In addition to checking and repairing your credit, several other areas of personal finance require your attention while you are in school. The better you are able to deal with personal financial matters now, the easier it will be for you to obtain a loan for your business and keep your own finances in order when you are in practice.

• Prepare a personal financial statement. After checking your credit, your banker will ask you about your assets and liabilities, so you’ll need to have this information ready to discuss.

The personal financial statement (PFS) lists your assets (the things you own that have value, such as a car or savings bonds) on the left, and the amounts you owe (credit card debt, student loans, car loan) on the right.

You will need to begin gathering information about these items, including loan numbers, estimated current market value (for your car, for example), the make and model of the car, the names and addresses of lenders, etc.

Note that you must include the total current amount of your student loans (you will also see these loans on your credit report), even though you don’t have to pay them back until after graduation.

Here is a simple Personal Financial Statement (in Excel format), and here is one that the SBA uses: SBA Personal Financial Statement. You’ll see that the SBA statement is very complex and includes a lot of information you may not have or need. However, you should be familiar with its content and attempt to provide as much information as possible.

At the bottom of the PFS is your “Net Worth” (assets minus your liabilities); don’t be discouraged if this is a large negative number. The banker knows you have a lot of debt and not many assets. He or she wants to see what you own and what you owe, before adding in your business loan.

Prepare your PFS now and keep it up to date. Check it every six months and make changes as necessary (What is your student loan amount now? Did you buy a new car? What are your credit card balances?), so when you get ready to talk to a bank, all of this information is current.

• Begin to minimize your student loan debt. Set aside money to use for a business loan. Note: You may not invest your student loan disbursements; they are to be used for living expenses while you are in school. But you can work during school and save this money for your contribution to your business loan.

• Get your financial life in order. To prepare financially for the realities of having a business, it’s important to get your financial life in order.

The following principles can help guide you while you are in school so you can have an easier time getting a loan and being financially successful in practice:

7 STEPS TO GOOD MONEY MANAGEMENT

These principles come from Bankrate.com (www.bankrate.com), a good source of financial advice:

1. Pay bills on time to avoid late fees.

Good articles to read:

• Organize due date to pay on time;
• Avoid the penalty punch;
• Your credit card statement made simple

2. Pay more than the minimum on your credit cards.

Good articles to read:

• Calculate the true cost of paying the minimum;
• Tips for spending less, saving more;
• 15 credit card terms

3. Read your bank statement regularly.

Good articles to read:

• Anatomy of a bank statement;
• 7 ways to keep your account in check;
• 10 most common checking account terms

4. Build savings for emergencies and for business startup collateral.

Good articles to read:

• FAQ about emergency savings;
• Tips for kicking off a savings plan;
• Calculate what it'll take to save for a goal

5. Shop around for the best insurance rates and coverage.

Good articles to read:

• The basics of car insurance;
• 19 ways to save on auto insurance;
• More insurance advice

6. Look around for and switch to credit cards with lower rates.

Good articles to read:

• How to transfer a balance safely;
• Ask for a lower credit card rate;
• More on credit cards

7. Follow a monthly budget.

Good articles to read:

• Develop your own spending plan;
• What's your spending style?;
• Money-saving tips

Finally, if you want to have less stress, less student loan debt, and more money for practice startup, remember two key phrases:

• LBYM — Live below your means
• DSATM –— Don’t spend all the money

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