Advertisement
Singapore markets close in 4 hours 47 minutes
  • Straits Times Index

    3,171.66
    -0.27 (-0.01%)
     
  • Nikkei

    39,570.48
    -169.92 (-0.43%)
     
  • Hang Seng

    16,737.12
    +0.02 (+0.00%)
     
  • FTSE 100

    7,722.55
    -4.87 (-0.06%)
     
  • Bitcoin USD

    65,767.52
    -2,025.01 (-2.99%)
     
  • CMC Crypto 200

    885.54
    0.00 (0.00%)
     
  • S&P 500

    5,149.42
    +32.33 (+0.63%)
     
  • Dow

    38,790.43
    +75.66 (+0.20%)
     
  • Nasdaq

    16,103.45
    +130.27 (+0.82%)
     
  • Gold

    2,164.90
    +0.60 (+0.03%)
     
  • Crude Oil

    82.52
    -0.20 (-0.24%)
     
  • 10-Yr Bond

    4.3400
    +0.0360 (+0.84%)
     
  • FTSE Bursa Malaysia

    1,549.68
    -3.96 (-0.25%)
     
  • Jakarta Composite Index

    7,342.02
    +39.57 (+0.54%)
     
  • PSE Index

    6,891.22
    +37.93 (+0.55%)
     

3 Ways To Manage Your Cash Flow Effectively

One of the fundamental building blocks of wealth building is spending less than you earn. That means money going in must be more than money going out. The term we use for that is 'positive cash flow'. While some of you may think that's difficult to achieve in Singapore where the cost of living is high, a positive cash flow is something everyone should strive for at the very least.

In simple terms, cash flow represents the movement of money in-and-out of an account. To be in control of your personal finances and be on the right path of building personal wealth, you need to maximize your cash flow.

To help you get more for your money, GET.com shares with you the 3 ways you can manage your cash flow effectively:

ADVERTISEMENT

1. Reduce Outflows

In order to keep your account from going into the red, you can either increase the inflows or reduce the outflows. Make a note of the fixed expenses you have per month and manage these first. They can be home loans or study loans and you should be able to apportion your income to pay these off first as they incur interest payments.

Next, take a look at your variable expenses. These include daily spending on food, transport and groceries.

Can you reduce expenses on these? Most of the time, you can always find cheaper ways to eat and it may only take a simple adjustment of habits, such as eating at the hawker centre or food court instead of at casual restaurants.

2. Increase The Income Stream

While you may not be able to ask for a pay rise from your current boss, there are little ways to earn extra income, if you make time for it.

You can always look for part-time jobs such as becoming a tuition teacher on the weekends, selling your unwanted clothes at flea markets or making use of your existing skills with some freelance assignments.

It takes commitment, nonetheless, to give up your relaxing time to work extra, so it would be good to find something easy enough for you to do so that it does not become a chore.

3. Manage The Flow Of Money

Using the 0% installment plan from certain credit cards is a great way to manage your cashflow - when used correctly.

If you need to pay for a new laptop and find it difficult to fork out the money using just this month's pay, you can use the 0% installment plan to spread the payment over 6-12 months, making the payment more 'affordable' on a monthly basis.

Paying $200 per month over 6 months will be more affordable compared to paying a lump sum of $1,200 if you have to get something you need.

Citibank credit cards let you enjoy 0% interest installment plan with its interest-free Equal Payment Plan (EPP) at over 1000 participating stores.

As long as you pay off the lump sum completely before the 0% instalment period is over, you don't incur any interest.

When you achieve a positive cashflow with inflows greater than expenses, the next step will be to build your wealth by using the excess cash each month to grow more money through savings or investments.

This article was originally on the GET.com blog at: 3 Ways To Manage Your Cash Flow Effectively.

What do you think? Share your comments with us below!

Like GET.com on Facebook or sign up to GET.com's FREE money saving email!

Find the best credit card discounts near you for dining, shopping, lifestyle and more. Download the free GETdeals™ App.

Compare personal loans, credit cards and insurance at GET.com - Singapore's first and only transparent comparison website for financial products.

Other Articles You May Like From GET.com