3 Strategies to Create Positive Cash Flow

The only way to achieve financial freedom is to reach your money goals. To meet your money goals, you must create a positive cash flow. A positive cash flow is the nucleus to investing and saving, two things smart people certainly take advantage of.

I’m sure you probably have a job, or a side hustle. Let’s say your job or side hustle brings in $4,000 a month, but you have $4,025 in expenses for the month. This means you have a negative cash flow of $25. Let’s go to the opposite side of the spectrum and talk about positive money flow.  

A positive money flow is when your bills are less than your earned income. With a positive money flow, you now have options like investing and saving. I earned around $60,000 in 2021, so I made sure to save $6,000 by having cash flow management. This is something that you can certainly do, so let’s get started!

1. Cut down on your expenses

Do you spend too much money on gas? Recently, the price of gas has increased significantly during the post-pandemic Russian vs. Ukraine era. Cut down on your expenses by spending time at home on weekends and holidays. Millions of young Americans do not live in their hometown because of college and military duty. Consider alternating one Memorial Day weekend in your current city of residence and another back in your hometown. This will leave extra money in your budget for the savings account.

When was the last time you read a book instead of watched television? This can cut down your tv time, and in return you can cancel some of those subscriptions like HBO Max, Disney Plus, etc. My family recently added up our annual entertainment subscriptions and the total was astounding.

2. Earn more money

Take the chance on yourself. Is there a certification in your current field that can help you reach your financial goals? Register for the test and pass it. This will qualify you to reach new earning potentials and more opportunities in your field. By earning more money, you can create a gap between the amount of expenses and revenues in your personal finances.

There is always a need for personal improvement. The benefits of reaching your earnings goals are endless, allowing one to create a swaddle of cash. Open your mind to taking the chance on yourself, you will be surprised by what you’re capable of.

3. Create a budget

Personal cash management starts by creating a financial budget. A budget is a plan for every dollar you have. Anyone who is serious about having positive money flow, has a personal budget. Financial freedom and less stress are just some of the side effects of having a budget, so it is important to create one. When creating a budget, be sure to include all of your expenses. This is the only way to be sure that your money is working for you. Automate as much of your bills as possible to prevent late fees. Also, automate your savings by allocating 10% of your check to a separate bank account. This will make it easier for you to save money and reach your financial goals.

To Conclude

Spending less than you earn is the most critical step of creating a positive cash flow. Once this habit is created, your financial life will take a turn for the best. For more information on personal finance and investing, schedule a free consultation with our team!

About The Author

Eric Anderson is an Accountant and MBA holder based in Houston. His background includes 5+ years as an accountant, writer, social media marketer, and business professional.

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