You may have heard the term “cash flow” most often when talking about business financial matters but cash flow is also a personal finance matter. Cash flow is a necessity in conjunction with your personal budget. To have an adequate understanding of the importance and the point of cash flow is necessary in order for your personal budget to work for you.
Cash flow is essentially the money that flows in and out of your checking and savings accounts. If you are able to say that you have not bounced a check, haven’t needed to tale a loan to meet your financial needs, or have not used a credit card to pay for the basics, then you can probably also say you know how to properly manage your cash flow. Cash flow is the term used to describe the availability of money when you need it, or not having enough cash flow is the lack of cash when needed!
As more and more people are creating budgets to stay on track in a turbulent economy, it is important for those people to recognize their own cash flow situation and deal with it. Even if, on paper, your income meets your needs for paying bills, you still may not be off the hook. You’d be surprised at how easily you can work out your finances on paper or in a budgeting program, only to find that when it comes down to pay the bills or withdraw cash – the “cash flow” isn’t there.
If you get paid two times a month, but all of your bills are due at the beginning of the month, you may find that your struggle to make the ends meet in the middle of the month, after you have paid all of your bills. You have a cash flow problem – the money isn’t coming in when you need it, and if you aren’t extremely careful about what you do with the money as it comes in, you will experience problems mid-month in this scenario.
You still have to wait till the next payday to once again have cash on hand. Along with your budget, you need to learn how to forecast your figures each month to ensure that you have a buffer to meet unexpected expenses during the time you are normally short on cash. You have to change some of your payment due dates on your accounts, provided you are able and you don’t have to pay an extra fee to do so.
If you are capable of living a little beyond the paycheck-to-paycheck scenario, it may be wise to always keep about 2-3% of your gross annual income on hand that can act as a buffer during the times in between paychecks you find you are running short. This money can also operate like an emergency fund, by providing you cash during the times of unexpected expenses, like home or vehicle repairs, without having to rely on using your credit cards.
Working on establishing a solid budget for your family is important to your financial future and forecasting the amount of cash you have available each day is important to your present financial situation. Take the time to always account for your money and it will make it that much easier to never go over budget. This way you will always feel ahead of the game and can stop worry each day if all of your checks will clear and whether or not you can afford to pick up milk and bread at the store.
Tisha Kulak Tolar is a writer for DebtFreeDestiny.com where she regularly writes about debt consolidation, debt settlement and saving money.
Filed under Finances by on Dec 3rd, 2008. Comment. 
With the world’s financial markets in turmoil (and perhaps your own financial woes), everyone’s thoughts are on the color of money these days. But there may be some steps you can take to “green” your banking that may also help save you money, reduce your impact on the planet, and vote for a better, more sustainable future at the same time.
* Switch to online only banking. You can do this with your current bank by using the ATM/debit card they provide and their online bill pay services. Most banks do not charge for this service, or have a way to get around any fees (for example, Wells Fargo has free bill pay service if you have a direct deposit into your account). Also, some banks (like ING Direct) have “paperless” accounts that eliminate checks and paper statements, instead providing a debit card, ATM access and online bill paying service (you can usually have them issue a check for you if you need one).
* Get your bills electronically. Eliminate the shipping, paper statement, envelope (or 2 if they send a return envelope) and any extra leaflets they include. Saves not only paper and gas, but time and money as well (no stamps or trips to the post office). Check with your bank(s), utility companies, credit card issuers and more to see if they offer this option. Then pay through your online bill pay service.
* Nix the receipts. When you have the option, decline a copy of your receipt (i.e ATM machine, fast food, restaurants, etc.) Collectively this can add up to a lot of paper (saving trees and reducing the chemicals like chlorine used in processing), and in your household can leave you with less paper clutter to sort through.
* Buy recycled paper checks. Most banks and check services have a limited number of check designs made from recycled paper content. Choose from these. Or, you can buy your checks from The Check Gallery, Inc. which has a wide variety of designs and images, all of which are made from recycled paper. Another great benefit is that with many of these designs, 10% of profits are donated to environmental, conservation or other social causes.
* Choose a “greener” bank. Local credit unions are one great option. They are member-owned, not-for-profit, and many of them also invest in the local community. You can also find some larger regional or even national banks that follow sustainable and environmental business practices and invest in local communities and/or developing countries. A good place to start a search for these larger banks (also some local banks in larger cities) is the National Green Pages directory.
* Green your investment portfolio. Investments may be trickier in today’s market than your day-to-day banking. We don’t know yet if the market has “hit the bottom,” but when it does economic experts say it will be a great time to buy and get some great deals (some even suggest now may be a good time to buy). There are companies that will screen your portfolio for social and environmental causes (by both “negative” and “positive” screens. Negative screens will eliminate things you don’t want in your portfolio–like tobacco, alcohol, or other factors that may be important to you. Positive screens will include certain things that matter to you–like companies with strong environmental or social commitments.) You can also find these companies through the National Green Pages.
Some of these may seem like tiny steps. That’s precisely the point. If it’s easy for you, you will be more likely to make the change. Added together and multiplied, however, these baby steps on each of our parts can really contribute to a greener future for our children.
Nikkole Abbas has been doing her small part for the environment since 1996. She continues to learn more and now shares tips on 7Gens blog. Individuals and businesses can join the discussion at 7Gens. To get your recycled checks printed with vegetable-based ink, go to The Check Gallery, Inc.
Filed under Finances by on Nov 26th, 2008. Comment.
Today, one of the most popular and widely used forms of lending by borrowers is found within the field of payday loans. These loans can go by many different names, such as check loans, advances, payroll loans and short-term loans, but they all refer to the same financial procedure and situation. They are intended to be very short term. Money is given to the borrower only to last them until their next payday. While some people are paid every week, others are paid bi-monthly or monthly. The most popular form of pay for employees is once every two weeks. An individual’s situation is the basis for the length of their loan, but this needs to be proven in most cases with the individual’s pay stub.
The standards of applying are very relaxed when compared to more conventional loans, like personal installment ones. More traditional ones may ask for a number of additional requirements that payday loans and lenders do not ask for from their applicants. In most cases, they will only ask for proof of identification, proof of employment in the form of one or more stubs and, potentially, recent bank statements. However, individual companies and institutions will have their own specifications and standards in what they ask for from prospective borrowers.
In addition to lower standards, it is often much faster for individuals to borrow money through these companies than through a bank or large institution. There is also less pressure and formality involved by obtaining credit from them. Traditional advances often require a great deal of paperwork and it can take a potentially extensive period of time for the paperwork to be processed. Multiple meetings may also be requested of the applicant. To the contrary, short term advances usually necessitate very little paperwork. While individual lenders may have different turnaround times for their paperwork, most short-term loan companies will have an answer for the borrower anywhere between mere minutes and twenty-four hours.
One of the most impressive aspects for individuals is the fact that their individual credit is not checked. Traditional loans require credit checks, while short term ones do not. This is often very attractive to people since less-than-perfect credit can often result in higher interest rates and other such penalties. This means that anyone with a job, proof of identity and, sometimes, bank account information can apply for, and most often receive, a temporary advance. They are often standardized. As a result, the format, criteria and penalties are the same within a specific lending establishment no matter who is applying and what their individual credit rating may be. However, these aspects may, and often do, vary from institution to institution.
Oftentimes, they are administered by depositing the borrowed money into the borrower’s checking account shortly after the individual applies, and is approved for, such credit. Borrowers may spend the money in any way they want. The money can be used to finance part or all of a vacation, to pay off utility bills on time, to make a car installment or to cover the cost of an emergency acquisition. Possibilities for uses are essentially limitless since, unlike specific collateral credit like for a car, education or business, the money can be used however the borrower sees fit. When the due date roles around for repaying, the money is often automatically deducted from the account of the borrower and returned to the lending establishment without any hassle.
While most companies will take the proper precautions to make sure borrowers make enough money to pay the institutions back, there are situations in which some individuals will still not have the money necessary to repay them. In these situations, borrowers need to be very careful. Not only may borrowers be required to give back the total amount of their payday loan plus a late fee and any interest charges, they may also have to give their bank a bounced check fee. As a result, it is important that individuals borrow only what they need and what they can afford. Despite these important warnings and considerations, for individuals who are responsible and reliable, short term advances are some of the fastest, most convenient and most effective forms of lending borrowers can enjoy.
Credit Loan offers real answers for real solutions when you are looking for fast, reliable payday loans. For more information please take the time to visit Creditloan.com.
Filed under Finances by on Nov 26th, 2008. Comment.
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