When I first started working my way out of debt I had some serious cash flow problems every month.
This is not a good situation to be in as it can cause you to either be late with your bill payments, and incur late fees, or you’ll likely have to pay overdraft fees in order to pay your bills on time. To help you avoid either of these negative consequences, here are # ideas to solve your cash flow problems.
Borrow From Your Savings
In addition to paying down my consumer debt and student loan, I was (and still am) trying to build an emergency fund. I had very little in my savings last January when I started my journey, and since then I’ve built to up to just over $800. It’d be more, but I’ve had a few setbacks along the way. Anyhow, as I shared a while back, borrowing from my emergency fund is one way I helped temporarily solve my cash flow problems.
Each month I’d borrow a couple hundred dollars from my emergency fund to help me pay all the bills that are due before mid-month. Then after I got paid again I’d transfer the money back into my emergency fund. This is obviously not the ideal situation, but it allowed me to pay my bills on time without having to pay late fees or overdraft fees.
Increase Your Income
Obviously another way to help balance out your cash flow is to just increase how much you get paid each month. You can either do this by asking for a raise at your job, getting a promotion, finding a new job, or taking on a side hustle. No matter what you choose to do to increase your income, it should help you balance out your cash flow.
Decrease Your Expenses
This is another way I’ve helped myself balance out my cash flow. The more debts I get paid off and the less required payments I have each month, the easier it gets for me to meet my payment obligations during the first half of the month.
Change When You Get Paid or When Bills are Due
You don’t always have the ability to request different a different pay date, but if you do, take advantage of it! For some of my freelance work I set up an agreement with my client that they will pay me weekly or twice monthly rather than only once/month. Getting paid more often helps me balance out the cash shortage I have the first part of each month.
If this isn’t an option, perhaps you can change when some of your bills are due instead. Some of my credit cards offer flexible payments dates. This doesn’t mean you can just pay the bill whenever the heck you want, but instead you can choose when the payment is due is each month.
Build Up a Buffer
Instead of having a zero sum budget, you could instead leave some of your extra income, from your side hustles or other efforts, in your account at the end of each month until you have a nice little buffer to help you cover the cash flow shortage you experience each month. The only problem with this method is making sure you don’t fall victim to thinking it’s okay to over spend your budget because of the buffer in your account.
Do you have any cash flow issues? How have you solved them?