Nicola Cairncross recommends:  If you want to get control of your money, and discover whether you are going in the right direction financially, I highly recommend the Cashflow chapter in The Money Gym ebook (see pic on right for link).

There are two elements to good financial control;  one is to keep on top of and manage your cashflow, and the second is to take a quarterly snapshot of your assets, liabilities, income, outgoings, and overall net worth.  Both of these can be easy to do, with the right (simple) tools. 

Do not disappear up your own derrieres with details, on this one folks!  Remember what one of my first financial mentors, Gill Fielding always says, the best deals can be worked out on the back of a fag packet,and so it is with keeping control of your finances.

On the spreadsheet front, the one on P12 of the book is the old one we used to use, and it’s very good still.  But we now use a different one for our own accounts, one given to us by Greg Ballard of Passive Investments (www.AskNicolaCairncross.com/Recommends/Passive in case you don’t know them - I’m happy to take advice from someone who can take £10k on a credit card and turn it into over £30 million in property in just 10 years!!)

Here is a link to the page on the club site - Module 3 Cashflow - where, if you are a Silver or Gold member, you can download all spreadsheets to have a look and use yourselves.
http://www.themoneygymclub.com/articles/20070331

On the assets and liabilities front, the Rich Dad Cashflow 101 game has the best simple version of a Net Worth statement I have seen.  Do you have the game? 

There may be a picture of the Net Worth Worksheet in the “Rich Dad” book if you have that?  Here’s a link to buy it on Amazon…….

If not, here’s a brief explanation.

Take a sheet of paper and divide it in four, but create an extra section at the bottom of the top right square - this is for the totals and net worth figure.

Bottom right, list your liabilities, and the amounts paid monthly to service those liabilities.  Add up totals of both and note down.

Bottom left, list your assets, and the amounts brought in by those assets (passive income).  Add up totals of both and not down.

Top left square, list your outgoings and bundle together into broad catagories, if many and varied.  Bring over outgoings from liabilities from bottom right square.  Add up total outgoings.

Top right square, list your gross earned income and then list any passive income from assets seperately (pull from bottom left square).  Add up total income.

In the middle right section, take your total income from your total outgoings to get your net monthly cashflow surplus or debit.

Goal No #1 - create a surplus cashflow per month to invest with.
Goal No #2 - increase that cashflow
Goal No #3 - reduce outgoings
Goal No #4 - increase income from passive sources (assets) to the point where it covers your outgoings.