Transparency
How we calculate
Every number on your results comes from the amounts you enter, using the formulas below. Estimates are fine. Nothing is pulled from your bank, and nothing is invented.
Your Margin Check score
Seven statements, each rated 1 (“Not like me”) to 5 (“Very much like me”). Your score is the total, from 7 to 35. It describes your answers about habits and feelings. It is shown separately from your numbers and is not a measure of your actual financial security.
- 29–35: Margin Builder. Your answers point to strong margin habits. Protect them. If your numbers agree, you may be in a position to take on more investment risk.
- 20–28: Just Enough. Your answers suggest the bills get paid, but one surprise could bring real stress. Small, steady moves will build your margin.
- 7–19: Running on Empty. No judgment. Everyone starts somewhere. Your answers suggest margin is thin right now, so keep any investing conservative while you build it.
Monthly cash flow
Use take-home pay (after taxes and payroll deductions) and what actually leaves your accounts each month. Full loan payments go in their category (a mortgage in Housing, a car payment in Transportation). Yearly or irregular costs are divided by 12. Savings are tracked separately and are not an expense.
- Total Monthly Income = the four income lines added together
- Total Monthly Living Expenses = the ten expense categories added together
- Monthly Cash Available Before Savings = Total Monthly Income − Total Monthly Living Expenses
- Remaining Unallocated Cash = Monthly Cash Available Before Savings − Planned Monthly Savings
- Monthly Cash Margin % = Monthly Cash Available Before Savings ÷ Total Monthly Income × 100
- Savings Rate % = Planned Monthly Savings ÷ Total Monthly Income × 100
- Debt Payment Burden % = Monthly Debt Payments ÷ Total Monthly Income × 100
Credit cards, counted once. Purchases go in the category they belong to, even if you paid with a card. Don’t add the card bill as well. Payments toward an older balance you carry go under Other Expenses.
Debt payments, counted once. You also tell us how much of your expenses are loan and card payments. That number is used only for the Debt Payment Burden. It is already inside your expenses and is never added a second time.
Personal balance sheet
- Total Assets = the six asset lines added together
- Total Liabilities = the four debt lines added together
- Net Worth = Total Assets − Total Liabilities
- Liquid Financial Reserves = Cash and Savings only. Home equity, retirement accounts and other investments are not counted, because they aren’t readily available in an emergency.
- Essential Monthly Expenses = the expense categories you mark as essential (Housing, Utilities, Food, Transportation, and Healthcare and Insurance unless you change them), or your own estimate if you enter one
- Emergency Reserve Months = Liquid Financial Reserves ÷ Essential Monthly Expenses
Your guidance condition
These are practical guidance categories, not judgments about you or your success. The rules were set by Joe Watkins and are applied exactly as written:
- Financial Deficit: Monthly Cash Available Before Savings is below $0, or Emergency Reserve Months is below 1. Focus: essential expenses, steadying cash flow, and high-priority debt.
- Financial Growth: Monthly Cash Margin is 15% or more, and Emergency Reserve Months is 6 or more, and Credit Card Debt is $0. Focus: investing, income-producing assets, leverage and long-term sustainability.
- Financial Stability: everything else. Focus: reserves, consistent saving, managing debt and growing your margin.
Deficit is checked first. The rules compare exact values; the numbers on screen are rounded (for example, 5.99 months shows as “6.0” but does not count as 6).
Blank, zero and negative entries
- Blank fields inside a section you filled in count as $0. If a whole section is blank, the results that need it show as Unavailable.
- When we had to assume $0 for something (for example, no savings amount or no debts entered), the result is marked Estimated and says why.
- Percentages are shown only when the number we divide by is more than $0. With $0 income, margin, savings rate and debt burden are not shown. With $0 essential expenses, reserve months are not shown.
- Negative entries aren’t accepted; every amount must be $0 or more. Results can be negative, such as spending more than you earn or owing more than you own, and are shown with a minus sign.
- If one guidance test can’t be run because its numbers are missing, the condition comes from the tests that can be run and is marked Estimated. If neither cash flow nor reserves can be calculated, no condition is shown.
Your three next actions
Your next actions are chosen by fixed rules from your own results, in this order of priority: closing a monthly gap, building a one-month starter reserve, credit card debt, growing reserves toward six months, raising your margin toward 15%, automating savings, vehicle loans, and the Margin Check statement you rated lowest. Growth households get investing, leverage and stewardship actions. If a section is missing, the first action asks you to fill it in.
Calculation version 1.0.