in the form of loans and cash contributions. That's why it's crucial to develop a personal financial plan that you periodically review in conjunction with your business plan, planning your personal finances and goals with your business.
Statement of Net Worth
There are a number of elements to a personal financial plan, from how you manage your investments and finance your mortgage, to education, retirement, and will and estate planning.
A key part of your personal financial plan is your Personal Statement of Net Worth, which is a snapshot of your financial position. It compares your personal assets - everything you own, from the cash in your bank account to the market value of your car - to your personal liabilities - everything you owe, from the balance on your credit cards to your mortgage. The difference between the two is your net worth. When recording your assets and liabilities on your Personal Statement of Net Worth, show their current values. These may be different from their original costs.