Identifying Personal Cashflow Issues

Once you start earning money, it is very important to train yourself with sound financial management. Financial management, as described by books, is how you manage the cash flow to accomplish your objectives. This could be broad when it is applied to business and other enterprises but on a personal level, it simply means, being wise in spending and an even being wiser in saving.

The first step in making this change in your life is by listing down all your cash “in” and cash “out” flows. List the different components of your income such as salary, income from a rental property, income from freelance work or investment sources. You also need to list down the things you spend on such as fixed expenses, discretionary expenses, taxes and what you commit to save.

From this point, you will be able to see if you have cash flow issues and if you are living within or beyond your means. For you to be able to mitigate the situation, an open mind is needed and this change in your lifestyle will really come from you. Be the change and do the necessary changes to fix your cash flow issues.

We always say this – living within your means – but what does this really mean? Well, it simply means buying the things that you can afford and much more so, being able to set aside money for future purposes. This also means foregoing wants and prioritizing your needs – do you really need that latest and greatest smartphone when your current phone is working perfectly fine? Do you have enough money to get that new phone? Asking yourself these simple questions can save you from a lot of trouble later on.

A good goal to have is to create a cash flow cushion. This means saving a little money each month from your paycheque to cover for unexpected cash flow surges such as emergencies or big purchases. You can save a lot on bulk buying but it will definitely show an upfront deficit in your cash flow for the month, having that cushion can help ease that financial strain.

There may be a moment when you will come to an unfortunate financial bind that even a cash flow cushion may not be enough. This may be an unforeseen event like a sudden hospitalization of a loved one or even when you car breaks down. These situations would often throw your cash flow out of balance especially when you have just started saving for that emergency fund.

At times like these, you can consider payday loan companies like GoDay to address these urgent financial needs. GoDay has clear and transparent transactions that will help you address any financial emergencies.