Three Financial Moves That Can Help You Deal with Cash Flow Issues

Most of us have cash flow issues occasionally, when the amount of money going out just doesn’t quite match the amount of money flowing in. They can happen in our businesses and in our personal life, and there are a few moves we can make to help deal with them, whenever they hit.

Earning More

This might sound over-simplistic, but hear me out. When we have cash flow issues it’s easy to go straight to ways we can economize and save more. That’s not necessarily a bad idea of course, but I’ve written before about how – for many of us –  it’s often actually easier to earn more than it is to spend less.

Cutting costs only works when you’re already spending on things you don’t need. Finding a significant amount of money in your personal monthly budget from cutting costs will only happen if you’re already living a pretty extravagant life. Finding a lot of surplus in your monthly business budget will only happen if you’re already running your business inefficiently.

We sometimes overlook the obvious element of our cash flow problems, which is that we simply don’t have enough coming in.

Selling more products, signing a new client, asking for a raise, or putting your freelance rates up, are all moves that can increase incoming cash flow, and while none of them are particularly easy, they are simple and fairly actionable steps that will – if successful – yield fairly quick results.

Utilizing 0% Credit

I’m always careful about giving out this advice. It’s obviously best to avoid consumer debt altogether, but if you have no option, 0% deals can sometimes be your friend. Some businesses will offer 0% finance when buying a product or service, and some credit cards will offer a 0% rate when you transfer debt (or sometimes on new purchases for a set amount of time) as a reward for opening a new credit card account.

0% credit arrangements end, and often convert into high-interest-rate alternatives, especially when using 0% balance transfer rates on credit cards, so if you’re going to use them, make sure you have a solid plan in place to pay the debt off before the regular interest rate kicks in.

No-interest deals have drawbacks for sure, but they are something that can occasionally help you through a short-term cash flow issue, while avoiding any of the additional expenses generally involved in accessing alternative lines of credit.

Having a Diversified Portfolio

If you read my personal finance articles regularly, you’ll know I’m generally a fan of the traditional emergency fund, even though not all finance writers agree with me.

Whether or not you have a set emergency fund, having your financial assets spread across a mix of short-term and long-term investments means you can often free up some cash without incurring any penalties.

It can be frustrating to have to borrow at a high interest rate, because you’ve tied up your investments for the long-term, especially if your tied-up funds are earning a lower interest rate than you’re now having to borrow at.

When it comes to investing, whether we’re talking personal funds or business assets, think things through carefully. It can pay to consider all and any possible cash flow issues coming over the horizon before making any long-term commitments.

Not sure how to manage current cash flow issues? Or feel they’re getting out of hand? You may want to talk to a credit counselor or other financial professional.

Karen Banes is a freelance writer specializing in entrepreneurship, parenting and lifestyle. She writes articles, website content, ebooks and the occasional award winning short story. Her work has appeared in a range of publications both online and off, including The Washington Post, Life Info Magazine, Transitions Abroad, Brave New Traveler, Natural Parenting Group, and Copia Magazine.

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