Understanding your cash flow is all about knowing where your money comes from and where it’s going. Ideally, you have more money coming in than going out — but that’s not the reality for everyone. Whether you want to stop living paycheck to paycheck, need extra cash to pay off debt or want to save for a future goal, knowing how to increase cash flow can help you get there faster.
As you become more familiar with your saving and spending habits, it will be easier to know which levers to pull to keep your monthly cash flow strong.
How to increase cash flow
Your net cash flow is your monthly income minus your monthly expenses.
The higher your net cash flow, the better. This gives you more flexibility in working toward your financial goals and liquidity to weather the unexpected. These five simple tips could help you increase personal cash flow:
Depending on your situation, bringing in more money may be easier than cutting back on expenses. The good news is that there are plenty of ways to do it.
Start with your paycheck. Use the IRS’ withholding calculator to make sure you’re not having too much federal and state tax withheld from your paychecks. If you are, you can fill out a new W-4 to give to your employer.
Next, review your deductions to make sure you don’t have any unnecessary items taken out every paycheck.
Are you paying for an insurance plan that you’re not using? Maybe you can downgrade to a lower tier to save money. Perhaps you’re donating a portion of your paycheck to charity. Is it possible to reduce your contribution or hold off until you’re more confident in your financial situation?
Finally, look for options to increase your income through more work. This can include asking for overtime at your day job, starting a side business or performing odd jobs. The more income streams you create, the easier it will be to maintain a higher cash flow.
While earning more income makes it easier to increase personal cash flow, it also makes it easier to spend more.
If you have a budget, it may have been a while since you last evaluated it. Over time, needs and expenses change. Take a long, hard look at your budget and decide if there’s anything you can reasonably cut.
If you don’t have a budget, now is a good time to look at where your money is going and where you can stop any “bleeding”.
For example, if you’re paying for multiple streaming platforms like Netflix and Hulu on your own, consider cutting one subscription. There are also some public libraries that offer free video streaming services that you can look into. Have you been living off DoorDash and Grubhub? Set a goal to cook for yourself more often. Each note you make about how you can improve your budget should include a dollar goal.
After you’ve set your goals, keep track of your transactions to make sure your spending is in line with them. Over time, it’ll become easier to eliminate certain expenses to stay within your budget.
If you’re like many Americans, you have credit card bills, one or more auto loans, student loans, a mortgage or medical debt — or possibly all of the above.
If you’re one of the many people with debt, getting rid of it is a highly effective way to increase your cash flow. And a couple of the best strategies for doing so are the debt snowball and debt avalanche.
Each method is a bit different in regards to which loans you target, but both encourage you to pay off one loan as quickly as possible, then apply that payment to your next loan until it’s paid off and so on.
Once you’ve paid off one loan, you’ll free up the cash you were putting toward the monthly payment. What’s more, if you put that extra cash toward your other debts, you can accelerate your debt payoff.
If you’re not in a position to pay off your debt more quickly, another option is to refinance your debt. You can refinance most types of loans, including student loans, car loans and home loans. If you have high-interest credit card debt, you can consolidate it with a personal loan, which typically offers a lower interest rate.
Take stock of each of your loans and shop around to see if there’s a way to get a lower interest rate. Then use a refinancing calculator to determine if the savings are worth it.
If you qualify, refinancing can lower your interest rate, your monthly payment or both.
With a lower interest rate, you’ll also pay less in interest over the life of the loan. And a lower monthly payment means you free up a little extra cash every month to put toward your financial goals.
Even if you’re working on all of the four preceding tips, there are certain expenses that can come up at random and throw off your progress.
A semiannual car insurance premium, your Amazon Prime annual membership fee and the holidays are almost routine each year. But since they happen so infrequently, it can be tough to plan for them.
Keep a list of each of your recurring expenses that don’t come up every month and consider putting a small amount of money into a separate savings account each month. That way your cash flow can stay steady throughout the year and you won’t be derailed by these expenses.
Increase personal cash flow to reach your goals
If you’re cash flow negative or neutral, learning how to increase cash flow is the best thing you can do to reach your financial goals. There’s no one best way to do it, but it is important to find something that works for you.
Create a plan based on your situation and the available options and set short- and long-term goals to put that plan into action. It may take some time to make significant improvements, but over time you’ll see how little changes can make a big difference.
Rebecca Safier contributed to this report.
Interested in refinancing student loans?Here are the top 9 lenders of 2022!
|Lender||Variable APR||Eligible Degrees|
|1.74% – 6.52%1||Undergrad & Graduate|
|1.99% – 5.89%2||Undergrad & Graduate|
|2.50% – 6.85%3||Undergrad & Graduate|
|1.89% – 5.90%4||Undergrad & Graduate|
|1.74% – 7.24%5||Undergrad & Graduate|
|1.90% – 5.25%6||Undergrad & Graduate|
|1.88% – 5.64%7||Undergrad & Graduate|
|1.86% – 6.01%||Undergrad |
|2.13% – 5.25%8||Undergrad & Graduate|
|Check out the testimonials and our in-depth reviews!
1 Important Disclosures for Splash Financial.
Splash Financial Disclosures
Terms and Conditions apply. Splash reserves the right to modify or discontinue products and benefits at any time without notice. Rates and terms are also subject to change at any time without notice. Offers are subject to credit approval. To qualify, a borrower must be a U.S. citizen or permanent resident in an eligible state and meet applicable underwriting requirements. Not all borrowers receive the lowest rate. Lowest rates are reserved for the highest qualified borrowers. If approved, your actual rate will be within a range of rates and will depend on a variety of factors, including term of loan, a responsible financial history, income and other factors. Refinancing or consolidating private and federal student loans may not be the right decision for everyone. Federal loans carry special benefits not available for loans made through Splash Financial, for example, public service loan forgiveness and economic hardship programs, fee waivers and rebates on the principal, which may not be accessible to you after you refinance. The rates displayed may include a 0.25% autopay discount
The information you provide to us is an inquiry to determine whether we or our lenders can make a loan offer that meets your needs. If we or any of our lending partners has an available loan offer for you, you will be invited to submit a loan application to the lender for its review. We do not guarantee that you will receive any loan offers or that your loan application will be approved. Offers are subject to credit approval and are available only to U.S. citizens or permanent residents who meet applicable underwriting requirements. Not all borrowers will receive the lowest rates, which are available to the most qualified borrowers. Participating lenders, rates and terms are subject to change at any time without notice.
To check the rates and terms you qualify for, Splash Financial conducts a soft credit pull that will not affect your credit score. However, if you choose a product and continue your application, the lender will request your full credit report from one or more consumer reporting agencies, which is considered a hard credit pull and may affect your credit.
Splash Financial and our lending partners reserve the right to modify or discontinue products and benefits at any time without notice. To qualify, a borrower must be a U.S. citizen and meet our lending partner’s underwriting requirements. Lowest rates are reserved for the highest qualified borrowers. This information is current as of January 19, 2022.
2 Rate range above includes optional 0.25% Auto Pay discount. Important Disclosures for Earnest.
Interest Rate Disclosure
Actual rate and available repayment terms will vary based on your income. Fixed rates range from 2.69% APR to 6.04% APR (excludes 0.25% Auto Pay discount). Variable rates range from 1.99% APR to 5.89% APR (excludes 0.25% Auto Pay discount). Earnest variable interest rate student loan refinance loans are based on a publicly available index, the 30-day Average Secured Overnight Financing Rate (SOFR) published by the Federal Reserve Bank of New York. The variable rate is based on the rate published on the 25th day, or the next business day, of the preceding calendar month, and using the daily interest rate based on actual days in the year and rounding up, plus a margin and will change on the 1st of each month. The rate will not increase more than once per month. The maximum rate for your loan is 8.95% if your loan term is 10 years or less. For loan terms of more than 10 years to 15 years, the interest rate will never exceed 9.95%. For loan terms over 15 years, the interest rate will never exceed 11.95%. Please note, we are not able to offer variable rate loans in AK, IL, MN, NH, OH, TN, and TX.
3 Important Disclosures for CommonBond.
Offered terms are subject to change and state law restriction. Loans are offered by CommonBond Lending, LLC (NMLS # 1175900), NMLS Consumer Access. If you are approved for a loan, the interest rate offered will depend on your credit profile, your application, the loan term selected and will be within the ranges of rates shown. All Annual Percentage Rates (APRs) displayed assume borrowers enroll in auto pay and account for the 0.25% reduction in interest rate. All variable rates are based on a 1-month LIBOR assumption of 0.15% effective Jan 1, 2021 and may increase after consummation.
4 Important Disclosures for Laurel Road.
Laurel Road Disclosures
All credit products are subject to credit approval.
Laurel Road began originating student loans in 2013 and has since helped thousands of professionals with undergraduate and postgraduate degrees consolidate and refinance more than $4 billion in federal and private school loans. Laurel Road also offers a suite of online graduate school loan products and personal loans that help simplify lending through customized technology and personalized service. In April 2019, Laurel Road was acquired by KeyBank, one of the nation’s largest bank-based financial services companies. Laurel Road is a brand of KeyBank National Association offering online lending products in all 50 U.S. states, Washington, D.C., and Puerto Rico. All loans are provided by KeyBank National Association, a nationally chartered bank. Member FDIC. For more information, visit www.laurelroad.com.
As used throughout these Terms & Conditions, the term “Lender” refers to KeyBank National Association and its affiliates, agents, guaranty insurers, investors, assigns, and successors in interest.
Assumptions: Repayment examples above assume a loan amount of $10,000 with repayment beginning immediately following disbursement. Repayment examples do not include the 0.25% AutoPay Discount.
Annual Percentage Rate (“APR”): This term represents the actual cost of financing to the borrower over the life of the loan expressed as a yearly rate.
Interest Rate: A simple annual rate that is applied to an unpaid balance.
Variable Rates: The current index for variable rate loans is derived from the one-month London Interbank Offered Rate (“LIBOR”) and changes in the LIBOR index may cause your monthly payment to increase. Borrowers who take out a term of 5, 7, or 10 years will have a maximum interest rate of 9%, those who take out a 15 or 20-year variable loan will have a maximum interest rate of 10%.
KEYBANK NATIONAL ASSOCIATION RESERVES THE RIGHT TO MODIFY OR DISCONTINUE PRODUCTS AND BENEFITS AT ANY TIME WITHOUT NOTICE.
This information is current as of April 29, 2021. Information and rates are subject to change without notice.
5 Important Disclosures for SoFi.
Fixed rates range from 2.49% APR to 7.59% APR with a 0.25% autopay discount. Variable rates from 1.74% APR to 7.24% APR with a 0.25% autopay discount. Unless required to be lower to comply with applicable law, Variable Interest rates on 5-, 7-, and 10-year terms are capped at 8.95% APR; 15- and 20-year terms are capped at 9.95% APR. Your actual rate will be within the range of rates listed above and will depend on the term you select, evaluation of your creditworthiness, income, presence of a co-signer and a variety of other factors. Lowest rates reserved for the most creditworthy borrowers. For the SoFi variable-rate product, the variable interest rate for a given month is derived by adding a margin to the 30-day average SOFR index, published two business days preceding such calendar month, rounded up to the nearest one hundredth of one percent (0.01% or 0.0001). APRs for variable-rate loans may increase after origination if the SOFR index increases. The SoFi 0.25% autopay interest rate reduction requires you to agree to make monthly principal and interest payments by an automatic monthly deduction from a savings or checking account. This benefit will discontinue and be lost for periods in which you do not pay by automatic deduction from a savings or checking account. The benefit lowers your interest rate but does not change the amount of your monthly payment. This benefit is suspended during periods of deferment and forbearance. Autopay is not required to receive a loan from SoFi.
6 Important Disclosures for LendKey.
Refinancing via LendKey.com is only available for applicants with qualified private education loans from an eligible institution. Loans that were used for exam preparation classes, including, but not limited to, loans for LSAT, MCAT, GMAT, and GRE preparation, are not eligible for refinancing with a lender via LendKey.com. If you currently have any of these exam preparation loans, you should not include them in an application to refinance your student loans on this website. Applicants must be either U.S. citizens or Permanent Residents in an eligible state to qualify for a loan. Certain membership requirements (including the opening of a share account and any applicable association fees in connection with membership) may apply in the event that an applicant wishes to accept a loan offer from a credit union lender. Lenders participating on LendKey.com reserve the right to modify or discontinue the products, terms, and benefits offered on this website at any time without notice. LendKey Technologies, Inc. is not affiliated with, nor does it endorse, any educational institution.
Subject to floor rate and may require the automatic payments be made from a checking or savings account with the lender. The rate reduction will be removed and the rate will be increased by 0.25% upon any cancellation or failed collection attempt of the automatic payment and will be suspended during any period of deferment or forbearance. As a result, during the forbearance or suspension period, and/or if the automatic payment is canceled, any increase will take the form of higher payments. The lowest advertised variable APR is only available for loan terms of 5 years and is reserved for applicants with FICO scores of at least 810.
As of 11/15/2021 student loan refinancing rates range from 1.90% APR – 5.25% Variable APR with AutoPay and 2.49% APR – 7.75% Fixed APR with AutoPay.
7 Important Disclosures for Navient.
8 Important Disclosures for PenFed.
Annual Percentage Rate (APR) is the cost of credit calculating the interest rate, loan amount, repayment term and the timing of payments. Fixed Rates range from 2.89%-4.78% APR and Variable Rates range from 2.13%-5.25% APR. Both Fixed and Variable Rates will vary based on application terms, level of degree and presence of a co-signer. These rates are subject to additional terms and conditions and rates are subject to change at any time without notice. For Variable Rate student loans, the rate will never exceed 9.00% for 5 year and 8 year loans and 10.00% for 12 and 15 years loans (the maximum allowable for this loan). Minimum variable rate will be 2.00%. These rates are subject to additional terms and conditions, and rates are subject to change at any time without notice. Such changes will only apply to applications taken after the effective date of change.