Bill still lives at his parents' house. He earns 900 euro per month. His surplus is 495. None of this changes until September.
But he wants to understand what September will actually look like before it arrives. So in May, four months in advance, he builds the model.
Projected income from September: 1,400. Projected outflows: rent 600 with bills included, food 250, transport 80, phone 25, subscriptions 30, social 150, miscellaneous 80. Total projected outflows: 1,215. Projected surplus: 185.
He reads the number twice. 185 euro per month. That is what will be left after everything is paid, on a salary 56 percent higher than today. Structural liquidity assessment measures the relationship between fixed commitments and available income over a sustained period. His stress ratio, fixed outflows as a percentage of net income, goes from 22 percent today to 53 percent in September. He is not in projected financial difficulty. But he is moving from a position of structural ease to one of structural tightness.
One unexpected expense of 400 euro will eliminate two months of surplus. He runs the scenario. He writes it down. He does not change his decision.
The model is not the reality. The reality starts in September. For now, Bill still has 495 per month and dinner with his parents on Sundays.
The tip
Model the next financial configuration before you enter it. The stress ratio tells you how much margin you are giving up. That is not a reason to stop. It is a reason to know before the month begins.
Structural liquidity assessment, May 2025: projected monthly surplus from September 185 vs current 495. Projected stress ratio: 53% vs current 22%. Bill still lives at his parents' house. The model is a simulation. September is the ledger entry.
Bill is 24. Every episode, we read his personal ledger through accounting eyes. / FY 2025 ledger