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1. Life Decisions That Can Improve Your Cash Flow
Sometimes, no matter how hard you try to improve your finances, things
just don’t seem to work the way you expect them to. You’re neither
extravagant nor are you buried in debt. You try to stick to your budget, live
within your means, and invest some of your income but you still feel that
you are far from hitting your long-term financial goals. Or worse, still find it
hard to foot the bills.
If you’re in such situation, you might be wondering what else you’re
missing, how else can you improve your finances when you’ve tried almost
every financial advice you can find. You might even believe you are
destined for a life of just enough.
But don’t despair. Most situations in life, especially economic situation, can
be improved if you want it badly enough. What with the real-life stories of
people who started from the bottom, they were so deep down below that
there was no other way than up. Think Manny Pacquiao. Maybe what you
actually need is to make bigger decisions to make a bigger impact in your
finances. I’m not saying we should try boxing for money. Just a few tweaks
that can improve our cash flow because…

2. Cash flow is key
What is cash flow and why is it a key to a good financial shape?
Simply put, cash flow is the flow of money in and out of your pocket. It can
either be positive or negative, as a result of the tug-of-war between your
income and expenses. If, for instance, you earn $4000 a month and spend
$5000, you have a negative cash flow.
A negative cash flow means financial hardship. If you earn $4000 and
spend $4000, you are fighting for survival.
If, however, you earn $4000 and spend only 50%, then you have a positive
cash flow. The remaining money gives you options to save more or buy
assets, which in turn generate more cash.
If you were a business with a negative cash flow, your bottom line bleeds
red. With a good cash flow, however, a business can spend more on
marketing to attract more customers, buy more equipment to expand
production, or even buy other companies.
This is what makes cash flow the lifeblood of your financial health and the
key to your financial goals.
What cripples your cash flow?
1. Expensive lifestyle. Living above one’s means may make you look rich
on the outside but you’re keeping pennies instead of bills.
2. No budget. You don’t know where you’re spending your money on. You
simply spend because you can.
3. Debt. Debt, especially high-interest debt, chokes your cash flow. Debt is
a good predictor of financial hardship.
So how do you improve your cash flow? Either you (1) improve your
income or (2) reduce your expenses. These may entail not-so-easy
decision though.
Find a better paying job
Sometimes you get so comfortable with your job that you become scared of
trying your luck on others even when opportunities are already staring right
at you. You fear that it will be difficult to adjust to a new job, neighborhood
or state, you lack the skills and all such mental barriers. Thing is, you will

3. never really know unless you try. What we know, however, is that a better
paying job may be able to improve your cash flow. Research about jobs
and industries that pay better than the rest and direct your effort towards
landing on one.
Move to a job with a better upside potential
This goes to the younger adults who are just starting out in their careers.
Be willing to start from the bottom, be trained by a mentor, and work your
way up to a better career. The job may have a lower pay at the start but
there may be a big growth potential in the industry that will benefit you in
the long term. Younger people can take more risks when it comes to their
career because they have less at stake: no family to feed, no mortgages
and hopefully little credit card debt.
Get a sideline
A little bit of humility will also go a long way in helping you improve your
finances. Get a second job, even if it doesn’t sound so good to your ears,
then you might be able to pad your income a little more and ease your cash
flow.
Consider a 2-income household
If you’re married and have kids, consider talking with your better-half about
her getting back to work, especially if the kids don’t need fulltime care from
one of you. A 2-income household could mean a significant increase in
cash flow. Make sure, however, that you’re not sacrificing your family, or a
great relationship for an income.
Reduce your discretionary expenses
Discretionary expenses are expenses that aren’t fixed, unlike your rent or
insurance or car loan. These may include your food, transportation,
electricity, etc. You have some control over these expenses and the little
savings you could have from them will add up. You might want to dine out
less often and pack your lunch to work, make your own coffee instead of
buying branded ones, or you can save a lot by using coupons and buying
on discounts.

4. Move to a cheaper apartment or city
Alternatively, you can also move to a place where the rent is significantly
lower. Rent, which is a fixed monthly expense, usually takes a bigger bite in
our income and sometimes a compromise to a smaller space may be the
quickest solution have.
Here in the U.S., many couples move to states cities with lower costs of
living, or if they’re retiring soon, move to a state with better tax benefits for
senior citizens.
All these, of course, are big decisions that are difficult to make. However,
you need to be objective rather than sentimental about things. If numbers
tell you that things aren’t working in your favor, you would need to make
adjustments…some of which require changes you never thought will
happen.