A simple fact of life is money is vital to survival. Unfortunately, many people find they are living paycheck to paycheck, unable to save for emergencies or get ahead. Budgeting doesn’t help either beyond showing people exactly where their money is going, few having any clue as to how to stop the financial hemorrhaging. Creating a budget isn’t a bad idea, but one might one to first consider using the ideal tool to optimize one’s cash flow.
A budget is created by listing the household income as well as expenditures, such as energy and water bills. Expand on the idea by listing all expenses and determining which are negotiable. Once the list of “Negotiable Expenses” is complete, go through and determine whether to “Eliminate,” “Reduce,” “Postpone” or “Keep” each one individually. Be sure to do so responsibly, keeping in mind that, although the electric bill may be negotiable, one doesn’t want to completely eliminate this expenditure.
Eliminating an expense is not necessarily as easy as one may think. After all, while cable is certainly not a necessity, few are willing to give up their entertainment. That being said, no one needs cable television, Netflix and Hulu. Simply chose which expense provides the best service and eliminate the other two. That easily one increased one’s cash flow without making life dull and tedious. More to the point, people quickly discover eliminating excess is a quick way to optimize their cash flow.
Some household expenses are necessary, electricity and running water not only convenient but crucial to a healthy lifestyle. Needless to say, such expenditures cannot be eliminated, although one will find they can reduce these expenses. Taking a sack lunch to work rather than grabbing something at a fast food restaurant will also reduce the amount of money going out, allowing one to start building up a little nest egg. It doesn’t take much to optimize one’s cash flow.
Generally speaking, one doesn’t want to send payments in late as this tends to have a rather negative effect on one’s credit. That being said, many companies offer refinancing options which allow one to postpone payments. In addition, one can hold off on buying new clothes or a movie, saving up for the expense rather than spending the money as soon as it hits one’s pocket. In fact, if one follows each step of the tool, one might find he or she has a little more to go toward those extras.
Some expenses, no matter how people try, cannot be eliminated, reduced or postponed. Such expenditures go under the “Keep” category, these expenses a part of life, such as medical and car insurance. Nevertheless, they won’t seem quite so daunting when one has eliminated, reduced or even postponed other expenses. In the end, using this simple tool to optimize one’s cash flow will help ensure one no longer has to live paycheck to paycheck.