Be Your Own CFO: 5 Tips to Effectively Improve Your Personal Cash Flow

personal budgeting

Have you ever seen an expert CFO at work? Handling dozens of intricate financial documents, refining and fine-tuning contracts worth thousands, and managing tax deductions practically with their eyes closed. It feels as if you could never amount to such a high level of precision in your own strategizing and saving money on the side for your next exotic vacation. In fact, that vacation is probably years away because you cannot find a decent way to save up without wrecking your daily routine.

No matter what you do, and even if you own and run your own company, managing finances is always left to the professionals, so it’s no wonder the rest of us mere mortals have trouble managing our own personal budgets. Here are a few handy ideas to use to your advantage and manage your personal cash flow with ease while you retain your quality of life.

Monetize your skills on the side

The entire world is dealing with this economic crisis, and you’re not alone in wanting more financial stability in your life, and more options to grow your income. However, especially today, it can be difficult to make a decent living with a single salary, especially if you’re kick-starting your own entrepreneurial venture, and struggling to make a name for yourself in the business world.

Even if you already have a steady job, you can benefit from setting up a side-gig that will help you bring in more cash. Think about teaching online, tutoring, writing a blog, or affiliate marketing. There are all kinds of options out there, so look for something that can fit into your schedule.

Craft a balanced monthly budget

The simple principle of spending less than you earn seems solid on paper, but few people actually stick to it in real life. Why? Because it’s too easy to max out a credit card or just tap into your savings every once in a while. Discipline is vital when you’re looking to cut down on your expenses and solidify your cash flow.

To eliminate wasteful decisions with your cash, you can start by creating a clear-cut monthly budget and then allocating specific sums to what you need to spend on, and then put the rest aside in your savings account. The best way would be to set that money aside as soon as you receive your salary, as you won’t be tempted to spend more towards the end of the month!

Save while you spend with the right credit card

Everyone nowadays uses more than cash. You could be using a credit card or two, a debit card, and a digital banking account such as PayPal to manage your expenses. You should take all of those sources into account when you’re trying to take control over your own cash flow. Start with your credit cards: maybe there’s a better option out there that suits your spending needs.

In fact, you can choose from a range of no annual fee credit cards that also come with cashback programs and offer discounts for specific purchases. Many providers today reward their customers for ordering online or using a delivery service. So, depending on your lifestyle, you can save up while you spend with your credit card if you choose the best one for you.

Find less expensive alternatives in life

A significant portion of your cash flow management boils down to how good you are at downsizing on your spending. Take some time to clearly outline all of your expenses into key categories, and then determine which ones are essential (such as rent, utilities, monthly mobile plans, etc.) and non-essential. For example, do you really need to order takeout that often? Or pay for a pricey gym membership when there’s a less costly alternative a block away?

When you cut down on your regular, unnecessary expenses, you unleash a huge portion of your earnings for smarter decisions and savings in general. You can use that cash to cover your debt, or invest in a passive income idea. Simple changes such as cooking your own meals, exercising at home and in the park, and finding less expensive shopping places will help you keep your behavior, and your cash flow, in check.

Track your progress and adapt

It’s one thing to write down a few ideas and create a fictional plan for your budget, but unless you follow through and keep yourself in check, you cannot expect any changes in your funds any time soon. In fact, thanks to digital transformation and all of its perks, you can actually rely on a variety of apps and software solutions to keep an eye on your monthly budget, your savings, and how successful you are at reducing your expenses.

Even if you prefer the old-school way of simply writing it all down in a notebook, as long as you’re true to that routine, you can find gaps in your strategy and discover new, clever ways to spend less and retain more of your income for smarter investments.

You don’t need an economics degree to have a basic grasp of your own finances and manage your budget better. All you need is a little bit of structure, some planning, and consistency to follow through with your plan, and you’ll likely restore your cash flow in no time. Hopefully, these tips will help you get there, and allow you to invest in learning opportunities and experiences that will genuinely enrich your life.

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