Cash flow is the film of which net worth is the photograph. In: salaries, invoices paid, dividends. Out: fixed (housing, insurance, loans), variable (food, leisure) and the annual items almost nobody spreads out (tax, insurance renewals, car servicing).
The classic mistake is not overspending but forgetting irregular expenses. A monthly budget that ignores the $1,800 arriving once a year is out by $150 a month and does not know it.
Tracking actual cash flow for three months is the highest-return exercise in all of personal finance: it almost always reveals one or two significant spending categories nobody would have guessed.