Do you ever feel like your bank account is a revolving door? You can’t seem to keep anything in for very long. Whether it be the odd splurge here and there, poor financial planning, or just bad luck, you are constantly finding yourself in tight financial straits. If this sounds familiar then you are not alone. Millions of people in the world are also feeling the same way – and that’s where keeping your cash flow healthy comes into play. If you want to stay out of trouble with your finances, then read on because we’re about to tell you all you need to know about keeping your cash flow healthy.
1. Keep Track of Your Spending
The best way to ensure that your cash flow stays healthy is to keep track of your spending. No matter how good you are with money, if you don’t know how much you are spending then you will end up going broke. This doesn’t mean that you need to be a financial control freak and count every penny that comes out of your wallet. A good first step is to start a budget notebook. This will make it easier for you to keep track of how much money you actually have. You should also keep a running tally of your bills so that you know for sure that you have enough money coming in.
2. Be Mindful When You Spend Money
The thing about cash is that it is finite. You can’t just go out and spend it whenever you feel like it. If you do that, then your cash flow will be out the door even faster than usual. Instead, you need to keep a tight rein on the money that comes in and that goes out. This means that when you are spending money, you need to be mindful. You need to think about what you are doing and why you are doing it. For example, if you are going out with friends and treating them all to a fancy meal, then you need to ask yourself why you are spending the money like this. Are you treating your friends because of how much they mean to you, or because they actually have money?
3. Learn the Difference Between Needs and Wants
The biggest mistake that many people make when it comes to keeping their cash flow healthy is that they treat all spending the same. In reality, you need to make a distinction between needs and wants. We’ve all heard stories about people who ended up in debt because they treated their wants as needs. If you fall into this category then you need to learn how to keep your cash flow healthy because it is a dangerous pitfall. You need to make a serious effort to learn the difference between needs and wants. Once you do, you will be much better placed to keep your cash flow healthy.
4. Don’t Treat Your Bank Account Like a Piggy Bank
The thing about keeping your cash flow healthy is that you need to treat it as if it is already in the red. This means that from the moment you bring it in, you need to treat it as though it is already gone. This sounds like a simple concept but many people fail to do this. One of the worst things you can do with your finances is to treat your bank account like a piggy bank. This is just asking for trouble. You see, you need to keep a very close eye on your spending and you should be doing this with every single penny that comes into your bank account. In other words, you need to keep a very close eye on the small print. If you are not, you could end up spending large amounts of money without even knowing it.
5. Estimate How Much You Will Need at Any Point in Time
One of the best ways to keep your cash flow healthy is to make regular estimates of how much money you will need at any point in time. For example, you might anticipate that a particular purchase will cost $500 every six months. If it does, you need to have that amount in your bank account before then. This way, you will be able to avoid overspending and you will also be better placed to keep your cash flow healthy. There is no point in keeping $500 in your account if you aren’t going to use it. Estimating how much you will need at any given time is a great way of avoiding this. Plus, it will also help you to stay on top of your finances.
6. Debt is Good – but only if you know how to handle it right
The last thing we will say on the subject of keeping your cash flow healthy is that debt is very good. However, you need to make sure that you are managing your debt effectively. If you manage your debt well, then it is a great thing. Unfortunately, many people mess this up. The result of this is that they end up with a lot of debt that they aren’t able to handle. When this happens, they often find that it is very difficult to dig themselves out of their financial hole. If this sounds like something you are worried about, then you need to take the time to make sure that you are managing your debt effectively.
