Fix your cash flow issues

You have to get to the end of the month before you get to the end of the money.



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One of the sayings I used pretty often on Til Debt Do Us Part was, “You have to get to the end of the month before you get to the end of the money.” Having repeated this about 2 billion times (the show is in constant reruns), people still don’t get it.

If you’re in overdraft, if you’re using your credit card and not paying the balance off in full every month, if your line of credit keeps going up, you’re spending more money than you make. And you’re likely spending that money on the wrong things.

If you buy take-out coffee and then run out of money for the hydro bill, that’s just silly! Ditto if you spend the first half of the month living the good life and then spend the last week scrounging behind the couch cushions for milk money.

To make sure your money last all the way to the end of you month you’ve got to:

a) Allocate the money to cover your must-have fixed expenses like rent, car payments and insurance

b)  Allocate the money to cover your must-have variable expenses like groceries

c) Save for the future and for emergencies

If you have money left, you can decide how you’re going to enjoy it. If you miss on any one of the first three, try again.

If will power is your problem—that balance in your bank account looks like it’ll last forever so you tap it too fast at the start of the month—then you’ve got to move the money so you can’t spend it. That’s right, you need two accounts. Whatever you’re going to need to cover your must-have costs gets moved into the second account so you can’t “accidentally” spend it on nice-to-haves.

Of course, there are some people who genuinely don’t make enough to make ends meet. If you’re one of those people your options are to make more money and/or cut your costs until you’re living within your means.

Some people are just bone-lazy. I’ve met plenty of people who have told me they work a tough 37.5 hours a week so that’s enough, but who can’t live within their means. Grow up! If you want the toys and experiences of the folks who work 70 hours a week, you have to work 70 hours a week. If you want the luxury of time off to care for a family, to vegetate on the couch, or to “follow your passion,” then you can’t have the extras. You can have the money, or you can have the time, but you’ve got to choose. So, what’s it gonna be?

4 comments on “Fix your cash flow issues

  1. I'm a young teacher and it's funny to listen to conversations that go on in our lunch room day in and day out. For some reason, I feel lucky to have pursued a Bachelors in Finance because many of my colleagues are just spending way beyond their means. Truthfully, I feel that it's all because of the "Jones" effect and people just want to look wealthy rather than be wealthy… Shame it has come to this.


  2. I have to admit I love to shop, especially for clothes and shoes. To tame my wardrobe-shopping "Jones", I haunt thrift stores and consignment shops. I do shop with a list (no point buying more pairs of jeans if you don't need them just because they happen to be there and on sale). At the 'second hand' places you may not find what you need or the colour or size you are looking for one your first or even your second or third visit. But I have fun looking and when I do find something that meets my needs, I can get it at a great price!


  3. I do have a reserve amount of money in case of emergencies and have a good amount invested with no major debts. My income is pretty stable and is more than adequate to meet my monthly needs. This isn't a humble brag but my question is how necessary is it to have an emergency fund where the cost of a line of credit is so low and the money would probably yield a better return invested? Like if I can have say 25k in a line of credit (for me would be good for at least 8 months) does it make sense to really keep more than a couple thousand in chequing?


  4. This is really straightforward, Gail! Indeed, we can't get out of debt if we don't start fixing our finances.


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