PERSONAL FINANCIAL STATEMENT Westfield Bank Form

What is the personal financial statement?

A personal financial statement is a document that provides a comprehensive overview of an individual's financial situation. It typically includes details about assets, liabilities, income, and expenses. This statement is often used by financial institutions, such as Westfield Bank, to assess an individual's creditworthiness when applying for loans or mortgages. By compiling this information, individuals can gain insights into their financial health and make informed decisions regarding their financial future.

Key elements of the personal financial statement

When preparing a personal financial statement, it is essential to include the following key elements:

• Assets: This section lists all valuable items owned, such as cash, real estate, investments, and personal property.
• Liabilities: Here, individuals should detail all debts and obligations, including mortgages, loans, and credit card balances.
• Income: This part outlines all sources of income, such as salary, bonuses, rental income, and dividends.
• Expenses: Individuals should record their monthly and annual expenses, covering categories like housing, transportation, and personal spending.

Steps to complete the personal financial statement

Completing a personal financial statement involves several steps to ensure accuracy and comprehensiveness:

1. Gather financial documents, including bank statements, tax returns, and pay stubs.
2. List all assets and their current values, ensuring to include both liquid and non-liquid assets.
3. Detail all liabilities, including the total amount owed and the terms of each debt.
4. Calculate total income from all sources, ensuring to account for any irregular income.
5. Compile a list of monthly and annual expenses to provide a complete picture of financial obligations.
6. Review the completed statement for accuracy and completeness before submission.

How to use the personal financial statement

The personal financial statement can serve various purposes, including:

• Applying for loans or mortgages, as lenders often require this document to evaluate financial stability.
• Assessing personal financial health, helping individuals identify areas for improvement.
• Planning for future financial goals, such as saving for retirement or purchasing a home.

Legal use of the personal financial statement

When used correctly, a personal financial statement is a legally binding document. It is crucial to ensure that all information provided is accurate and truthful, as discrepancies can lead to legal issues or denial of financial applications. Additionally, this document may be used in legal proceedings, such as divorce settlements or bankruptcy filings, making it essential to maintain its integrity.

Examples of using the personal financial statement

Individuals may use a personal financial statement in various scenarios, such as:

• When seeking a mortgage, lenders will review the statement to determine the applicant's ability to repay the loan.
• During financial planning sessions, individuals can analyze their financial statements to set realistic savings goals.
• In estate planning, a personal financial statement can help individuals outline their assets and liabilities for beneficiaries.