Your Money on One Page

The story: Ana and Marcus put it all on one page

Ana and Marcus sit at a kitchen table with one sheet of paper that lists what they own, what they owe and what comes in and goes out each month.

1. Narrator: Ana and Marcus have a house, two jobs, a car loan and a few accounts. They’ve never seen it all in one place.
2. Ana: Let’s list everything we own first: the house, our retirement accounts, savings and the car.
3. Marcus: Then everything we owe: the mortgage, the car loan and the card.
4. Narrator: Own minus owe is their net worth. It’s a snapshot of where they stand today.
5. Marcus: Our net worth is smaller than I hoped. Most of the house still belongs to the bank.
6. Narrator: That’s common with a mortgage. Net worth is a starting line, not a grade. The second number is cash flow: money in minus money out each month.
7. Ana: So net worth is the snapshot, and cash flow is the part we can change this month.
8. Narrator: Own minus owe is where you are. In minus out is where you’re going.

What you’ll learn

1. Net worth: the snapshot

   Net worth is everything you own (your assets) minus everything you owe (your liabilities). Assets include savings, retirement accounts and what your home or car would sell for. Liabilities include a mortgage, loans and card balances.

   Example: own $420,000, owe $310,000. Net worth is $110,000.

2. A low or negative number is a starting line

   Plenty of people in their 30s and 40s have a small or negative net worth because of a mortgage or student loans. That isn’t a grade. What matters is the direction it moves over the years, compared with your own plan.

3. Cash flow: the lever you control

   Cash flow is money in minus money out each month. A positive number lets you save and pay down debt. Cash flow moves faster than net worth, so it’s the number you can change soonest, by earning more or spending less.

4. Check both, a few times a year

   Daily checking adds worry without adding much information. A few check-ins a year show the trend. Many people start a yearly money check-up list here, with “re-read both numbers” as the first item.

Key words

net worth

what you own minus what you owe

cash flow

money in minus money out each month

asset

something you own that’s worth money

liability

money you owe

Common questions

Should I count my car as an asset?

Yes, at what it would sell for today, not what you paid. Its loan goes on the owe side.

How often should I check these numbers?

A few times a year is plenty for most people. The trend over time tells you more than any single day.

Remember this

Own minus owe is where you are. In minus out is where you’re going.

Try it: Put your money on one page

1. On one sheet, list what you own and what you owe, with rough amounts.
2. Subtract to get your net worth.
3. Write your monthly take-home pay and your monthly spending, and subtract to get cash flow.
4. Start a yearly check-up list with “re-read both numbers”.

No account needed: do it on one sheet of paper, or try the free Net Worth Calculator.