How to Turn a Cash Flow Crunch Around So You Have More Money

One of the biggest problems that I’ve seen clients struggle with is how to make it through a cash flow crisis.
When you run your own business a cash flow crisis can occur when a client unexpectedly quits, when you don’t end up with as much business income as you had anticipated or when the money that you said you were going to generate in the next month just doesn’t manifest (remember how you were excited to increase your income by several thousand dollars and it seemed quite doable when it was one or two month’s away but when the month arrives you suddenly don’t feel as confident about your ability to create income?)
You’re left with pinching pennies, freaking out and getting into arguments with your spouse about where the money is going to come from. And to make matters worst you have to deal with the perpetual question of, "how do I buy groceries or get clothes for the kids while making sure that I have enough money to pay the mortgage?"
If this describes you, you are dealing with the Cash Flow Crunch. It’s the clumsy dance of the struggling entrepreneur.
So what can you do to break free from this cycle of desperation?
The solution is to get out of financial denial and step fully into the waters of financial clarity. You absolutely must get 100% committed to being aware of your spending behaviors. Many of us are familiar about what it means to be conscious in our personal lives. You can use very similar principles to increase your awareness of your spending and to understand where you’re money is going.
We do this by creating a spending plan or budget. This may seem like a difficult task ¬–especially if you’re married. It’s often hard to stick to a budget for yourself – but how do you get your spouse to stick to agree to it as well? Even the most committed might sometimes want to throw their hands in the air and say, "It’s just not possible!"
Here are some quick tips to keep in mind for creating a budget or spending plan:
Create a spending plan that is realistic. Many people set out to create a budget only to give up a couple of weeks later because they’re unable to stick to it. One reason is often because they make a budget that isn’t realistic.
This can show up in many ways: not allowing enough money for groceries (Dave Ramsey recommends $50 per person, per week for grocery budgets) or not allowing enough money for unexpected and unanticipated expenses (many experts recommend setting aside 10% of your total expenses for unexpected expenses, this way you have some wiggle room).
View your spending plan weekly. It’s easy to create a spending plan and then set it aside and not look at. This isn’t going to do you a bit of good! You’ll want to keep your spending plan some place where you can easily see it or in the very least pull it out at least once a week so that you are aware of how much you’ve allotted for your most important spending categories. It’s especially helpful to be aware of the categories that you tend to overspend in.
Constantly work your spending plan while being patient and gentle with yourself! You’ll want to sit down and look at your spending plan with your spouse at least once a week to see if you’re on track with your spending and make tweaks in areas where you might be overspending.
Try to refrain from blaming and complaining! It’s great that you and your partner are able to sit down and talk together. As long as you’re willing to consistently do that you will be able to change your spending behaviors over the long run and get back and track.
A spending plan will support you in breaking out of the cash flow crunch cycle. And in the very least, you can see your cash flow shortages coming and you can navigate through them with more grace, ease and awareness until you’re able to increase your income. Awareness begets prosperity. As we become more aware of our exact situation then we more easily manifest what we really need to create. You are more motivated when you’re dealing directly with reality.
To get more tips on how to break out of the cash flow crunch cycle make sure you sign up for my free call. It’s happening next week on Thursday, August 11th…
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