How to Increase Your Cash Flow (Part 1)

Money Girl gives tips to increase cash flow and improve your personal finances.

Keith Whelan and Laura Adams
5-minute read
Episode #315

How to Increase Your Cash Flow (Part 1)You’ve probably heard the peppy song Ac-Cent-Tchu-Ate the Positive. It was a favorite from the 1940s that explains how accentuating the positive and eliminating the negative is the key to happiness. I’m sure the song wasn’t written with cash flow management in mind—but believe it or not, the same rules apply.

You see, to achieve financial security you need more positive cash flow and less negative cash flow. We’ll cover exactly how to do that, in this 2-part series..

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How to Increase Your Cash Flow

They say that cash is king. And it’s true that you won’t get very far with your finances unless you have income or cash flow. But how do you increase your cash flow without getting promoted to CEO or winning the lottery?

The secret to boosting your cash flow is very simple: You have to increase the assets you own that provide you with positive cash flow and reduce or get rid of the assets and liabilities that cause negative cash flow. Today, we’ll focus on how to eliminate the negative and in Part 2 of this series, we’ll cover how to accentuate the positive.

What Is Negative Cash Flow?

Most often, the largest negative cash flows come from our fixed expenses. These include loans on real estate and vehicles, which require you to make the same payment each month. Even if you don’t own a home, your rent is also a fixed monthly expense that reduces your cash flow.

You also have negative cash flow from variable expenses, or those that change from month to month, like food, clothing, and personal care items. These can become even more negative if you buy them on credit. Carrying debt on a high-interest credit card can cause the cost of any item to double or even triple because interest gets piled on month after month, until you pay the balance in full.

See also: How to Pay Off Credit Card Debt?