Simple strategies for increasing cash flow
Increasing your cash flow, which in turn will help you to get out of debt, is difficult, especially during tough economic times. But the same thing that has always worked – straightforward money management – still applies. If you want to increase cash flow you need to create new streams of income and cut your expenses at the same time. It’s simple commonsense, but it works, and it’s one of the most effective ways to plant yourself firmly on the path to eliminating debt for good.
Reduce your living costs
Living alone can be an expensive business – if you’re a single person or a couple without kids, have a think about whether shared accommodation could be the solution to your cash flow problem. If you have an extended family who might enjoy the prospect of sharing a large home then this is another option to consider as well, just make sure that living together is something that everyone thinks will work well and have some ground rules set in place that govern how it’s all going to work. If sharing a house isn’t an option for you then downsizing is probably your best bet. Even if you own your home have a think about renting a smaller place and leasing your home out to cover the mortgage costs, which may free up some extra cash.
Start a part-time business
There are any number of ways to earn some extra cash by offering home-based services in your local area. Garden maintenance, pet sitting, dog walking, window washing, leaflet distribution … you can tailor the times to suit your needs and because you’ll be working in your local area the travel costs will be minimal as well, putting more of the cash you earn straight in your pocket.
Decrease your travel costs
Every time you start your car you’re spending money on petrol. Of course there will be times when you need to take the car, but for the rest of the time stop and think about the alternatives. If you live in an area with a good (or even decent) public transport system then jump on a train, bus or tram and enjoy the benefits of not having to drive yourself around – you get to see things you’d miss out on from behind the wheel, can catch up on some reading time, get some work done or even just use the time to chill out. And because you’re using your car less you’ll spend less on petrol, tyres, general wear and tear and depending on the type of insurance you have, that could cost you less too! Even if you can only use public transport a couple of times a week it’s worth it.
Stop paying for things you don’t use
Take a look around your home and make a list of all the things you pay for that no one really uses, like the premium subscription for pay TV, the high download internet plan, and even the home phone line. Unless you’re getting your money’s worth out of these services every month then look at downsizing them or getting rid of them altogether. Chances are you won’t even notice that they’re gone, and every cent you would have spent on them can go straight in your pocket instead.
Use your savings wisely
Once you streamline your monthly expenses the trick is to make sure that you don’t just waste the money you save. Use this extra cash to make extra monthly payments on any debts you have (setting them up via direct debit to remove any temptation to give it a miss ‘just this once’) or arrange a direct deposit into a high-interest savings account to give your finances an extra boost. Remember, this is money you would have spent in the past, so you won’t miss it if you arrange to put it to good use in the future. Use it to get ahead of the game and start pointing your financial future in the right direction.
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Tags: money management advice, debt reduction