Improving your Cash Flow

Posted 30 Jun 2014 by Melissa Allan

I often hear people talking about cash flow and how expensive things are, myself included! We tend to talk with our clients a lot about investments, insurance needs, estate and tax planning, but these subjects tend to bring up cash flow problems as well.

The fact is that many people are living pay check to pay check, and this pay check is one of your biggest assets -- if your cash flow stops most people would be in serious financial trouble. Here are some simple tips that can help you lower your debt and free up some cash flow now:

  1. Watch those bank fees! Often when I meet with clients I discuss this subject. Based on what I hear from clients, average bank fees can cost people $20 or more a month! My advice: consider a no fee bank account like President’s Choice. They don’t charge a monthly fee but also provide their customers with free cheques. You can use your debit card to make purchased an unlimited amount and as long as your cash withdrawals are from a CIBC or Presidents Choice ABM it is also free. You don’t have the in person services you would get if you used another bank but how often do you actually visit a bank teller anyway?
  2. Limit your visits to the grocery store! This is one area I need to work on myself. My children seem to go through yogurt, fruit, crackers, and bread quicker than I can buy it. I often find myself making an extra run to the store during lunch. Like many of us, I go for a simple bag of apples and come out with $40 worth of stuff that I actually don’t need as I do my “big” grocery shop visit on the weekends. I suggest weekly visits to the grocery store with a list and checking your cupboards first. I also suggest shopping at Walmart and other discount stores for your basic essentials. Our Halifax area stores have really expanded their food section and I cannot tell you how much money we save going there for some items compared to the local grocery stores.
  3. Watch your debt! Credit card debt is hard to get away from. The good thing is interest rates on things like personal lines of credit are very low now compared to previous years. If you have debt, check those interest rates! The prime rate is 3% and personal lines of credit are sometimes offered, depending on your overall credit score and other factors, at as low as a few percent above prime. If you have equity in your home, consider a Home Equity Line of Credit to get a lower interest rate; we’d recommend a Manulife One account which offers prime + ½%. As you get rid of one of your debt payments, take that installment and apply it to another payment. These consolidation strategies are good only if you reduce your borrowing room, by canceling your paid-off cards or reducing the limits, to avoid falling back into debt again. Being disciplined in this area will certainly help bring you to financial freedom.
  4. Make your own wine! (If you’re a wine drinker.) A decent bottle of wine costs anywhere from $16 to $20 at the liquor store. You may not drink wine or alcohol that much but if your family is anything like mine, we often entertain friends and family -- and my family is a big one! There are several places in Halifax that make the wine for you for a fee, or to bottle on site. You simply show up, pick out the type of wine to bottle, sprinkle the yeast, and go back in 6 weeks to bottle it. They do everything else! For a mid range wine kit I pay about $5 a bottle for the same quality of wine I get for the $16 to $20 bottles at the liquor store. 

I could go on with other tips but I truly believe that if everyone were to make an attempt at the ones I referenced above it would certainly improve your financial situation. Getting out of debt is hard and you’ll sink further into debt if you don’t track where you’re spending your money and how to free up some cash!