Cash flow is what most of us live by. If there is something left at the end of the month, we tend to figure that things are going well, and if not, then things are not going well.

But a startling number of people, including many well-educated, well-paid individuals, have only the vaguest notion of where it all goes.

With a sharp pencil, this form and a modest amount of record-checking, you can figure it out. "The usefulness of this, after you've got it more or less in balance, is that it will highlight areas where you can think about changing," said Dennis M. Gurtz, of Dennis M. Gurtz and Associates, a financial planning firm in Washington.

Gurtz, who supplied the work sheet, also warned that people who do this exercise often show a large cash surplus that doesn't really exist. It comes instead from ignoring a lot of small and not-so-small expenses that over a year add up to a lot of money.

The "acid test," he said, is this: If you didn't add significantly to savings or investment during the year, then you spent it. If that's your situation, be extra precise in doing the work sheet to track down your "lost" cash.

Income

The first step is adding up your income. You probably have a pretty good idea of it anyway -- most of us know what our salaries are -- but go through the exercise anyway to make sure you are not overlooking something.

Figures for both pay and investment income should be pretax, but investment income should be net of any expenses. For example, if you have a rental property include the cash (or loss, which you should enter as a negative number) remaining after all expenses are paid.

Expenses

Tracking down expenses is harder, but with your checkbook, loan statements and other such records you can come fairly close. This is not meant to account for every penny you spend, but it should account for almost all of your outlays.

If you complete the form and it shows a big surplus that you know you don't really have, review your cash expenses. If that doesn't do it, try keeping a detailed expense log for a few days or even several weeks to pin down the leakage.

It's amazing how much such seemingly insignificant costs as lunch in the company cafeteria and video rentals can total.

Committed expenses: These are outlays you must make -- obligations you have undertaken and cannot avoid without real loss or penalty, or goods and services you must have such as food, clothing and insurance.

First come your debts. List your mortgage, auto and any other loans you have. Be sure, though, that you include only the principal and interest payments.

Mortgage payments, for example, often include real estate taxes and insurance, which should be split out and entered on the proper lines below. The payment book or escrow analysis should show you how much of your monthly payment goes to the mortgage and how much to these other costs.

Charge accounts and credit cards, which should be included here, are a little tricky to account for because they represent both a loan and purchases that really belong in other categories. If you pay the account off at the end of each month, treat it as a group of purchases, rather than a loan, and enter the items on the appropriate lines.

If you carry a revolving balance, Gurtz suggests you look at several months' bills. Use the new charges incurred during each month to figure the amounts that should go under other expense categories. For example, if you bought a new suit two weeks ago and charged it, enter the cost of the suit under clothing.

Then look at how much you are paying to carry the balance on old purchases. That balance represents a loan and the cost of that should be included as a liability expense.

Income taxes: Your paycheck stub will help you here. Your employer will list the deductions taken out of your pay, and multiplying by the number of pay periods will give you a reasonable approximation of your tax bite.

Check last year's records, though, to ensure your withholding came close to your tax liability.

If you got a big refund or had to pay more tax when you filed, adjust your entries on this form accordingly. Also, note that Social Security taxes end at about $51,000.

Household expenses: These are usually substantial items that are paid by check, which makes tracing them easy. But look over a period of time to get representative figures. Utilities, for instance, are highly seasonal -- lots of electricity in the summer if you have air conditioning, lots of fuel for heating in the winter.

Food, clothing and transportation: These are the opposite of household costs in that they are often cash and hard to keep track of.

In addition to reviewing your checkbook and credit card bills, think carefully about outlays for cleaning, gasoline and the like. We are talking about real money here -- one of the prime suspects if you suffer from chronic disappearing bank balances.

Other committed expenses: This is where you pick up all those other costs of daily living that you have to pay, from toothpaste to visits to the hair stylist.

Under medical, dental and prescription drugs, include only that portion paid by you, not any parts that are paid by insurance. And as with other occasional costs, look at a long period so that, for example, one dental filling, if you rarely have trouble with your teeth, doesn't distort the picture.

Expenses paid in pretax dollars refers to employer-run programs that allow you to shunt some of your pay -- before taxesare taken out -- into a dedicated account or accounts to pay specific expenses. Some employers operate these accounts for child care, others for medical costs. If your employer has a "flex plan" for employee benefits, you may have quite a choice. Include only those you are using, and make sure you don't double count any expenses.

Total committed expenses: Add it all up. This is what it costs you to cover essential expenses of living.

Discretionary expenses: Unlike committed expenses, these are outlays you are not obligated to make. You may regard a vacation in the Caribbean as essential for your sanity, but as an economic matter you could skip it -- or go to Ocean City.

Be extra careful listing these. Many of these types of costs are paid in cash, and there is a natural tendency to understate the cost of things you want to buy or do so that they will be a little easier to justify.

Total discretionary expenses: This shows you how much you are spending on things you don't necessarily have to have. It's also where you will be turning first when the time comes to search for sources of additional savings.

Savings and investments: Remember, this is cash flow and not assets, so include only new money that goes into investment and savings, not the value of the assets themselves. And it should be a net figure -- if you draw down your savings, or expect to, subtract those withdrawals.

If you have money taken out of your paycheck for a retirement fund, such as a 401(k) plan, include that and any your spouse has as well. If you own mutual funds, stocks or any other investments that have dividends or interest automatically reinvested, include them. Total savings and investment: Add your savings and investment figures. Then add them to your total discretionary and fully committed expenses to get your total expenses.

Total expenses: If you've done this right, and you are living within your means, total expenses should match total income. If your income exceeds your expenses, money is accumulating somewhere -- such as your checking account -- and ought to be put to better use. If your expenses exceed your income, you are borrowing money, a condition that is tolerable, perhaps even necessary, in the short run, but cannot go on for very long. Negative cash flow is a real red flag.