Glossary
Cash flow
Cash flow is the money that came in minus the money that went out over a period. Positive cash flow means you finished the period with more than you started; negative means you drew down savings.
You measure cash flow over a window (a week, a month, a salary cycle) as the difference between income and expenses inside it. Transfers between your own accounts are not cash flow, because no money entered or left your position.
A month with positive cash flow and falling net worth points to an unrecorded liability, such as a card balance building up.
Related terms
- Net worthNet worth is everything you own minus everything you owe. In a personal finance app it is the sum of every account balance, converted to one currency, with debts counted as negative balances.Read
- Savings rateSavings rate is the share of your income you did not spend, expressed as a percentage. It is calculated as income minus expenses, divided by income, over the same period.Read
- Discretionary spendingDiscretionary spending is money spent on things you chose rather than things you were committed to. It is the part of a budget that can change next month without renegotiating anything.Read
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