What Is My Income Statement And What Does It Tell Me?

The income statement is one of the two financial statements (the other being the balance sheet) that you need to be familiar with to truly understand your ever-evolving money status.

Getting a grip on the income statement is easy.  In fact, the information it reports and what it tells you is intuitive to most people.

So, an income statement contains two types of information:

• a (usually categorized) list of all income from any source
• a (usually categorized) list of all expenses

The income statement then subtracts expenses from income and the result is either net income if income exceeds expenses, or net loss if expenses exceed income.  The income statement reports information for a specific period of time, often a month or for a year.  Obviously, if you are thinking about your own income statement(s), you want to see net income reported in all (or most) of them!  One reason this kind of statement is generally intuitive to most people, is that it resembles tracking your checkbook balance to see if you are running out of money before you run out of month!

For a family or individual, the income statement is a pretty simple affair, with only a few income and expense categories.  For large businesses, of course, the income statement could be very extensive.

Now of course you are wondering how to get your own income statement in a timely manner?

It turns out that our 7 step MINT Method and PlanButVerify Personal Financial Planner are built to do just that, and more.  Since a picture is worth a thousand words, here is a link to an income statement produced by our PlanButVerify Personal Financial Planner:  Income Statement 2019.  It was generated using the example data that ships with the PlanButVerify software.

And it is easy to try out our solution!  Here is a list of the PlanButVerify versions and how they provide just what we have been talking about in the post:

• PlanButVerify-Lite:  free – delivers an income statement based on the information you enter during setup
• PlanButVerify-LitePlus:  purchase for about the price of a latte – delivers the income statement as per the Lite version and in addition calculates into the future and delivers textual warning notices of any likely future money problems based on the information you entered during setup
• PlanButVerify:  purchase for the price of two dinners at a nice restaurant (less booze!) – provides all of the above plus a set of balance sheet (described in a separate post) and income statement for each year of your (or spouse’s) projected life span!

Now, think carefully about this.  What you are offered here is where your setup information is likely to take you, for better or worse!  And when do you find this out?  Right now!  And if you are serious about living a secure money life, wouldn’t you want see the future?  Right now?  Hmmm?

It’s your life and your future.  Your money deserves your most careful attention.