4 Ways to Increase Your Personal Cash Flow

As stewards of God’s resources, paying attention to your personal cash flow is important.

What is your personal cash flow?

Cash flow is the amount of cash being transferred in and out of a company’s or person’s finances. In other words, it is your financial margin. For companies, cash inflow primarily comes from sales revenue. For individuals, cash inflow typically comes from earned income. For both companies and individuals, cash outflow primarily occurs because of various expenses, like your Disney Plus subscription.

Companies carefully watch their cash flow as it is a key indicator of financial health. Here’s why—Positive cash flow means that a company’s value, or net worth (what they own minus what they owe), is increasing. Negative cash flow means that their net worth is decreasing. This is true for individuals as well.

Maintaining a positive personal cash flow should lead to a gradual increase in your net worth and increased ability to live generously.

So, how can you increase your personal cash flow? The answer may come from the income side of the financial equation (cash inflow), expense side (cash outflow), or both. Here are a few ways to increase your cash flow:

1. Pay off a debt.

When you pay off a debt, the monthly expense associated with that debt goes away. This reduces the necessary cash outflow and, therefore, increases your cash flow. If you are wondering which debt to pay off first, consider using the debt snowball method as your debt elimination plan. Target your debts in order of smallest balance to largest balance.

2. Refinance your mortgage.

Interest rates are really low right now and obtaining a lower rate through a refinance may reduce your monthly payment (and the amount of interest you pay). But before you go and refinance your mortgage, read this article and make sure that it is a financially wise decision.

3. Cut expenses.

If you have a slim or negative cash flow, consider reducing expenses. Review your subscription services. Often, households are paying for services they don’t use. Can you cut back on eating out? Do you need to sell a car that’s monthly payment consuming too much of your cash inflow and purchase a less expensive car with cash? Find ways to increase cash flow by cutting expenses.

4. Get a side gig.

Now, let’s focus on the income side of the financial equation and try to increase your cash inflow. A side gig can become a fun way to make some additional income. Consider looking for a side gig where your passion, skill set, and the opportunity to earn money collide. In my book, Find More Money, I call this the Trifecta. Never has it been easier to make money outside of your full-time work. So, consider getting a side gig.

Pay attention to your personal cash flow. And if you find it is struggling, consider ways you can increase your cash inflow or decrease your cash outflow.