The net worth survey: accounts and opening balances in Cashfulness

In short

The survey is a snapshot of what you own and what you owe, on a given date: usually today. You don't have to rebuild the past; today's balances are all you need. You go through it category by category, enter what each thing is worth, and at the end the app shows you your first balance sheet, with the net worth you're starting from. The snapshot is taken only once: accounts that come along later, you add one at a time.

This page goes with lesson 2 of the free video course "Cashfulness step by step". The steps are in the same order as the video, and the button names are the ones you'll see in the app.

Watch the lesson

Before you start

You pick up from the "Let's snapshot your net worth" screen, where lesson 1 paused. At the top is the "Snapshot date", with a "Change" button if you need a different day.

One tip: give your accounts generic names, like Bank account, Card, Home mortgage. You don't need the name of your bank, or your own. Then press "Start the survey".

Category by category

Every category works the same way: tap a suggestion and the name is already filled in, type the "Current balance" and press "Add". Then "Next". If a category doesn't apply to you, press "Skip" and nothing happens. You don't need figures to the last cent: balances can be corrected later.

1. "Liquidity": checking account, cash, prepaid cards. Today's balance.
2. "Investments": funds, ETFs, shares, bonds, pension. What counts is the latest value on the statement, not how much you've paid in.
3. "Real estate": what your home is worth on the market today. A prudent value is fine. There's one extra question, the "Use": the home you live in is "Personal use"; a flat you let out is an "Investment", because it brings you an income.
4. "Movable goods": the car, the motorbike, something valuable. What you'd get if you sold it today, not what you paid for it.
5. "Receivables": money someone owes you.
6. "Short-term liabilities": debts to close within twelve months, like the credit card. The balance is what you owe today for what you've already spent on the card. If you've just paid it off it's zero, and you add the card anyway. Otherwise, check in your bank's app what your pending spending adds up to and enter that total.
7. "Long-term liabilities": the mortgage, a loan. Enter the debt that's left today, not the original amount.
8. "Income" and "Expenses": there's no amount to enter here. These are the drawers your salary, groceries and bills will go into. Switch on the ones that apply to you: they fill up as you record transactions, and you can add more whenever you like.

Before the preview, the app offers to mark some accounts with special properties, like an investment to revalue or a car that loses value. It's optional: you can press "Skip" and set it up later.

Your first balance sheet

"Here's your first Balance Sheet" opens. At the top, "Net worth": everything you own minus everything you owe. Below, your assets are split in two.

• "Assets+": what earns, either because it brings in a flow of money (rent, a coupon) or because it grows in value over time (a fund, an ETF).
• "Assets−": what you own and use, like the home you live in and the car.

The "Financial Independence Index" puts that distinction into a number: Assets+ divided by total assets. It tells you how much of what you have is working for you. The distinction between things that earn and things that cost comes from Robert Kiyosaki, the author of "Rich Dad Poor Dad".

Here's the survey from the video, Anna's family:

Assets of $233,200, liabilities of $136,000: net worth is $97,200. The financial independence index is 10,000 out of 233,200, which is 4%.

Press "Confirm and create the space". Behind the scenes the app records a double-entry opening transaction, so the books balance from day one. At the end you'll find the "Opening receipt", with the accounts created and your opening net worth, and the "Go to the dashboard" button.

One more account, later on

If you open a new account next month, or realise you've forgotten one, press "Create new" and then "New account". When you reach "Opening balance", enter the "Current account balance" and answer the question: "Does this money come from an account you already have in Cashfulness?"

• Yes, if you moved it from one of your accounts: it's an internal transfer and your net worth doesn't change.
• No, if it's a position you already had: the app asks "Since when have you had it?". The date stops wealth you already had from looking as if it grew this year.

Common mistakes

• The mortgage at its original amount. Enter the capital still outstanding today. You'll find it in the repayment schedule or on your latest mortgage statement.
• Counting interest as debt. Interest is a cost, and you record it when you pay it.
• A fund at what you paid in. What counts is what it's worth today.
• Leaving out the credit card because it's at zero. Add it anyway: you'll need it when you use the card.
• A forgotten account added as if it arrived today. If you already had it, answer No and put the real date in "Owned since".

Frequently asked questions

For the mortgage, do I enter the amount I borrowed?

No. Enter the debt left today, capital only: you'll find it in the repayment schedule or on your latest mortgage statement. Future interest isn't a debt you owe today.

I entered a wrong balance during the survey: do I have to redo it?

No. The survey creates an opening transaction that lives in the Register like any other: search for "Opening", open it and correct the amount.

I'm opening a new account next month: how do I add it?

From "Create new", "New account". If the account already holds money, the app asks whether it comes from one of your accounts or is a position you already had, and in that case since when you've had it.

The next lesson

Lesson 3 · Recording a transaction. An expense, some income and a transfer, and what double entry does while you only write how much and where.

In the manual

The chart of accounts chapter of the user manual explains how to give a balance to an account created after the survey, and how to correct a survey you've already done.

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Vittorio Giusti is an economist and psychologist, and he built Cashfulness.