5 Steps To Improving Your Personal Cash Flow

Does this ring true to you? – You have full time employment, pay all your bills on time –  but your savings account doesn’t seem to grow.  EVER.  Not only is it not growing but you don’t have any money in an emergency fund in case your car breaks down or your roof springs a leak.  Do you feel like you’re just treading water and breaking even month after month?  Or worse, are you spending more than you earn and racking up credit card bills?  Do you feel like you’ve lost control of your finances?  If that’s the case then you have a personal cash flow problem.

Sometimes we tell ourselves that there’s nothing we can do about it.  Everyone has money issues – right?  Unfortunately living in denial will make it hard or almost impossible to get ahead financially.  Until you’re out of debt (particularly credit card debt) you could be losing out on financial opportunities to help grow your wealth and ensure a solid financial future for yourself. Some of these opportunities include getting low interest rates on personal loans and mortgages as well as investing your savings for the future.

It’s never too late to take control and be the captain of your financial future.  Learning to take control of your finances is up to you and the more you know about where your money is going every month the sooner you can get started on a solid foundation.  Increasing your income by lowering your expenses is hard and it will take some work but no one said it was going to be easy.  Besides you’re ready to be your own captain, right?  Okay – so here we go…In 5 steps you can be on your way to having positive cash flow:

  1. WHAT ARE YOU SPENDING YOUR MONEY ON?
    Don’t just ask yourself where your money is going take a look at your monthly bank statements, credit card bills and monthly expenses.  Make a list of what your regular monthly expenses are such as rent, heating, car payments, etc., and then make a list of other expenses that tend to change from month to month such as groceries, eating out and entertainment. Is there anything you can do without?  Get rid of it!  Also – consider stashing away your credit cards so it’s less tempting to make that impulse purchase – either in a store or online.
  2. DOWNSIZE – ON EVERYTHING
    Simplify both your life and your finances by getting rid of things you don’t really need – like selling that exercise bike you only used once on Kijiji .  Look at all your stuff and think about what you need to keep and what you can do without.  You’ll not only make a little money but clear up some space for yourself in the process.  It doesn’t have to stop at selling things you no longer need.  Think about where you’re living.  Is it possible to downsize from a 2,000 square foot home in the city to a more modest bungalow or townhome in the suburbs?  Or if you’re renting would you consider a roommate to cut your rent by half?  If selling your home and moving is not an option think about renting that basement to a student or married couple.  You’d be surprised how quickly your savings will start to accumulate from all the new cash coming in.
  3. NEGOTIATE YOUR SALARY & GET THAT RAISE!
    Asking for a raise is probably the easiest and less time consuming way to try to increase your cash flow.  The problem is most people are either afraid to ask or feel uncomfortable discussing money with their managers.  As awkward as it may seem try to muster up the courage by hashing it out with your peers and assessing your worth and value to your employer.  If your employer is governed by a collective agreement you won’t be able to ask for a raise but you may be able to ask for a promotion to a higher paying position within the company.
  4. GET RID OF HIGH INTEREST DEBT
    Take control of your finances by tackling any high interest debt first.  This includes credit card and student loan debt.  If you have balances on multiple credit cards try to pay down the ones with the highest interest rates first (such as department store credit cards.) Once paid off, scale back to one or two cards only. If you’re having a hard time paying them off individually look into acquiring a debt consolidation loan from your bank.  You won’t know if you qualify unless you ask.  Don’t be afraid to ask – advice costs nothing
  5. STICK TO THE PLAN
    After you’ve done all the hard work and you’ve come up with a plan that you can work with – stick to it.  A monthly budget could be just the thing to keep you on track and stay motivated. Lastly, if all this seems a bit daunting consider speaking with a certified financial planner.
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