The seven numbers I would track as your household CFO

Imagine a household with a $500,000 retirement account, a valuable home, and just $2,000 in checking. Are they financially strong? Maybe. But if a pay period is missed, the immediate problem is cash, not net worth. One number cannot describe an entire household.

When a CFO looks at an organization, she looks at a small set of numbers together. A household deserves the same clarity. You can begin with seven. They are signals for asking better questions, not grades to compare with strangers.

1. Take-home income

Start with the money that actually reaches the household after payroll deductions. Add other dependable income separately. If income varies, use a conservative recent average and note the range. A salary printed on an offer letter cannot pay this month's bills; deposited cash can.

2. Core monthly spending

Include housing, food, utilities, insurance, transportation, minimum debt payments, and other costs that would continue through a disruption. Annual bills belong here too, divided by twelve. Core spending tells you the cost of keeping life running. It differs from the total you choose to spend in a normal month.