"Am I getting ahead?" The one number to check every month

Ask most people whether they're doing better financially than they were six months ago and they'll check their bank balance. It's the number they see most often, so it feels like the scoreboard. But it's a surprisingly poor one.

Your chequing balance can go up while you're falling behind — if you've been putting more on your credit card to keep the cash. It can go down while you're getting ahead — if you just paid off a big chunk of a card. On its own, it doesn't answer the question.

Meet free cash

A far better monthly check is what I call free cash: the money in all your bank accounts, minus what you currently owe on your credit cards. It answers a simple question — if you paid off every card today, how much would be left?

Track it once a month, on the same day, and the trend tells you whether you're getting ahead. Rising free cash means you're spending less than you earn. Falling free cash means you're not, no matter what the chequing balance says.

Why not net worth?

Net worth — everything you own minus everything you owe — is the classic measure, and it matters over the long run. But for monthly tracking it's noisy. Home values and investment balances swing with markets you don't control, and it can hide a spending problem behind a good year on the stock market. Free cash moves only when your own habits change, which makes it a much better month-to-month signal.

Add months of cover

The second number worth a glance is how many months your cash would cover your essentials — rent or mortgage, utilities, groceries, insurance, minimum payments — if your income stopped. One month means you're one surprise away from the credit card. Three to six months is a common target, though the right number depends on how stable your income is.

What to do with the answer

If free cash is falling, look at the last two months of statements for what changed: a new subscription, a car repair that went on the card, a gradual drift in groceries or takeout. If it's flat, a small automatic transfer to savings the day after payday will usually tip it upward. And if it's rising, congratulations — decide where the surplus should go next, whether that's paying off a card, building your emergency fund or saving for a goal.

SmartSpend AI calculates free cash and months of cover from the statements you upload, month by month, so you can see the trend at a glance instead of rebuilding a spreadsheet every time you wonder how you're doing.