Cash Flow Struggles? Here’s How to Turn Things Around

Is money coming in slower than it’s going out? You’re not alone. Business owners, retirees, and even high earners can run into cash flow problems.

Even the most well-laid plans can feel strained without steady cash flow, and growth opportunities can slip through your fingers. Here’s how to get cash moving in the right direction again.

Improve Personal Cash Flow

If money feels tighter than it should, there are a few simple tweaks you can use to help free up extra cash.

Start by creating a spending plan. Strategies like the 50-30-20 rule, which suggests that 50% of your income should go to needs, 30% to wants, and 20% to savings, can help you prioritize your spending and identify areas where you can rein it in. 

Trimming unnecessary expenses can also make a bigger difference than you might think. You might consider canceling subscriptions you rarely use, eating out less, and shopping smarter. If you haven’t negotiated bills like insurance or cable in a while, now could be the right time. 

Finally, consider automating your savings. Setting up automatic transfers to a savings account means you can consistently set money aside without relying on willpower. Over time, this simple step can also help you build your safety net and keep you focused on your long-term goals while addressing your day-to-day needs.

Manage Debt Effectively

Debt can weigh heavily on your cash flow and slow down your progress toward your financial goals. Tackling it strategically is vital to regaining control and carving out more space for saving and investing.

Focus first on high-interest debt, which tends to be the most expensive in the long run.

Two popular methods can help: the avalanche method, which targets the debts that carry the highest interest rates and saves you money over the long term, and the snowball method, which clears smaller debts first to build momentum to clear larger debts. Choose the approach that aligns best with your personality and financial situation.

At the same time, try not to take on new debt unless you absolutely have to. Relying too much on credit cards or loans can create a cycle that’s difficult to escape, placing more of a squeeze on your cash flow.

Being intentional about how you spend and finding ways to cover expenses without going into debt allows you to reduce financial stress and free up resources for what matters most to you. 

Strengthen Your Financial Foundation

An emergency fund can help maintain cash flow when life throws unexpected significant expenses your way. You should aim to set aside at least three to six months of living expenses in a high-yield savings account. Doing so can keep you from having to draw on credit or selling investments at an inopportune time.

Investing can be just as important for financial health over the course of many years. The sooner you start investing, the more you stand to benefit from compound interest, a huge driver of long-term growth.

Tax-advantaged accounts such as 401(k)s or IRAs are great options to make use of, particularly if your employer can match your contributions. 

Diversifying across stocks, bonds, and real estate can also help you spread risk while positioning you for growth. That way, you can stay invested for the long haul (as opposed to reacting to market swings) and keep your wealth-building strategy on track.

Trying to time the market often leads to missed opportunities and unnecessary stress. Instead, follow a disciplined plan that’s consistent with your financial goals, one that allows your investments to grow steadily over time.

Overcome Your Cash Flow Struggles

Cash flow struggles don’t have to dictate your financial future. With the right strategy, you can create stability, reduce stress, and build long-term wealth.

Whether you need investment guidance, retirement planning assistance, or targeted tax strategies, The Rosamond Financial Group is here to help. Our team specializes in total asset management, offering personalized guidance to keep your finances on track. Book a free introductory meeting online!

About Preston

Preston Rosamond is a financial advisor and the founder of The Rosamond Financial Group Wealth Management, LLC with over two decades of industry experience. He provides comprehensive wealth management and financial services to successful business owners, corporate executives, and affluent retirees who enjoy simplicity and seek a professional to help them pursue their goals. Preston personally serves his clients with an individual touch, a sincere heart, and his servant’s attitude is evident from the moment you meet him. Learn more about Preston or start the conversation about your finances with him by emailing solutions@rosamondfinancialgroup.com or schedule a call on his online calendar.