Real estate · · 6 min read
A home and an overdraft: a valuable flat and a tight month
Own a flat and still overdrawn? See why net worth and monthly cash flow answer two different questions, and keep both numbers on one page without mixing them.
At lunch, a colleague mentions what their neighbours got for a flat just like yours. You run a quick sum in your head and something in your chest widens: ours must be worth far more than we paid. We're fine.
That evening, in the supermarket queue, a message from the bank: the account has gone past its overdraft limit. The twentieth of the month. Again.
Both numbers arrived on the same day, and they don't fit together. How can we be "well off" and overdrawn at once? Part of you concludes "we're bad with money". Another part concludes the opposite: "we own a flat, so this is temporary". Both conclusions make sense, and both miss what is actually happening.
Net worth vs cash flow: why both feelings are true
Part of you is proud of the flat, and rightly: it is years of work, a deposit saved up, a mortgage paid every month. You want to feel established, and a high value protects you from feeling like a failure. As long as the flat is worth a lot, the overdraft is just noise.
Part of you knows the month isn't working. You see the bank's message and feel its weight. You don't want to sell the flat; you want a calm end of month.
Both have a point, because they are answering two different questions. Net worth answers "what do we have". Cash flow answers "what is flowing in and out, this month". A flat is an asset you cannot pay the electricity bill with, and a value that went up doesn't put a single shekel into this month.
Mixing them up is not your fault. The economist Richard Thaler (1999) described how people split their money into separate mental "accounts" and treat each one differently. The flat sits in one account, the month in another, and each gives a different answer to "how are we doing?". Nobody shows us the two numbers side by side, so the overall feeling comes from whichever one we happen to be looking at.
Two numbers, two questions
| Aspect | Net worth | This month's free number |
|---|---|---|
| The question it answers | What we have | What's left until the end of the month |
| How often to look | Once a quarter | Once a week |
| What moves it | The property's value, the mortgage balance, savings | Income, fixed and variable expenses |
| Can you pay at the supermarket with it | No | Yes |
Net worth
- The question it answers
- What we have
- How often to look
- Once a quarter
- What moves it
- The property's value, the mortgage balance, savings
- Can you pay at the supermarket with it
- No
An illiquid asset: when the home starts funding the month
When the month won't close and the flat is worth a lot, leaning on the flat is a natural pull. The old answers sound like this: "we have security", "we'll clear the overdraft with a loan against the home", "this month was unusual".
According to Mako, all-purpose loans secured on a home rose 84% in a year (March 2026 against March 2025). That figure is background, not an explanation, and it has many possible causes. One possible reading is that some families are funding the month out of the home. If that is happening for you, or you have considered it, it says nothing about you. It says one number was missing.
There is no recommendation here to take or avoid a loan, to sell or to refinance; those are your decisions, and before any of them someone qualified can look at your specific case. What you can do on your own, right away, is see both numbers together. The article on getting out of overdraft without a loan covers the budgeting side of the same question.
Household liquidity: both numbers on one page
The direction is simple: both numbers on one page, each at its own pace, without confusing them, and without the flat's value deciding this month's shopping.
Step 1: write down your net worth. The flat's value minus the mortgage balance, plus savings. One number. The net worth article explains how to track it over time.
Step 2: write down this month's free number. Income minus expenses, with fixed expenses counted in full from the start of the month. It is not your bank balance; it is a forecast of what remains.
Step 3: spot the fixed costs the property itself creates. The monthly mortgage payment, the building committee (va'ad bayit), municipal tax (arnona), insurance, recurring upkeep. The home that raises your net worth is also what weighs on your cash flow, and both are true at once.
Step 4: a first target of positive monthly cash flow. Not big savings, not investing. Just a month that ends in the black. Everything else is built on that.
Step 5: a named cash cushion, separate from the property. A sum set aside, with its own name, so the next month that goes wrong doesn't lean on the home. The emergency fund article walks through building one gradually.
A named cash cushion, separate from the home
Time to the target
25 months
The block starts from an example only: a 20,000 ILS cushion at 800 ILS a month, which is 25 months. Move the monthly amount to what your month can really carry, and watch the number of months change. A slow pace still builds a cushion, as long as it holds.
In AlphaHome: the properties page shows the household's net worth (property equity, savings, trading capital and the accounts on the pension page) and how much of the flat is already yours. The dashboard shows "Free to spend until the end of the month", the daily pace and "Fixed charges still ahead this month". The mortgage payment is not written into expenses on its own, so it is worth entering it as a recurring fixed expense that the free number then includes.
When the month ends in the red again
You might do all of this and still get the bank's message next month. That doesn't mean the plan failed. It means it has started.
How to read it: cash flow improves over months, not within a week. One month in the red after you started tracking is information, not a verdict.
Today's step: check which fixed cost took you by surprise. An annual insurance charge that landed all at once? A higher building fee? Fix only that one today: enter it as a fixed expense, so next month it shows up in advance.
What changes for next month: if the surprise repeats, it isn't a surprise. It is a budget line that hasn't been written yet.
Another hard moment: one more conversation about "what the flat is worth now". It will come, at work or over a family meal. No need to argue with it. Just remember that it's the quarter's number, and quietly ask yourselves what this week's number is.
Proud of the home, calm at the end of the month
A rising value won't change the end of the month if the cash flow stays the same cash flow. That is not a threat; it is simply the arithmetic.
The new approach doesn't ask you to give up being proud of your home. It asks you to add one number beside it, smaller and more everyday. A household that tells apart what it has from what flows through it manages both, and doesn't let either one hide the other.
Next time someone at lunch mentions what the neighbours sold for, you can enjoy that number without letting it decide the evening's shopping. And that evening, in the supermarket queue, you will have the other number in hand: what is left until the end of the month.
This week, on one page, write the net worth from the properties page and this month's free number from the dashboard, and under each one a single line: what this number tells us.
Do one thing this week
Open AlphaHome, record this month's income and fixed charges, and see how much is really free to spend. Everything in this article starts from that number.