How to Manage Your Personal Cash Flow

personal cash flow The key to managing your personal cash flow is treating your personal finances like a business. Figuring out how to increase revenue and reduce costs is the secret to maximizing profits and ultimately putting more dollars in your bank account. If you don’t have positive cash flow, it’s nearly impossible to increase wealth.

So how do you go about putting an action plan in place to actually increase your personal cash flow?

Reduce Costs First 

It is much easier to reduce your overhead expenses first before trying to increase your income since that process can be more time consuming. After all, time is money, and even streams of passive income take some time initially before they take care of themselves.

Look at all your expenses and figure out where you can reduce costs. Create a line item budget and explore areas you can reduce or eliminate completely. Start with your non-essentials first, i.e. clothing budget, entertainment, etc. Then move on to variable expenses, like groceries and transportation costs. Finally, look at how you can reduce your necessities, like rent and utilities.

Increase Revenue

The second step in managing your cash flow is to increase your income, and this almost always results in working more. Whether getting a raise, getting a second job or freelancing on the side, figure out a way to increase how much money you bring home every single month.

Manage Debt

By managing your debt to creditors, you free up more of your hard-earned money. Paying off debt will not only immediately increase your cash flow, but it will also allow you to invest that money in different ways which will help you increase your personal cash flow in the future. Paying off high interest rate debt first is the best strategy to free up money for other uses. In addition, not all debt is bad and in a low interest rate environment, retiring debt on a high interest rate credit card with a lower rate personal loan may allow you to pay down debt faster.


Once you’re feeling comfortable with having reduced your expenses, increased your income and eliminated debt, it’s time to look into passive streams of income that will help you solidify your wealth for years to come.

There are countless ways to invest your money: retirement accounts, the stock market, real estate, venture capital. Do extensive research to find where you feel most comfortable investing.

Solidify Your Wealth 

Treating your finances like a business is the key to financial security and personal wealth. Don’t let your business go bankrupt by making poor decisions, spending more than you earn, investing blindly or refusing to learn how to take control of your finances. When it comes to managing your personal cash flow, be proactive to solidify your wealth and financial security.

Readers: Do you think that managing your personal cash flow like a business would work for you?

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