How to Boost Your Personal Cash Flow

Over the years, I’ve noticed that one of the biggest reasons people fall into debt is poor cash flow management. To put it simply, cash flow is the relationship between how much money you have coming in each month versus how much you have going out. Ideally, you want the amount of money coming in to be greater than the amount coming out, but for a lot of people, this isn’t the case.

Luckily, there are 4 steps you can take to boost your cash flow and keep you from falling into debt.

1. Evaluate Your Income and Expenses

Look at how much you’re making and how much you’re spending each month. Dividing your expenses up into categories (restaurants, bills, fun money, etc) can help you to discover where your money is going every month and if you’re overindulging in certain areas. You might not think that much about the trips you take to McDonalds each month, but having a dollar sign attached to that habit might encourage you to reconsider your meal plans. Taking a little time to review your spending patterns can open your eyes to new savings opportunities and give your cash flow that much needed boost.

2. Make a Budget

Of course, recognizing saving opportunities is only half the battle. Once you’ve broken down your expenses, it’s time to realign your financial priorities and build yourself a budget. Allot yourself a set amount of money each month for each particular category and set up automatic savings or bill payments on your debts to keep yourself on track. If you need a little extra help, budgeting apps like Budget Jewel, Mint, and GoodBudget can help to simplify the process. 

3. Adopt Frugal Practices

If you’re looking for saving that extend beyond where you’re spending your money, then maybe you should look at what you’re spending your money on. Perhaps the next time you need a new TV or computer, you look into buying used as opposed to new. Maybe the next time you go grocery shopping you take a quick look online for coupons or other deals. You’d be surprised at how much more money you’ll have each month just by picking up a few frugal practices. 

4. Increase Your Income

While this might be the most difficult way to boost your cash flow, it can also be the most rewarding. When looking to increase your income, there are three paths you can take: ask your employer for a raise, seek out freelancing/side hustle opportunities, and sell your old or unused property. Regardless of which route you decide to take, proper planning and time management will be key to successfully increasing your income. Before asking for a raise, develop a thoughtful and persuasive argument as to why you deserve more money. If you want to pick up a side-job, make sure it’s in line with your current skill set and won’t distract you from your primary line of work or cut too much into your downtime. And if you’re looking to sell your old junk, make sure you pick the best service for distributing your wares (eBay, thrift shop, craigslist, etc). 

The key to keeping your cash flow in check is learning to live within your means. Of course, that doesn’t mean you need to abstain from acquiring all the things you want. Living within your means is more about practicing smart money habits, keeping track of your finances, and- most importantly -being patient.

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