Cash Flow
The net amount of money moving in and out of your accounts
What You Need to Know
Cash flow represents the difference between money coming in (income) and money going out (expenses). Positive cash flow means you're saving money, while negative cash flow means you're spending more than you earn.
Types of Cash Flow:
- Positive: Income > Expenses (saving money)
- Negative: Income < Expenses (losing money)
- Neutral: Income = Expenses (breaking even)
Key Metrics:
- Monthly cash flow (income
- expenses)
- Annual cash flow (12 × monthly)
- Cash flow margin (cash flow ÷ income)
Improving Cash Flow:
- Increase income (raise, side hustle, investment)
- Reduce expenses (budget cuts, negotiation)
- Optimize timing (bill due dates, pay periods)
Example: $5,000 income - $4,200 expenses = $800 positive cash flow
Sources & References
This information is sourced from authoritative government and academic institutions:
- consumerfinance.gov
https://www.consumerfinance.gov/consumer-tools/money-as-you-grow/
Related Calculators & Tools
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50/30/20 Rule
A budgeting guideline allocating 50% to needs, 30% to wants, and 20% to savings
Analysis Paralysis
Overthinking choices until you miss the window to act.
Automated Savings
Setting up automatic transfers so saving happens without willpower.
Behavioral Finance
The study of how emotions and mental shortcuts influence money decisions.
Budget
A spending plan that tracks income and expenses to ensure you're living within your means and working toward financial goals.