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Increase Income by Managing your Cash Outflow


In a cash flow diagram, there are two money streams: the cash inflow and outflow. To increase one's cash flow is to manage these cash flow streams: earn additional income for the cash inflow stream and manage expenses and budgeting for the cash outflow stream.

Today, let us learn how to increase our cash flow by managing our cash outflow streams.

Increase income by learning to manage your cash outflow

Typically our cash outflow consists: our basic needs, our wants, lifestyle, debts or may even include vices.
Typical cash flow diagram
Basic Needs
The basic needs stream is a regular outflow which should always be taken into consideration. However, when a need becomes a want, that is a different story. Example: a cellphone is a need but when insisting that it should be an iphone 6, then that is a want.

Wants
Our wants stream consists of buying the latest gadgets, travels, experiencing a luxury dinner, or anything that involves unnecessary spending. Buying or spending for our wants does not have to be a bad thing but if our goal is to increase cash flow, then minimizing or eliminating our wants must be a decision. By the time we have the abundance of money, then we can buy and spend as much as we want.

Lifestyle
The challenge is when our wants become a need, it will result to a high level of lifestyle. "I can't wear a shirt without a crocodile logo on it! Else, I'm gonna die not fitting in my colleagues!" Then that's a very expensive lifestyle. Other examples include: riding a taxi when a jeepney or walking can suffice, daily starbucks coffee, consistent massage, spa or parlor, going to a cinema every new movie released, lunch out and dinner outs (where one can just go eat in a carenderia or have a packed lunch) and many more. Lifestyle is known to be the dark horse in building wealth: unless one knows how to live simply, it is very difficult to build wealth.

Debts
Debts have killed a lot of people's dreams. This is one of the biggest holes in our wealth bucket that depletes whatever income and savings we have. Debts should be minimized and ultimately, eliminated. 

Vices
These include cigarette smoking, beer and alcohol drinking, going to bars and clubs, drugs and other addictive activities that entails a lot of unnecessary spending! Not only will vices destroy our body, so will our relationships and wealth!

Our wealth bucket should contain a lot of income streams and controlled outflow streams
Managing our cash outflow includes elimination of debts and vices, delay gratification of our wants, having a simple lifestyle and managing expenses of our needs by learning how to do budgeting.

Remember, money not spent is money earned. Thus learning how to manage our cash outflow is a way to increase our total cash flow!

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