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Maximizing Cash Flow

It's a term we've all heard of in business but how do you do it in your personal life? Aside from bringing in more money, which we'd all like to do, here are some tips on how to make the most of what's yours:

  • Throw out your debit card. There's nothing magical under that piece of plastic, except for hard dollars, which disappear from your bank account every time you swipe it. Think about how much money you need to spend each week on groceries, gasoline, newspapers, coffee. Put that much cash in your pocket at the beginning of the week. By Friday, you'll have something left over, because every time a greenback leaves your wallet, you feel it, unlike that mysterious plastic transaction.
  • If you carry a balance on your credit card, use a different card for day-to-day purchases. You can still love those credit card bonus points and airline miles! And there's nothing wrong with charging your purchases at the supermarket, pizzeria, gas station, and the places you visit on a regular basis, and then paying off those purchases at the end of the month. However, if there is already an existing balance on a particular credit card, you'll be charged interest on the balance and on the purchases you make throughout the month. For those routine items, use a card that starts at zero at the beginning of the month, and is back to zero by the end.
  • If you do use your ATM card for cash withdrawals, remember to make withdrawals from your bank or one of its affiliates. There's an old banker's saying: Fees pay salaries. If you withdraw funds at the Bank of High Fees you might pay up to $3 in fees for the privilege of withdrawing $20 from Bank of You. Find branches of your own bank to use, or try some convenience stores, like Wawa or Quick Chek. These stores often have fee-less ATMs.
  • Are you still mailing your bills every month? Try online banking.  It's often free of charge, it's convenient, your payments are less likely to get lost, and you save postage. If you mail 10 bills each month, that's a postage savings $4.40, or $52.80 per year. I'm sure you wouldn't mind an extra $50 in your wallet.
  • Be careful at the price clubs.  Just because something is bigger doesn't mean that it's cheaper. Know your prices. Your supermarket may charge less for fewer rolls of Charmin and they'll take up less space in your garage. And think about the time value of money. While the warehouse-sized Heinz ketchup container with eight bottles might be cheaper, do you really need seven bottles of ketchup in advance?  Use that money for something else you might need.
  • Try some of the free online money management tools such as mint.com, BudgetPulse.com, Rudder, and Expensr. They can help you create a budget and make your life richer.