What counts as income, and what never does

This is the lesson that prevents the most confusion, so it is worth the five minutes.

The rule

Some money moves through your accounts without being earned or spent. Hitaji recognises these and keeps them out of your income and expense totals entirely:

• Transfers between your own accounts
• Loans — both taking one out and repaying it
• Savings contributions
• Opening balances on a new account
• Work expense settlements — being paid back for something
• Change collected from an earlier overpayment

Why this matters: borrowing money is not earning it. Without this rule, taking a loan would show up as a spectacular month of income for money that is not yours and that you owe back. Repaying it would then look like a spending disaster. Both readings would be wrong.

What this means in practice

Your balance falling is not the same as spending. Move money to savings and your current account drops — your expenses do not, because you have not spent anything. You still have the money; it is just somewhere else.

This catches people out most often when the numbers seem not to add up. They usually are adding up; they are just answering a different question than the one being asked of them.

Where the full picture lives

Net Worth is where all of it comes together — the page that counts what you own against what you owe. Assets include your accounts, money owed to you, savings, prepayments and things you own outright. Liabilities include money borrowed, credit purchases, subscriptions and pledges.

Income and expenses tell you about the month. Net worth tells you about the position. A good month can accompany a worsening position, and that is precisely the thing worth knowing.