In addition to understanding your cash flow, understanding where you are today is important as well. Putting together your balance sheet (aka Net Worth Statement) is how you do this. You need to put together a list of all of your assets and all of your liabilities.
Group all of your assets together and add them up.
Group all of your liabilities together and add them up.
Subtract your liabilities from your assets and this will tell you what your net worth is.
Below is an example of a Balance Sheeet:
Assets
Checking account = $5,000
401k = $10,000
IRA = $15,000
Roth IRA = 20,000
Health Savings Account = $5,000
Taxable Investment Account = $25,000
Home = $300,000
Car = $25,000
Total Assets = $405,000
Liabilities
Mortage on Home = $250,000
Loan on Car = $15,000
Total Liabilities = $265,000
Net Worth = $140,000
Notice that there are no credit cards in the balance sheet above. This is because it is assumed that if you are using credit cards, you are paying off the full balance each month and only using the credit cards to accumulate rewards or cash back. You should not be investing yet if you are still holding a credit card balance past a month.