BusinessDay

Know your cashflow builders and bleeders

Cash is the “blood” that circulates through the “body” of financial well-being and wealth creation. Danger is imminent when you lose more blood than your body makes.

Some medications, and certain types of food, will build your blood levels. On the flip side, injuries and inadequate intake of the necessary nutrients will make you bleed, reducing your overall blood volumes.

You don’t need to be a doctor to understand the importance of blood in the body.

Guarding your cash even more jealously is necessary in a season when inflation has become a global menace.

As the prices of products continue to rise across nations, with governments striving to steer economic policies in the right direction, consumers continue to bear the brunt of inflation.

Taking our personal finances more seriously has become necessary. Much more important, though, is the need to prioritize our financial well-being.

The amount of cash available to meet your needs is usually a marker of how financially well you are, and this article will show you how you can strengthen your cash builders and block your bleeders.

Read also: 7 tips to strengthen your personal finance in the remaining months of 2022

Here are ten (10) examples of cashflow bleeders. They are the hidden ways in which you are losing money every month, which you may or may not be aware of. They are your cash bleeders.

1. Subscriptions to which you have a strong emotional attachment.

It may be a waste of money to pay for cable TV when you already pay a monthly fee for an internet service that allows you to stream online. You could create a method of streaming programs that provides you with the same level of satisfaction.

2. Excessive and ostensibly minor transfer/ATM fees.

When you withdraw money all the time, you rarely consider that the interbank withdrawal fees will add up at the end of each period.

3. Paying premiums for things you can do by yourself e.g. eating out 5 days a week, when you can bulk cook and pack your lunch, or have someone offer that service to you at a reduced sum.

4. Food Wastages.

Wastage happens when you allow things to go bad in your refrigerator, and you end up throwing them away or cooking more than is necessary per time.

5. Leaving lights on in your home when not in use.

Turn it off when not in use. It’s a simple phrase that will help you save money at the end of the day.

6. Emotional attachment to brand names, when there are equally good or better alternatives.

Food items, fashion and clothing are areas where people bleed their cash, especially when they feel their social status is affected when they are not seen with some types of brands.

7. Shopping without a shopping list.

You tend to see everything on the supermarket shelves as necessary when you do not go shopping with a concise plan or list of things you really need.

8. The YOLO (You Only Live Once) mentality and the constant need to reward yourself.

Indulging all the time, under the premise: “I worked for it”, will make you bleed. Yes, you only live once. And you work so hard. However, be wary of excessive “compensation” that is not sustainable in the long run. Someone once said if you cannot pay for something 4 times, then you cannot afford it.

9. Taking advantage of sales and buying items you don’t need.

It’s not such a great deal when you later have to pay for it. It’s actually a bad move when you buy something you don’t need because it’s on sale.

10. Purchasing items that can be rented.

You can rent items you don’t use all the time, rather than buying and using them sparingly.

Here are five cashflow building tips:

1. Keep an eye on your bills and spending patterns.

Prioritize your need-to-have expenses over the nice-to-have ones. If you want to win with your cash, you have to consciously stay on top of your financial expenditures.

2. A credit inflow, no matter how little, is always more valuable than a debit outflow.

Don’t trivialize the inflows that can come to you from various legitimate sources. When you give value, money gravitates towards you. Identify how you can increase your sources of income. Constantly review how you can earn extra cash.

3. Examine your subscriptions and consider bill-sharing options.

Can you share a ride to work? Can you possibly bulk-shop with others and share the resultant costs?

4. Prevention is better than cure, as they say.

Take preventive measures for your health and your assets (cars, house maintenance), so you don’t end up spending more money fixing things.

5. Be brutally honest with yourself, set goals for the future, and commit to accomplishing them.

Financial literacy will help you cut down on sentimental purchases and giving in to the pressure of doing what others do.

Which of the bleeders or builders will you address this week?