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My Money & Me

Adults / Money basics

Chapter 3 of 4

Cash flow: the monthly picture

Income in, money out, and the one ratio that tells you if you are winning.

My Money & MeUpdated Oct 10, 20268 min

Chapters in this module
  1. 1Budgeting: give every rupee a job
  2. 2The emergency fund
  3. 3Cash flow: the monthly picture
  4. 4Setting goals that money can measure

Net worth is a photograph; cash flow is the film. A household can own property and still be in trouble if more goes out each month than comes in. The monthly cash-flow statement is the simplest financial document you will ever make, and the most useful.

Build it in three lines

  • Income: all take-home pay, rental income, interest and dividends, averaged over the year.
  • Fixed outflows: EMIs, rent, premiums, school fees, subscriptions.
  • Variable outflows: food, transport, lifestyle. The difference is your surplus.

The ratios

  • Savings rate = surplus ÷ income. Target 20% or more.
  • EMI-to-income = all EMIs ÷ income. Keep under 35%.
  • Essentials share = fixed plus essential variable ÷ income. Under 50% leaves room to breathe.

Savings rate

Defaults come from the India rule pack india-2026-27.v1. Change any of them.

₹

₹1 L

₹

₹60,000

Savings rate

40%

Monthly savings
₹40,000

Educational estimate. Returns are not guaranteed; taxes and charges are not included unless stated. · india-2026-27.v1

Key takeaways

  • Cash flow is the film; net worth is the photo.
  • Three lines: income, fixed, variable.
  • Savings rate 20%+, EMI under 35%.

Check your understanding

  1. 1. What does the EMI-to-income ratio measure?