Assets, Liabilities, and Cash Flow

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Jim Bedinger and Vivian Abraham attended the FOP Great Lakes Coalition meeting held in Indianapolis, IN, on October 3- 4, 2024.

Jim Bedinger and Vivian Abraham attended the FOP Great Lakes Coalition meeting held in Indianapolis, IN, on October 3- 4, 2024. ... See MoreSee Less

5 days ago
Today is National Thank a Police Officer Day! Wed like to take a moment to express our gratitude to the brave men and women who protect and serve. Thank you for your dedication and commitment to keeping us safe. #NationalThankAPoliceOfficerDay

Today is National Thank a Police Officer Day! We'd like to take a moment to express our gratitude to the brave men and women who protect and serve. Thank you for your dedication and commitment to keeping us s#nationalthankapoliceofficerdayerDay ... See MoreSee Less

3 weeks ago
Thank you for 30 years of service!! And counting …
Stay safe!

Thank you for 30 years of service!! And counting …
Stay safe!30 years and counting!

Denise Sledge has been a valuable part of the OCSO Communications team for three decades! Thank you for your dedicated service and for answering the call for so many years! We appreciate you!🌟👏
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1 month ago
Great work Officer Harris and K-9 Rocky! Thank you! Stay safe.

Great work Officer Harris and K-9 Rocky! Thank you! Stay safe.Great work Officer Harris & K9 Rocky and congratulations on being the District 5 Officer of the Month!!!
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Congratulations to Officer J. Harris and K9 Rocky of District 5, C Squad, who are being recognized as this month’s Officer of the Month.

Officer Harris recently completed a four-week K9 Handler course with his new partner, K9 Rocky. While attending K9 Handler school, Officer J. Harris and K9 Rocky conducted rigorous training to master working as a K9 Team. The curriculum is designed to equip handlers with the expertise needed for effective law enforcement. The curriculum focuses on narcotics detection, tracking, and evidence locating. Officer J. Harris and K9 Rocky have quickly become a unified team. Their combined efforts have led to the successful locating and apprehending of three suspects wanted in connection with felony incidents. Officer J. Harris and K9 Rocky have recovered not only two discarded firearms from fleeing suspects but also other discarded evidence pertinent to the crimes currently being investigated. Their work, including assisting with K9 callouts and routinely responding to 9-1-1 calls, has significantly contributed to maintaining public safety.

Thanks to Officer Harris and K9 Rocky for your hard work and dedication to protecting the Durham community. Excellent work!
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1 month ago
Great picture! Thank you, Deputy King and K9 Vito! Stay safe.

Great picture! Thank you, Deputy King and K9 Vito! Stay safe.Don’t mind us as we carry around "ruffly" 90 lbs. of K9 love.
Happy National Dog Day from Deputy King and K9 Vito!
#nationaldaydog🐾

📷 Nevada County Sheriff's Office
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1 month ago
We will Never Forget.

We will Never Forget.The Chicago Police Department offers our condolences to the family, friends, and coworkers of Police Officer Austin Machitar of the San Diego Police Department who sadly lost his life in the line of duty on August 26, 2024. Officer Machitar's partner was also injured in the crash and is currently listed in critical condition. Our thoughts are with the officers and their families. ... See MoreSee Less

1 month ago
Thank you, K-9 Haywire! Enjoy your well-deserved retirement with your handler, and stay safe!Image attachment

Thank you, K-9 Haywire! Enjoy your well-deserved retirement with your handler, and stay safe! ... See MoreSee Less

1 month ago
Great job! Thank you! Stay safe.

Great job! Thank you! Stay safe.Earlier today, when a kitten in Staten Island fell through the grates of a storm drain, concerned residents reached out to your NYPD cops. NYPD Special Operations ESU officers responded, and with help from NYC Department of Environmental Protection, they successfully brought the cat back to safety so it could dry up in today’s warm sun. ... See MoreSee Less

1 month ago
Welcome, K9 Raider and K9 Titan! Stay safe!

Welcome, K9 Raider and K9 Titan! Stay safe!Join us in welcoming K9 Raider and K9 Titan! 🐕

“The Gwinnett County Police Department is proud to introduce two new K9's into service. After completing their training in North Carolina, Raider and Titan will both begin work in the county. Titan will work with Cpl. Bartkowiak and Raider will work with Officer Copley. Both dogs are 2-year-old Belgian Malinois.”
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1 month ago
Congratulations! Thank you! Stay safe.Image attachmentImage attachment+1Image attachment

Congratulations! Thank you! Stay safe. ... See MoreSee Less

1 month ago
Hello, K9 Diesel and Officer Ryan Coll! Thank you! Stay safe.

Hello, K9 Diesel and Officer Ryan Coll! Thank you! Stay safe.Meet K9 Diesel and Officer Ryan Coll of the Metropolitan Nashville Police Department . Diesel is a half Belgian Malinois and German Shepherd and will be 4 on his next birthday. When he’s not working, Diesel LOVES spending time relaxing with his human siblings and mama at home. Photo by Erik Larson. ... See MoreSee Less

1 month ago
Congratulations and thank you! Stay safe!

Congratulations and thank you! Stay safe!Congratulations to Officer Dalton Koch!

We are proud to announce that Officer Dalton Koch has been selected as the O'Fallon Police Department's Officer of the Month for July. This recognition is a testament to his dedication, hard work, and commitment to serving our community. Please join us in congratulating Officer Koch on this well-deserved honor! 👏👮‍♂️
... See MoreSee Less

1 month ago
Congratulations and thank you! Stay safe.Image attachment

Congratulations and thank you! Stay safe. ... See MoreSee Less

1 month ago
Welcome!! Thank you! Stay safe.

Welcome!! Thank you! Stay safe.We welcomed a new recruit class at the Lexington Police Department Training Academy this week! For the next 30+ weeks, the recruits will cover topics that will help them Set the Standard.

Please join us in welcoming Recruit Class 08-2024 and thank them for choosing to serve our community!
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1 month ago
Great job, K9 Milo!!!! Thank you!

Great job, K9 Milo!!!! Thank you!Good Boy K-9 Milo 💙👏
#thankyouforyourservice

"K9 Milo of the Colorado Springs Police K-9 Unit was off duty this past Friday but that didn't stop him, or his Handler, from assisting with the capture of a fugitive.

Thank you Milo for doing such a great job which meant that everyone went home safe!"

📷 Running 4 Heroes- K9s
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#heroes #policedog #k9 #k9officer #workingdog #malinois
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1 month ago
Thank you, Officer Horvath, for your many years of service!!!!
Stay safe!

Thank you, Officer Horvath, for your many years of service!!!!
Stay safe!Congratulations to Officer Jason Horvath on celebrating 20 years of dedicated service with the Wentzville Police Department!

With 26 years in law enforcement, Officer Horvath has been an integral part of our team. From his work as a K9 Officer, Detective and service in the Cyber Crime Unit and now serving as a School Resource Officer for over 11 years, his commitment to our community is unmatched. As the lead advisor for the WPD Explorer Program, he's made a significant impact on the youth in our community. He's also been recognized multiple times, earning Employee of the Quarter twice and receiving the Optimist Club Award for his outstanding contributions to youth in the community.

Thank you, Officer Horvath, for your dedication and service! We are proud to have you on our team.
#WentzvillePD
#WPDServiceAwards
... See MoreSee Less

1 month ago
#HEROES!!!!
Thank you! 💙💙💙💙

#heroes!!!!
Thank you! 💙💙💙💙🐶𝗚𝗢𝗢𝗗 𝗡𝗘𝗪𝗦 𝗦𝗨𝗡𝗗𝗔𝗬🐶

Detectives from the Special Victims Section recently discovered six abandoned puppies on the side of the road. Covered in dirt and riddled with fleas, the puppies were quickly rescued!
Thanks to the swift action of our detectives and colleagues in the Criminal Investigations Division, the puppies have found loving homes. We’re proud of our team’s dedication and compassion!
... See MoreSee Less

1 month ago
Thank you! Stay safe!

Thank you! Stay safe!👏👏👏👏
Congratulations to Officer Michael Grund on achieving his one-stripe milestone, signifying 5 years of law enforcement service.

Officer Grund joined the Wausau Police Department in 2019 after graduating from the criminal justice academy at Northcentral Technical College in Wausau. Aside from his time with patrol, Officer Grund served as one of our Field Training Officers and is now a member of our Community Resource Unit, tasked with addressing neighborhood issues in our city. Thank you Officer Grund for choosing to serve our community and being a big part of our success as an organization!

*Background of Service Stripes: For every 5 years of law enforcement service, we present our staff with a gold service stripe to be worn on their long-sleeve uniform. Service stripes are small, but each stripe is significant and symbolizes a tremendous amount of positive impacts each officer has made in our community
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1 month ago
Congratulations! Thank you! Stay safe!Image attachmentImage attachment+1Image attachment

Congratulations! Thank you! Stay safe! ... See MoreSee Less

1 month ago
Congratulations! Thank you! Stay safe!

Congratulations! Thank you! Stay safe!CONGRATULATIONS to Officer Nicholet Gonzalez and Officer Madeleine King who graduated from Sauk Valley Police Academy BLE-5. ... See MoreSee Less

1 month ago

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Assets, Liabilities, and Cash Flow

Assets, liabilities, and cash flow…what are these things and why are they important to you?  Simply put, these are the aspects of your personal finances that you must understand if you are going to be able to develop a realistic budget and set achievable financial goals.

Identifying these elements of your personal finances will help you to determine your individual net worth as well as the amount of money you have coming in and going out, which in turn will help you to establish an effective budget for yourself and your family.

Let’s start by identifying and assigning a value to your assets.  Assets are defined simply as anything that you own that has an exchange value.  Common personal assets include your home, your car, savings account balances, savings bonds, deferred compensation (457b, 401k) plan balances, IRA’s, insurance, annuities, other investments, and personal items such as jewelry and household belongings.

Your most recent statements will clearly indicate the balance that you have accumulated in your savings, deferred compensation, and investment accounts and you should use these figures to assign a monetary value to these assets.

If you recently purchased a home, the purchase price is the value that you should use.  In most cases, you can figure the appreciation in the value of your home by estimating that it has increased in value by an average of 3% to 8% per year over the purchase price for the number of years that you have lived in the home.  If you want to figure the value of your home more precisely or you have reason to believe that your home has experienced above average appreciation, contact a local realtor and ask him or her to run a comparative market analysis for you.  This analysis will indicate what similar homes in your area have sold for in recent months.  This information is easy for realtors to obtain and they will typically provide the report to you at no cost.  If you happen to own additional property (2nd home, rental property, vacant lot), the same evaluation process applies.

Use the blue book or an equivalent guide in order to determine the value of your car.  Each guide will reference a few evaluations and ranges for each car.  For the purpose of this exercise, use the average trade-in value and be sure to properly account for the mileage and any options on the vehicle.

Assigning a value to certain insurance policies and annuities can be tricky because they are typically designed to be of value at some point in the future when a particular event occurs or a specified age is reached.  Some have what is referred to as a Cash Surrender Value, which is the amount of money the policy is worth today should you decide to cash it in prior to the designated maturity date.  If you have a policy with a Cash Surrender Value, use that number to determine the value of the policy in present day terms.  If a Cash Surrender value does not apply to the policy you carry, then you should not include the policy in your current asset valuation.

With regard to your personal belongings, it is generally acceptable to use a number between 25% and 50% of the original purchase price or value of the items.  These items are subject to depreciation in value not only because you and your family are using them, but also because they will only have an exchange value during a private sale or auction.  Potential buyers are only attracted to these types of sales when sale items are being offered at a significant discount.

If, however, you happen to own something that is subject to an appreciating value, such as certain artwork, unique jewelry, or a vintage car, the most recent appraised value is applicable.

Once you have gathered all of the information relating to your assets and completed the list of values, add them up and the result is the total current value of your assets.

Liabilities refer to your debts or obligations.  Common liabilities include mortgages, home equity loans (sometimes referred to as 2nd mortgages), car loans, credit card balances, other personal loans, and tuition or student related loans.

Most loan statements will clearly indicate the current balance owed, but the loan type dictates the actual amount of your current liability.

Many term loan statements, such as the ones that you receive for your mortgage, car loans, student loans, etc. include a payoff figure, which is the amount you would need to pay if you decided you wanted to pay the loan off in full during the current pay period.  The payoff figure is what you should use to assign a value to these liabilities because it is the current amount owed that determines the amount of your current liability.  In many cases, the payoff figure will be significantly less than the amount you would owe if you simply paid the loan off in accordance with the original term of the loan.

The total amount due and owing on your credit card statement, however, equals the exact amount of your current liability.

Another key factor to consider is that your liability begins at the point of purchase.  Many consumers take advantage of promotions that involve deferred and/or interest free payments on their larger purchases.  If you have made a purchase under these terms, you must include the amount you will owe on the payment due date in your current liabilities.  For the purpose of determining cash flow, however, you can exclude the amount owed from your cash outflow until the due date.

Some loans have either an early pay discount or penalty attached to them.  While it is necessary for you to be aware of these terms if they exist, they do not impact your current liability evaluation.

Once you have gathered all of the information on what you owe and completed the list of the related amounts, add them up and the result is the total current value of your liabilities.

You are now in a position to determine your financial net worth.  Subtract your liability total from your asset total and the result is your net worth.  The criteria we have used to determine your asset and liability values ensure that your resulting net worth calculation is tangible and realistic.

Whether your net worth is negative or simply smaller than you would like it to be, you have reached a point where you have identified specific contributors to your net worth and areas in need of focus and improvement. You are now in a position to set some achievable and applicable goals for yourself in order to increase your net worth.  A realistic, personalized budget will provide you with a map for achieving your financial goals.

There are two aspects of a budget, income (cash in) and cost (cash out).  Many people make the mistake of concentrating solely on the cost side of a budget.  In so doing, they emphasize costs for the general purpose of fitting their costs into their income.   The reality of cash flow is that it must flow in before it flows out.  It is, therefore, essential to first concentrate your efforts on understanding and maximizing your income.

While the art of maximizing your income is a detailed topic of its own, you can cover the basics just by being informed and making good, common sense decisions about what to do with your money.  Understanding your income involves developing an awareness of your income sources.  For most of the working world, there is only one source for any meaningful income that you earn and that is your job(s).  You can maximize the cash flow created by your employment income by developing a better understanding of the tax system, overtime laws, and issues that are unique to your line of work such as peak busy times or the seasonality of the product or service that your provide.  When you understand all of these factors, you will maximize your paycheck.

Once you have taken the steps necessary to ensure that you have as much cash inflow as possible, it is time to identify all of the cash outflows, and there are several.  Cash outflows or costs consist of mortgage payments, car payments, credit card payments, other loan payments, insurance costs, property taxes, utility bills, groceries and household supplies, clothing costs, and any miscellaneous spending money you need.  Look at a specific period of time, preferably a typical month, and itemize the cost associated with each of the above.

Compare your monthly net income, the amount that you actually take home during the course of the month, to your monthly expenses.  These numbers set the parameters and key components of what will become your household budget.

Ideally, the total of your monthly loan payments should not exceed 28% of your net income and your savings target should be around 10% of each paycheck.  These amounts vary from household to household depending on factors ranging from the number of dependents in the household to any alternative savings plans you have such as the amount you contribute to a 401k or 457b plan on a pretax basis.

If you think that you can realistically hit these targets, it may seem like the remaining 62% of your net income is yours to do what you want with, but don’t forget about the other expenses not already included in your loan payment calculation.  Insurance costs, utility bills, and groceries add up and are probably more costly than you think especially if you have never itemized them before.

There is one last question to answer.  What about the dreaded unforeseen circumstances life throws your way?  Take at least some of the stress created by these situations and have a contingency plan.  Put some money on the side for the blown furnace, the new transmission, and the flooded basement and bet that all of these things are lurking around the next corner.  Once you have done that, stop worrying because you’ve accounted for everything and, for once, your finances are under control!  The only thing left for you to do is remain disciplined and stick to your budget.

And, don’t forget, members of the Credit Union enjoy free and confidential Credit Counseling and Financial Planning through our Financial Planning and Education Center. We are here to assist you every step of the way.

Scott Arney
Chief Executive Officer
Chicago Patrolmen’s Federal Credit Union

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