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Money Management

3 Simple Ways to Improve Your Cash Flow

3 Simple Ways to Improve Your Cash Flow

Cash flow is ultimately what you are managing when you are budgeting. The amount of cash flow you have, determines how quickly you can reach those big financial goals that you have. If you have great control over your cash flow, chances are, you are going to reach your goals quickly. When you have to send your money to a specific line item, you are giving up that control of your money.

Ultimately, you want to have an even cash flow. What that means is that the same amount of money that goes in, also goes out.

Now, that doesn’t mean I’m telling you to spend every dollar of your income. But, I am saying that you should be doing something with every single dollar that you get. This makes your cash flow equal, everything that comes in, gets a job going out.

When you have a negative cash flow, you are spending more than you have coming in. That’s a major problem and one that needs immediate attention. This is when debt racks up and makes it incredibly difficult to make any kind of financial movement.

When you have a positive cash flow, this is a good situation to have. It means you have more coming in, then you have going out. However, if you just let this positive cash flow sit in your account, you’re not improving your financial situation.

This is why you need to have equal cash flow, everything going in, must have a job going out. You can’t just let money sit in your checking account doing nothing for you. It should leave your account to do work for you, earn some interest, pay off debt, or maybe invest.

Here are 3 simple ways to improve your cash flow and make sure you are making moves to a better financial future.

1. Have a positive cash flow.

The very first thing you have to do is to make sure you have more coming into your account then you have to send out to bills. If you have a negative cash flow, that needs to be immediately fixed. Track those expenses, get yourself on a budget, cut your expenses, increase your income, do whatever needs to be done to make sure you aren’t spending more than you make.

The very first thing to do is to determine if you have an income problem or a spending problem. If it’s a spending problem, that’s an easy fix. Find quick ways to cut some spending to immediately help your cash flow move to positive. If it’s an income problem, that’s also a fairly easy fix. Find yourself a side hustle, or evaluate if you are fairly being compensated.

Either way, you need to evaluate and make sure you have a positive cash flow, otherwise you can’t move to improving your cash flow.

2. Evaluate your cash flow.

Once you have a positive cash flow, it’s important to evaluate the money coming into your account and the money that leaves it. The money that you have coming in, do you feel fairly compensated for your work? Do you think you need to increase your income to reach your goals?

The big question is evaluating the money you have leaving your account. What happens to money when it enters your account? Does it sit in your checking account? Does it immediately go to bills? Is it working towards a specific goal you have?

Once you evaluate your cash flow, all the money coming in and out of your accounts, you will be ready to make big changes to improve your financial future. Start thinking about the things you want to change with the money coming in and out of your account.

3. Zero out your cash flow.

Once you know where you currently stand with your cash flow, it’s time to zero it out. Like I have said before, this doesn’t mean spend every single dollar you make. This means that you need to give every dollar a job, the easiest way is to zero based budget. That’s why you should have a zero cash flow by the end of your budgeting period.

If you still have a positive cash flow at the end of the month, what is that money doing for you? You need to put your money to work. In order to reach your financial goals, you need to make sure you are using your money to get there.

It’s not a bad thing to let money sit there, but the reality is, you’re not improving your financial future by letting it sit. If you are letting money sit in your account, what’s the purpose for the money? If you have a purpose for that money, then absolutely let it sit. Is it a buffer? Is it so you can get to the point of being a month(s) ahead because your income fluctuates? Are you cash flowing an expense you know is coming?

The point is, you need to make sure your money has purpose and isn’t just sitting around not working for you. By zeroing out your budget and cash flow, you can make sure you are reaching your goals.

Remember, your money needs to work for you.

If you don’t put your money to work, you’re not going to reach any kind of goals that you have for yourself. You need to make sure that you clearly know your goals and know how to make your money help you in reaching those goals. By making sure that you have given a job to every dollar that enters your account, you can ensure that you reach your goals. How have you made sure that you reach your money goals?


Money Management

Why You’re Not Succeeding at Budgeting When Everyone Else Is

Why You're Not Succeeding at Budgeting When Everyone Else IsThis post may contain affiliate links. Check out my Disclosure Policy for more information.

Budgeting can seem overwhelming and managing your finances can seem like a major task that seems impossible to figure out. There are SO many different ways to budget and SO many different people pushing different ways to budget.

What’s the right way to budget? Should I try cash envelopes to budget? Should I use an app? What about using a spreadsheet? Ugh. There’s too much out there to figure it out. And then you’re back to square one and definitely not budgeting and definitely not knowing where your money is going every month.

I’m fairly certain that most people that have never budgeted before have similar questions go through their head. If you’re anything like me, you definitely did.

I remember absolutely panicking about my post grad student loan bill every month of $2,000 and thinking, “How the hell am I going to make this work on a teacher’s salary?!” I was 23 and absolutely freaking out about how I was going to afford my life in a few short months.

This is the moment that determines if you’re going to be successful with budgeting. There isn’t any crazy math knowledge required, no special courses, no specific way, really it’s very simply why people succeed at budgeting and others don’t.

People don’t succeed at budgeting because they don’t want to do the work.

Budgeting is simple, but it’s in those moments where it’s make or break. People simply don’t want to do the work that is required to budget.

They want the freedom that a budget would bring, but they don’t want to do the work. Budgeting is easy, but it does take some time and desire to have the freedom to spend money.

I do get it, there are SO many different ways to budget out there. The reality is that you need to just commit to something that tracks your money and start. What works for me, might not work for you. That’s why you need to do some trial and error and find out what works for you.

It’s going to take time and some work, but the results you will see are so worth it. I have a template for Google sheets available, if that’s something you think would work for you.

People don’t succeed at budgeting because they don’t want to face their reality.

I remember when I hit my reality moment before I graduated from my masters program and realized how tight my budget was going to be with my minimum monthly payment. All the blogs out there said a budget would be freeing, WTF did I just sign up for?!

The reality is that in the beginning, your budget is going to feel restricting because it’s a new way you are managing your finances. But, something that helped me a lot was really focusing in on my why.

I want to live a life that wasn’t governed by bills, wasn’t dictated by when I was being paid next or how much I was getting paid. I want to live a life that doesn’t require me to stay at a terrible job just because I need the money. I want to do work that I absolutely love, regardless of my paycheck.

None of that was my reality then and it still isn’t my reality today, but I’m getting closer to living that life. All it took was my one decision to change my future and create a budget that helps me to get there. I’ve now created a budget that allows me to spend my money on things that I value and I do whatever I can to save money on things I need to spend on.

As a twenty something that’s quickly moving towards my upper twenties, people think I’m absolutely insane to still be living with my parents. But, I don’t mind living at home for now and it allows me to reach my long term goals so much faster. My parents live in NJ, cost of living is ridiculous, which also means my salary as a teacher is basically the highest it would be in most other parts of the country. This means $0 towards rent while getting a higher salary.

This was planned and a major change I made in my post grad plans once I made a fake budget for post grad. You need to face your realities, so that you can make changes for your future to get you to your goals.

Budgeting is not going to be easy, especially at first, but I promise you it will definitely be worth it. I can’t even imagine where my life would be now if I didn’t start budgeting back in 2015. I know for sure I wouldn’t have paid off 6 figures of debt so far and I definitely wouldn’t be in a place to start thinking about moving out. So, what’s stopping you from being successful at budgeting? I’d love to help, check out my email coaching, if you’re struggling with starting. Comment below what’s challenging you!

Money Management

What to Do with a Windfall of Money

What to Do with a Windfall of Money

This post may contain affiliate links. Check out my Disclosure Policy for more information.

A windfall of money can be a wonderful thing for your personal finances. It can enable you to get out of debt, finish that emergency fund, or get some needed stuff done around the house. However, it can be overwhelming to get unexpected money and figure out what to do with it.

I consider a windfall of money to be any money that you weren’t expecting. So, your paycheck, side hustle money, or overtime pay, wouldn’t count in these. These are things that you worked for, so it would be expected that you got money.

A windfall of money is any money that you get that wasn’t expected. For example, and a big one right now, is your tax refund, if you get one. I plan to redo mine at my next job so that I don’t get a refund, and instead get that money throughout the year, but for now, I get a nice refund each year.

The easiest way to handle this type of money is to earmark it for something as soon as you find out about it. For example, I found out my tax refund amount and immediately knew what I would use it for. This makes it easier to manage when the money is in your account.

Here are some tips to consider when deciding how to manage a windfall of money. Of course, personal finance is personal, and these are my suggestions on how to manage this unexpected money.

1. Add to your emergency fund with a windfall of money.

I strongly encourage everyone to look at their emergency funds first when they get any windfall of money. The reason being that without an emergency fund, you will never get ahead in the event of the unexpected.

My suggestion is to have at least 1 month of expenses saved, if you are paying off non-mortgage debt. Once you are debt free, other than your mortgage, you should have at least 3-6 months of expenses saved.

Now, this is heavily impacted depending on your income and how reliable it is. If you’re in a job that the income is unreliable and changes every month, I would encourage you to have a 3-6 months emergency fund, regardless of your debt. This is also the case if you are in a job that is only short term or is a short contract. Of course, if you are in this line of work you need to budget for the variable income. 

By using your windfall of money to have a full emergency fund in place, it will allow your normal income to work for you in your other goals. This will shorten the time it will take to reach those goals.

2. Apply it to your current financial goal.

If your emergency fund is good to go, I would suggest applying this windfall of money to whatever goal you are currently working on. Are you cash flowing renovations on your house, cash flowing a car, paying off debt, saving for a house, paying off your mortgage, investing, or anything else that there is to do out there with your money?

Any of these goals can be worked on with a windfall of money and I encourage you to do so. Any unexpected cash will shorten the time it takes to reach your ultimate goal that you are currently working on.

3. Cash flow your normal sinking funds.

Sinking funds are great to slowly save up for things you know are coming. I personally have one for my car, medical expenses, summer, moving out, and self care. By having these accounts, it allows me to easily go to the doctor when I’m sick or fill prescriptions and it not impact my budget.

With a windfall of money, it may be good to fill up those sinking funds, or simply cash flow an expense that you know is needed. For me, I haven’t had a hair cut in 7 months, so instead of pulling from my self care sinking fund, I simply cash flowed the hair cut with my tax refund.

The important thing is to be mindful of the money.

This is with all of our money, normal income or a windfall of money, we need to be mindful of our money. When we aren’t mindful of it, it disappears without us knowing where it went. Be mindful of where the money is going, what purpose will you give this money.

A windfall of money can be a wonderful way to get your goals accomplished faster, or it can simply be thrown away. Make sure that doesn’t happen! By budgeting every month and then being able to budget this money to help you work on some long term goals, you will set yourself up for a much brighter financial future.

I personally used my tax refund to fill my moving out fund for the month of March ($500), paid for a hair cut ($40), and the rest is going to my student loans ($2,593.20). You need to figure out how this money will best serve you and your current needs, as well as your long term goals.

I’d love to hear how you’re allocating your windfall of money to best serve you in the comments!

Money Management

Home Renovations on a Budget

Home Renovations on a BudgetThis post may contain affiliate links. Check out my Disclosure Policy for more information.

Whenever people move they always want to make updates to their new homes, whether it is a new home, or a new rented apartment. It always is fun to make a space your own and add your touches to it.

This can be very expensive to do though. It is especially expensive if you are getting new furniture for your home. Each of those little projects really adds up and can leave you with a massive bill. But, that doesn’t have to be the case.

You don’t need to spend a ton of money to do these things and you certainly don’t need to go into debt to do these updates. Sometimes you need to get creative and think outside the box to make these ideas a reality, but they can be done on a budget.

Now, you may be wondering how I am writing a piece on home renovations when I live at home with my parents currently. I figured that may be a bit confusing. My boyfriend recently bought a fixer up and we have been fixing it up since day 1. Through this process, we both have picked up some great tips to save some money in the end and not to use debt in the process.

1. Look to garage sales and family furniture when doing a renovation.

It is amazing what people are giving away. Sometimes you can find the exact piece you are looking for from family, neighbors, or garage sales. If you get really lucky at a garage sale and they have a few pieces you are interested in, they will usually give them to you for cheaper.

When my sister and I were in college we needed to furnish our 2 bedroom apartment. We managed to furnish the whole thing for about $1,000. That included two bedroom sets, two desks, a couch, coffee table, and dining room table with chairs.

2. When doing renovations, paint everything yourself.

Painting isn’t always the most fun activity, especially when you have a lot to paint. However, hiring someone to come paint for you, can be incredible expensive. If you can get some friends to help you, order some pizza and drinks and you’ll have the place painted in no time.

By painting the place yourself, you will save so much money just in this one area. If you are going to be painting by yourself, I suggest you separate the areas and complete them one day at a time. This way you won’t get burnt out of painting, but will be more excited to see the spaces transform. It’s amazing just what paint can do to a space!

3. YouTube will be your best friend when doing renovations.

It is amazing what tutorials you can find on YouTube and I highly recommend you trying to do a lot of renovations on your own, if you feel comfortable. My boyfriend replaced a sink faucet and 2 toilets in his house just from looking up some tutorials. This alone saved him $300 in labor because they were asking for about $150 just to install one toilet.

Of course, if you watch the tutorials and you just don’t feel comfortable with doing it, then find someone that can do it for you. Sometimes, it’s worth it to get it done correctly.

4. Cash flow everything.

When you cash flow a renovation, it will take longer to complete. However, not having the burden of the debt months later will make it so much nicer to live in. When doing renovations, I would make a list of everything you would like to do and then make a list of the practical order to complete them. For example, it is easier to paint before you redo any flooring, that way if you spill paint, it doesn’t matter.

After you have this list made, you need to decide what you can do on your own with the money you currently have set aside for this and what needs to be cash flowed still. This will allow you to price out projects and add it into your budget. If you need help creating a budget, I have a template for you to use!

By cash flowing renovations it will take longer and you will be living in a work in progress for a bit, but you won’t have a bill every single month or interest.

The biggest part of making renovations is to keep in mind how much everything is going to cost, buy quality materials, and find ways to save money where you can. Don’t be concerned about working in a constant state of renovations, it will be worth it in the end not to have any lingering debt. How have you made home renovations on a budget?


Money Management

Why Your Income Doesn’t Matter

Why Your Income Doesn’t Matter

This post may contain affiliate links. Check out my Disclosure Policy for more information.

Most of the time, one of the first things people say when they are beginning to get their finances together is that they don’t make enough money. This just isn’t true. Your income really doesn’t matter when it really comes down to it.

Of course, having a higher income does make things easier when it comes to reaching financial goals, but you can make a ton of money and have absolutely nothing to show for it.

You hear it all the time, athletes making millions a year and are declaring bankruptcy. But, they had a high income? How could they possibly be bankrupt?

It’s because they don’t know how to manage that income. They weren’t managing all their cash flow and sent it all out to stuff. No matter what your income is, if you aren’t managing your money, it doesn’t matter.

Why your income doesn’t matter.

If you can manage your money well, you can easily reach any financial goal you have for yourself. It may take longer on a lower income, but it can happen. The reality is that all it takes is proper management of your money and you can reach any goal you want.

Being able to properly manage your income is so important, especially if you have a lower one. When you have less money to work with, it can be a careful balancing act when managing your money. But, it can be done.

By carefully managing your money, you can pay off that debt, you can invest your money, you can save for that house. Whatever you want to accomplish, you can do on any income, if you carefully manage your money.

Don’t be afraid to do the work because you don’t think you have the income to do it. Look at your numbers, track your expenses, create a budget, and get working on those big financial goals.

How to manage your money.

The first big step is to get a real picture of your current finances. Where are you at currently with your money. This can be scary, realllllllly scary. The day I added up all of my student loans still haunts me and that was four years ago!! At that point, I was making roughly $1,100 a month, going to grad school full time, and had no idea where my life would be after I graduated with my 6 figures of debt.

I knew my income would be higher after I graduated, but the reality was, it wasn’t going to be enough to afford my student loan debt. I knew I had to very strictly manage my money, if I was going to make some pretty big changes, if I was going to make this all work.

I created a zero based budget for myself and stuck with it. As the weeks and months passed, I started making choices on what I valued to spend my money on. It was amazing how my lifestyle changed to reflect the things I valued. It was also amazing to have control over my money and to see my savings grow and having leftover money to apply to debt.

I continued to use these same money management techniques once I got my first teaching job, which came with a higher income. I didn’t change my lifestyle though to reflect it. I continued to budget for the things I valued and continued to make debt payoff a priority. I also added additional income streams to allow me to reach my debt freedom sooner and have paid off $115k to date.

The best part about managing your money is that you begin to think of purchases differently. You begin thinking about what you value more, this purchase or reaching your financial goals sooner. You’ll also start looking into ways to reach your goals faster, I personally refinanced my student loans with Earnest, use my link to get $200 when you refinance with them!

When it comes down to it, your income doesn’t matter. If you don’t manage your money properly, having more of it doesn’t help you. I am so grateful for my grad school year and making such a small income because it taught me how to manage my money. How has managing your money changed your life?


Money Management

How to Get Ahead When You Can’t Afford Payments

How to Get Ahead When You Can't Afford Payments

This post may contain affiliate links. Check out my Disclosure Policy for more information.

Recently in the news it was shared that 7 million Americans are 3 months behind on their car payments. Not surprisingly, the age group that was most represented were twenty somethings. They shared that it is most likely because this age group are struggling to afford their car payments with their student loans.

I’ve been there. My payments were $2,000/month when I first graduated and I was only making about $3,000/month as a teacher with a master’s degree. And the only reason I was making this much was because I was in New Jersey, where cost of living is high. I couldn’t afford housing here, so I moved back home with my parents.

I know this isn’t an option for everyone, but without this, there would have been no way of affording to live back then with that large of a payment. Without moving back home, I never would have made a significant dent in my student loans and lowered my payments to $1,100/month, which it is now after paying off $115k.

As a twenty something, it is hard to manage money. No one teaches us this, unless you are lucky and came from a family who made sure you knew how. It’s expected for us to just figure it out. I am so happy that I’m starting to see high schools require classes in it, but that’s only just starting now.

The only reason I learned to manage my money was because I was absolutely scared out of my mind when I found out my minimum student loan payment. I had no choice but to do my research and figure out how to manage a budget, so I could make my minimum payments.

These are the steps I followed when I knew I couldn’t afford my minimum payments.

1. Create a honest budget with all of your payments and actual spending.

We all have the budget we want to see. You know, no eating out, no coffees, no shopping and no frivolous spending. The reality is that isn’t what we do. Look back to your last month of spending and create a budget using it. If you need help creating a budget, I have a template you can use.

You may be thinking this is counter productive, but I promise this is probably the most important part of this process. Write down everything, down to the penny for all of your spending. Categorize it into different variable spending categories, groceries, gas, coffee, eating out, etc. Your categories are going to depend on what you spend money on.

Have your income at the top and then all of your expenses and total each category up and then your total expenses.

2. Evaluate your spending habits.

Where did your money go last month? Really look at your spending and evaluate if your choices brought value to your life. You’ll probably see that small expenses snowballed throughout the month to be large expenses at the end. We don’t realize how much these small joy expenses really make a huge difference when they accumulate throughout the month.

When I did this when I was still in grad school, panicking about my minimum payments, I remember seeing that I spent $150 at Chipotle in one month. That’s an absurd amount of Chipotle, but the reality was that it was across the street from the education building on campus. It was super convenient when I was working full time and going to school full time to just grab dinner on my way to class.

This was an easy fix for me, I started meal prepping my dinner, like I did with my lunch. I allowed myself one Chipotle night a month when I had my once a month double class after working 8 hours.

3. Make big changes when you can’t afford your payments.

Chipotle isn’t going to make or break your budget. The reality for me once I graduated was that I literally wouldn’t be able to afford to live in New Jersey. The cost of housing is just absolutely ridiculous and I couldn’t find anything for less than $1,000/month. That’s when I reached out to my parents to hear what they thought about me moving back home.

This obviously isn’t something everyone can do, but what I do encourage you to do is to get creative about your living situation when you can’t afford your payments. There are so many ways to lower your monthly living expense. If you live in a city, can you use Airbnb to rent a room or multiple rooms to bring in extra income? Can you get a roommate?

Get creative about the areas that you have to keep in your budget to cut down on these expenses.

4. Make changes to cut down on your expenses.

Now that you have seen where your money is actually going, start looking to see where you can cut expenses. Keep the things that bring you happiness and value, but get rid of things that don’t. For me, I value spending time with the people I love, so I do keep money in my budget to spend eating out. But, I won’t grab take out just for myself out of convenience anymore.

This has cut down drastically on this expense for me and I almost always remember the memories I make when I spent that money. For me, that’s money well spent.

5. Increase your income.

I love working side jobs, they have completely changed my life, especially since I haven’t received a raise from teaching since 2016. I strongly encourage everyone to have more than one source of income, just in case you lose one, you have others to fall back on. If you can find a side job that you love doing, it really is a great way to make some extra money to help you afford your payments.

It can be hard when you are in this situation to think about your options, but just remember, there are always options for you. Sit down, create a plan, and stick to it to get yourself in a better position to afford your payments easily. How have you fixed your financial situation?

Money Management

Why a Smaller Tax Refund is Better

Why a Smaller Tax Refund is Better

This post may contain affiliate links. Check out my Disclosure Policy for more information.

Tax season is upon us, friends! Being a personal finance nerd, I love this time of year. I love getting my documents together and seeing where I am at in comparison to where I was at the end of the previous year. It’s awesome to see how I have progressed on my big money goals.

Normally, I get a pretty large refund and it’s nice to get that big check to apply to debt, but the reality is that it just doesn’t make sense! The money you get in a tax refund check is just the money that the government took from you throughout the year. This is money that should have been in your back pocket throughout the year, it’s the money that you overpaid.

However, you should make sure that you get some sort of tax refund each year, this way you don’t have to owe taxes. You should figure out what you need to claim in order to get a small tax refund. This will allow your paychecks to be larger throughout the year and you still won’t owe at tax time.

There are a few things you can do when it comes to tax refunds to make sure you are prepared to file.

1. Check out the withholding calculator and fill out your W-2 correctly to get a small tax refund.

The truth is that sometimes it’s easier to just claim 0, just a big refund and call it a day. But the reality is that there are resources out there for us to use, so we don’t have to do this. Plus, like I said before, a large refund just means that you overpaid every single month. This is money that can be in your pocket every month!

This is why my first suggestion is to head over to the IRS website and check out their withholding calculator this will allow you to quickly see where you stand. After you finish the withholding calculator, you will have a better idea of what you should be claiming on your W-2 so that you get a small tax refund and more money in your wallet every month!

2.Organize your documents as you receive them.

The best thing I ever did for myself was create a specific place for my finances. I have everything in a folder for my taxes and add to it as my documents start rolling in. This makes filing my taxes so much easier. When I have all my documents ready, I can easily sit down and file them.

I used to be a hot mess with my tax stuff. Things would be everywhere and it would take me forever to find everything to file. It honestly was something I dreaded doing every single year, until I started keeping my paperwork organized. Organization is definitely key in filing your tax return.

This is especially important if you have complicated taxes or something that you need to keep track of throughout the year. For example, as a teacher I would be able to claim $250 I spent for my classroom, I’d need to keep my receipts throughout the year for this. Organization made this super easy for me!

3. If taxes aren’t taken from your pay, make sure you create a sinking fund for this!

I can’t stress this enough! If you have a profession that does not take taxes from you, you absolutely NEED to create a sinking fund for this. Taxes are not an emergency, we know they happen every single year, we need to prepare for our taxes. Tax time should not derail our finances, it should be a simply file and pay, if we aren’t paying taxes throughout the year.

By creating a sinking fund, tax time will be a breeze because you will already have the money in your account to pay your taxes. My suggestion is to take at least 30% out of any pay you receive and put it into a sinking fund for taxes. If you don’t need this much at tax time, then you can choose what to do with this money.

The easiest way to do this would be to budget for it every month, this should be a line item in your budget. If you need help with this, you can subscribe to my email list to get a PDF of my budget template, or you can purchase my Google sheets template that has the math formulas already inputted for you.

Remember a smaller tax refund means that you are claiming the right number on your W-2!

I feel like a lot of times people brag about their big tax refunds when in reality, it just means they are giving their money away each month for that big check. By changing your number on your W-2, it will allow you to get that money throughout the year, instead of in a large check once a year! Have much are you getting in your tax refund?