Personal Financial Statement) & (Interpersonal Communication and Behavioral Finance)

Posted: August 27th, 2021

(Personal Financial Statement) & (Interpersonal Communication and Behavioral Finance)

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(Personal Financial Statement) & (Interpersonal Communication and Behavioral Finance)

Personal Financial Statement

Murray (2020) defines a personal financial statement as a spreadsheet or document explaining a person’s financial position. It includes personal information and explanation of aggregate liabilities and assets for the individual. Deduct liabilities from resources to see the total assets (Murray, 2020). Individual new worth is calculated by subtracting liabilities from assets. Net value can fluctuate depending on how more assets or liabilities a person has. Hence, personal financial statements are useful for a credit application, tracking personal goals, and measuring wealth. 

A person’s financial statement explains their new worth. The individual’s net worth is the sum of all assets less liabilities. As a result, personal financial statements are usually used when applying for credit, like mortgage or loans(Murray, 2020). Credit officers use financial statements to increase their perspectives and viewpoints into making a conversant credit decision (Murray, 2020). Therefore, financial statement helps an individual provide financial proof for the credit or give information on personal assets as collateral. 

Interpersonal Communication and Behavioral Finance

Interpersonal skills are personal traits needed to work, interact, and communicate with other individuals effectively. Therefore, interpersonal skills can interact, collaborate, and get along with others(Ahmed, 2019). Contrary, behavioral finance studies the behavioral influence of financial analysts or investors (Ahmed, 2019). Furthermore, behavioral finance involves the ensuing impacts on markets. Thus, behavioral finance focuses on why investors are not rational; they are influenced by their biases and have self-control limits.  

Hence, interpersonal skills and behavioral finance are crucial to skill sets in the financial workplace.Therefore, interpersonal skills like effective communication are essential since they help foster and develop a strong working connection among employees and clients (Ahmed, 2019). Furthermore, these skill sets create a positive working environment, contribute to organizational productivity, and enhance teamwork. Interpersonal skills and behavior finance are critical for working and communicating with investors, clients, and other employees (Ahmed, 2019). Individuals with behavior finance and practical interpersonal skills seek to cover the rationality, account for behavior, and making financial investment choices. Therefore, understanding interpersonal skills and behavior finance helps avoid emotionally driven investments that lead to losses; hence, this devises an appropriate financial management approach.

Reference List

Ahmed, A., 2019. The Importance Of Interpersonal Communication In Business. [online] Bizfluent. Available at: <https://bizfluent.com/about-6460060-importance-interpersonal-communication-business.html>

Murray, J., 2020. What Is A Personal Financial Statement?. [online] The Balance Small Business. Available at: <https://www.thebalancesmb.com/overview-of-personal-financial-statement-4148190>