# IOU: meaning and examples

Canonical URL: https://www.evenoutapp.com/glossary/iou
Updated: 2026-10-06

An IOU is a short written note, from the words I owe you, that acknowledges a debt. Dictionaries describe it as a written promise to pay money back, often just the letters IOU, the sum owed and a signature. It can be a napkin note, a text message or a balance in an expense app, and it is an informal record.

Key points:
- IOU stands for I owe you. Cambridge Dictionary defines it as a written promise to pay back a debt.
- Dictionary.com describes the informal version as the letters IOU, the sum owed and the debtor's signature.
- A napkin, a text message and an app balance can each serve as an IOU. A $25.00 IOU with a $10.00 payment leaves $15.00.
- One IOU is one debt. Shared bills create debts in both directions, and an $18 lunch against a $12 coffee nets to $6.

## What does IOU mean?

IOU stands for "I owe you", said as three letters. Cambridge Dictionary defines it as an "abbreviation for I owe you", meaning a written promise to pay back a debt. Dictionary.com defines it as "a written acknowledgment of a debt, especially an informal one consisting only of the letters IOU, the sum owed, and the debtor's signature". Oxford's learner dictionary marks the word informal.

Dictionary.com dates the word to 1610 to 1620. It is an informal record, and this page gives no legal advice about what one is worth.

## What do IOUs look like?

An IOU is whatever puts the debt in writing. Three common forms:

- **A note.** "IOU $18.00 for lunch. Jo, May 3." That is the dictionary version: the letters, the sum and a signature, plus a date and a reason.
- **A text message.** "I owe you $25 for the concert ticket. Sending it Friday." The message is the written record, and your name on it stands in for the signature.
- **A balance in an expense app.** In EvenOut, the friend page reads "Dan owes you $25.00". When Dan records a $10.00 payment, it reads "Dan owes you $15.00".

A part payment leaves the rest owed, whichever form the IOU takes: $25.00 less $10.00 is $15.00.

## How is an IOU different from tracking shared bills?

An IOU records one debt in one direction, while shared bills create many small debts that run both ways and cancel each other. You pay $18 for Dan's lunch, and later Dan pays $12 for your coffee. Two separate IOUs would say Dan owes you $18 and you owe Dan $12. One balance says Dan owes you $6, because $18 minus $12 is $6.

That netting is the job of a running balance. It is why a friend who borrows often is easier to track in an app than on a stack of notes. To work out the net between several people, see [who owes who](https://www.evenoutapp.com/guides/who-owes-who) and the [who owes who calculator](https://www.evenoutapp.com/tools/who-owes-who-calculator).

The act of paying an IOU off is [settling up](https://www.evenoutapp.com/glossary/settle-up). For a printable version of the note, with a payments log, use the [IOU note template](https://www.evenoutapp.com/templates/iou-note).

## Frequently asked questions

### What should an IOU say?

The dictionary form is the letters IOU, the sum owed and the debtor's signature. Adding a date and a reason makes it easier to match later, because "IOU $18.00" on a napkin does not say which lunch it was for.

### How do you record a part payment on an IOU?

Write the payment and the new balance under the original. On a $40.00 IOU, a $15.00 payment leaves $25.00. In EvenOut, Settle up accepts a partial amount and tells you how much will still be owed.

### What is the plural of IOU?

Cambridge Dictionary gives IOUs or IOU's. Dictionary.com lists the word as IOU or I.O.U., so either spelling is fine. Pick one and use it the same way throughout a note.

## Sources

- [Cambridge Dictionary: IOU](https://dictionary.cambridge.org/dictionary/english/iou)
- [Dictionary.com: IOU](https://www.dictionary.com/browse/iou)
- [Oxford Learner's Dictionaries: IOU](https://www.oxfordlearnersdictionaries.com/definition/american_english/iou)