Cash flow is the movement of money through your accounts over time: paychecks and other income coming in, bills and spending going out, and the difference between them. It is about timing as much as totals. A month can be profitable overall and still have a week where rent is due and the paycheck has not arrived.
Cash flow and net worth are different measures. Net worth is a snapshot of what you own minus what you owe. Cash flow is the flow that changes that snapshot. Someone can have a high net worth and terrible cash flow (a paid-off house and no income) or a low net worth and strong cash flow (a new graduate with loans and a good salary).
For a household paid in pieces, cash flow is where planning lives. Salary arrives every two weeks; a bonus arrives in March; stock vests in February, May, August, and November. Bills arrive on their own schedule. Mapping the ins and outs onto a calendar shows which weeks are tight and which lumps can be committed to goals.
A simple example: $3,400 arrives on the 1st and 15th. Rent of $2,200 is due on the 1st, and the car payment, utilities, and insurance total $900 around the 10th. The first half of the month runs close to zero; the second half is where saving and spending room exists.
The common mistake is looking only at monthly totals and missing the timing. Allocate's safe to spend is a cash-flow number: what is free between this paycheck and the next after bills and goals are covered.