Tips on How to Manage Your Personal Cash Flow
How to Manage Your Cash Flow
Managing money is making the most of what you have, and managing your cash flow is a great place to start. Cash flow is basically how you are spending your hard earned money. Why not plan and adjust your expenses so that your immediate needs are covered, but also allow for some money to have a little fun with or even better, to invest with?
Our finances are always in constant motion, as we see it going out as soon as we seem to get it. Whether from a job, your investments, or other means, that money can have a way of disappearing rather quickly. You can't help what your needs are, like shelter, food and clothing. Taxes, and insurance, transportation, and health care are other big ones. Thus the constant "flow", in and out.
One thing that is necessary to manage your cash flow is a budget. Having a budget can help you balance the cash flow and help maximize it to your best possible advantage. At the very least, you want to make sure to have the amount coming in to your cash flow, exceed that money that is going out. To not do this invites trouble, debt and loss of money.
Consider Investing to help Cash Flow overall
Even if financial planning doesn't come easily to you, it is in your best interest to consider not only having a budget, but to consider at least some low risk investments. If not now, consider them for later on perhaps after paying off your credit card debt, etc. It can help your cash flow over time.
Some financial experts suggest investing anywhere from five to ten percent of your income (gross), and doing so regularly. Its not a bad idea to do it each time you get paid. By reinvesting the interest you earn, dividends, and other investment incomes, you will literally build your net worth a lot more quickly. Since that is the goal or bottom line for many people, why not start as soon as you can?
Investing - How to Really Begin
There are some things to consider when you are thinking seriously about investing, like where is the money going to come from? First, I would consider paying off your credit card balance, like I mentioned before. The reason is that the interest you would be making on an investment would have to be far greater than the interest you are paying (which is likely high) on your credit card. It would be futile to not first pay off your credit card, you wouldn't really be moving forward at all. One good tip is that once you pay off your card or cards, put the amount you were paying into interest, into an investment account. You won't really miss that and be building your net worth.
Consider reinvesting the money you make on your investments. This can often be done automatically, so ask about that option.
On those occasions where you receive monetary gifts, or if you get money from doing an extra job or from overtime, put that right back into investments. Again, you won't miss it, and be making your money work for you.
Some have a certain percentage of their work pay deducted from their paycheck and put right into an retirement plan that is employer sponsored. Others, when writing checks for household or monthly bills, also write out a check regularly for their investments.
Hopefully these have jump started some ideas of how to get started in investing if you haven't yet, or get closer to being able to.
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