October 8, 2020
By Rahul Iyer
Cash flow is the difference between the money you bring in and send out each month. Just because you make ‘a lot’ of money in your opinion, doesn’t mean you have a great cash flow. If you spend too much, you may have less than you think.
If you think outside the box though, you can find simple ways to increase your cash flow, making it easier to invest for retirement or save for any other financial milestone. It’s a good idea to reevaluate your cash flow at least once a year to see where you stand.
Check out the top 5 ways to improve your cash flow today.
No one likes asking for a raise, but it’s the fastest way to increase your cash flow. If you’ve done a spectacular job and feel you’re worth the raise, gather your reasons, ask your boss for a meeting, and ask. What’s the worst he/she can say?
If the raise doesn’t work out or you know it’s not in the cards, consider starting your own side hustle. You don’t have to answer to anyone but yourself, which means you can make as much or as little as you want. Work as a consultant, freelancer, or even just start a little gig cutting lawns – do anything that provides a service or product to others that’s needed.
It sounds counter-intuitive to pay off debts to increase cash flow, but debts are killing your budget. Look at your interest rates, are you paying 15% - 25% in interest? Think of the opportunity cost of what you’re paying. Choose a debt, pay as much as you can toward it and get out of that high interest debt to increase your cash flow.
If your employer matches your 401K contributions, don’t skip it. If you can’t afford it, get a low-cost advance to take advantage of your employer’s match. You can take the fee right from the employer’s match or pay it out of your own liquid funds – either way, it’s a win-win because you get more money in your retirement account and that’s really when cash flow matters.
You may not even have to do anything to increase your cash flow except change your budget. If you’re overspending, you may have more cash than you realize. See where you can cut expenses. Whether you’re paying too much for insurance, overpaying on utilities, or can cut out frivolous spending, you can improve your bottom line and have more financial freedom.
It’s not hard to increase your cash flow, it just requires a little creativity and consistency. Life is expensive, but when you stay in control of your cash flow, you’ll know where you stand and how you can have more cash flow by either bringing more money in each month or sending less money out.