Cash Flow Issues? Fix It Now and Forever

Here’s a problem: you’re at the end of your money and there’s three days left before you’re paid. Where do you turn?

Maybe you’ve been there…I was in this situation in my early days as a financial advisor. It was horrible. Here I was, telling people about how to manage their money, and I was sweating every meeting, just praying that they’d sign on the dotted line. One time I even ran out of gas on the way home and had to search frantically for money under my seats.

There are two solution levels: “Right now” and “Never Happen Again”. Let’s tackle both.

Take Care Of The Problem Right Now

Raid the cupboard – It’s time to get creative on your meal plan. In my “broke days,” if I could get through without buying any food, I was golden. That thing in the freezer that I wasn’t sure whether I could still eat it? Time to find out. Those crackers that are slightly stale in the back of the pantry? They’ll go great with the chicken broth I’m using to make a creative soup.

Find alternate transportation – Heading to work? If you live close enough, it’s time to walk or ride a bike. Walking is—of course—free. The bike? You made an investment in it at one time, but it’s good for your pocketbook and your wallet to dust it off. Live too far away? Explore ride sharing options. Hopefully, your new ride-mate will let you pay for gas on Friday….once you’ve been paid.

Explore Ways To Get Cash – God forbid I had an emergency….. if that happened, I’d attempt to borrow money from relatives for a few days, offering them a good interest rate. If nobody bought (near the end of my rope those people were exhausted from continuously loaning me money, although I always repaid them), I needed to find other ways to get cash. When I’d need cash, none of them were especially attractive, so that’s why I always thought about….

Making sure it “Never Happens Again”

The great part about making mistakes is that they allow you to learn. If you fall forward, it’s not quite so painful.

Build An Emergency Fund – On my personal blog, Stacking Benjamins, I talk about automating my savings as my big money “a-ha.” No matter how painful, putting a few dollars away for a rainy day fund is vital. You had to raid the fund? That’s what it’s there for! Now, go and rebuild.

Sell Your Junk – Clutter, whether it’s in your closet or your mind, creates confusion. If you’re going to focus on ways to earn more money, you’re going to need to clean the slate. Use eBay, a garage sale, or Craig’s List to dump as much access stuff as possible. Use that money to fund your rainy day account.

Build a Better Budget – Ask yourself “what went wrong” this time and fix your budget to avoid that the next time. You needed tires for your car? Why isn’t that built into your plan? Your furnace died? Why don’t have you a strategy for that? Sure, you won’t be able to fix every potential problem, but there are always ways to fix your plan so that you’re more prepared next time.

Ask For a Raise – Studies show that most workers could get a raise if they just asked their boss the right way for more money. You’ll need to come armed with statistics and you’ll also need to prove that you deserve it. What do you do if the boss says no? Look for new work. The quickest way to make it up the ladder is to find a new boss who’s willing to pay you what your worth. Often, that’s a much quicker way to more money than settling for little raises at your current job.

photo: Sharon Hahn Darlin