Whenever I ask my friends and family members to save and invest more, they say they are stranded for money because of various commitments. Are these commitments worthy? If yes, how to increase monthly cash flow to invest more? Here are five simple tips to increase cash flow:
1) Surrender bad insurance policies
This is probably the primary reason for having a stranded cash flow. Insurance needs to be bought; however, unfortunately, it’s being sold to us. This is the reason why we keep buying policies whenever an agent approaches us with his new tactics. If you hold too many insurance policies, make sure you surrender the bad ones immediately. Surrendering these policies can increase your monthly cash flow substantially. You should not need more than one or two insurance policies to secure against any unforeseen incident. More importantly, avoid mixing insurance and investment.
2) Minimize tax outgo
Tax is also a very important aspect of everyone’s cash flow. As we all know, higher the income, higher the tax outgo. However, decent tax planning can minimize the tax outgo. Tax planning is not all about Section 80C. There are several sections in income tax act which help reduce the income tax payable. You need to do some research on these and plan your investments well in advance rather than rushing in the last minute. Also, tax planning has to be your second priority. Investments should always be number one.
3) Utilize online discounts
Options are plenty for those who want to save money. Just compare well before making any purchase. There are several portals which help you compare prices of products across various categories. You also hold the chance of grabbing hot deals frequently. Also, lot of portals offers coupons which can be utilized to book movie tickets, pay mobile bills, book hotels and flight tickets, etc.
4) Create second source of income
This is a famous saying from the great investor Warren Buffet. He always insists on creating a second source of income. This will mean that you can invest more to reach your goals. You can look into various options such as part time online jobs, teaching in free time, etc. You can also invest in dividend yielding stocks so as to receive regular income.
5) Clear high interest loans
We love to take loans. These days, loans come in attractive packages. Banks offer personal loans, credit card loans, gold loans and what not. Personal loans and Credit card loans come at huge interest rates which can kill your financial life sooner than later. It’s advisable not to opt for such loans. However, if you have already opted for such loans, make sure you clear them off at the earliest. There may be some prepayment charges on early foreclosures, though.