Documentation

Adding and Managing Liabilities

The LiabilitiesModal is used to record a household's debts, such as mortgages, loans, and credit cards. Accurately capturing liabilities is essential for understanding a client's net worth and for modeling debt repayment in financial plans.

Accessing the Liabilities Modal

From the Household Overview page, you can find the "Assets & Liabilities" section. Clicking the "Add Liability" button will open the modal. You can also edit an existing liability by clicking the pencil icon next to it.

Inputs

  • Name: A descriptive name for the liability (e.g., "Main Mortgage", "Car Loan").
  • Type: The category of the liability. Options include:
    • Mortgage
    • Car Loan
    • Personal Loan
    • Credit Card
    • Student Loan
    • Business Loan
    • Tax Debt
    • Other
  • Amount: The total amount of the liability.
  • Interest Rate (%): The annual interest rate on the debt.
  • Lender: The financial institution that holds the debt.
  • Payment Amount: The regular payment amount.
  • Payment Frequency: How often payments are made (Weekly, Fortnightly, Monthly, etc.).
  • Loan Type: For certain loan types, you can specify if it is "Principal and Interest" or "Interest Only".
  • Linked Asset: You can link a liability to a specific asset (e.g., linking a mortgage to a property).
  • Details: Any additional notes about the liability.
  • Add as expense: A checkbox to automatically create a corresponding expense entry for the loan repayment.

How It Works

Liabilities are subtracted from assets to calculate a household's net worth. When you use the "Create Scenario Automatically" feature, the debt value for properties is populated from the linked liabilities.

Linked Expenses

For liabilities with regular repayments, you can automatically create a linked expense entry.

  • If you check "Add as expense", a new entry will be created in the Expenses table.
  • This entry will be linked to the liability, ensuring that the loan repayment is accounted for in the household's budget.
  • This feature helps to ensure that all debt obligations are accurately reflected as expenses in the financial plan.