An attendee once asked me in our financial class, “How can I increase my cash flow if my salary is just enough for our expenses and other needs every month?” It was also the same question that kept on bugging me before I started to be interested about personal finance. As I go all through these years of studying this matter, drastically increasing your cash flow just boils down to 2 simple ways which I will be sharing today.
Most of the time we do not notice that we are sometimes spending more than what we earn. By this alone, we cannot maximize the potential to increase our cash flow since it just goes to expenses. These are the things that sometimes we do not need in the first place. You might be familiar of the scenario of living from pay check to pay check and wishing that salary always come on time every pay day. Or else the family cannot cope up with the bills.
1. Reduce Your Expenses
The first way that you need to understand to increase your cash flow drastically is to reduce your expenses. By doing this, you become aware on the things you will purchase. A great exercise for this is to buy only the things you need and not the wants. If you really want to buy that “want”, you need to plan ahead for the purchase because these things can wait. You can also cut down on your expenses by preparing things on your own so that you minimize paying the people who prepare them for you. Like instead of eating out all the time, why not cook at home. Or instead of drinking coffee outside with friends, why not invite them at home and prepare the coffee there. You can have your 3-in-1 coffee instead of that expensive frappe.
“You cannot control what you cannot measure.”
Another thing you need to understand when reducing your expenses is the ability to prepare yourself a budget plan. For you to set this up, it is very important to identify where your money is going. You can do this by writing down all your expenses for a month. As they say, “You cannot control what you cannot measure.” So you need to measure first your expenses. I remembered the first time my wife and I did this, we are very uncomfortable since the feeling is like you are monitoring everything and you are being watched all the time. But after few months of monitoring, we then discovered the psychology behind it. Thus, we become more responsible and we felt the real freedom because we are taking charge of our finances. I know it will be very difficult at first but with determination and commitment, it can be done.
2. Look for additional income stream
The second way of increasing your cash flow is to look for additional income streams. You can have start up a business which you can set up this even if you are currently employed. You can also look around your house, you might not need some of your things which you can arrange for a garage sale. You can also make use of your spare time to earn additional income so that you will not just rely on a single income like salary every month. Make the time productive and do things that will in return generate money.
“If you want to achieve your dreams, do not just rely on salary alone.”
When I learned about this, I got involved in a part time business in the financial industry through International Marketing Group (IMG). The good thing about this business is that it rewards you whenever you reach out to families and share with them how to save and invest through financial workshops and personal financial strategy. This is somehow doing the business with a mission of teaching financial education. And the most rewarding part is the ability to help a lot of families to take control of their finances by educating them. Through this, I am earning additional income which I allocated to my investments and other businesses.
There are other means of earning additional income out there. Look for the things that you are interested or things that you are doing already, you may use them to generate income for you.
These powerful ways can make your cash flow shoot up drastically so that you can have sufficient income to allocate for your debts, setting up your emergency fund or even money for investment and proper protection.
PS. Do you want to increase your cash flow but do not know how to start? Register here for free financial class and personal financial strategy: http://goo.gl/forms/oWrwBuBtsh