Cash Flow
The money coming in versus going out over a period — the day-to-day engine of saving and spending.
Cash flow is the movement of money into and out of your finances over a period: income coming in, expenses and savings going out. Positive cash flow — earning more than you spend — is what funds investing and debt paydown; negative cash flow erodes savings or adds debt.
Understanding cash flow is often more actionable than net worth, because it's where decisions actually happen month to month. A Sankey-style cash-flow diagram makes it visual, showing exactly how each dollar of income splits across taxes, spending categories, and savings — and where there might be room to redirect money toward your goals.
This definition is general information to help you understand a term, not financial, tax, or legal advice. Figures that change year to year (limits, thresholds, rates) should be confirmed against current official sources. For guidance on your situation, a licensed fee-only fiduciary is the right next step.