6 Steps to Improving Personal Cash Flow, So You Can Be Like Your Own CFO

Picture this: It’s the end of the month, you’ve paid all your bills, and even had a little fun. You’ve made ends meet, as you always do, but your savings account isn’t growing and there’s nothing left to fund an emergency should one arise. Sound familiar? If you’re just breaking even—or worse, excess spending (spending more money than you’re taking in)—you’ve got a personal cash flow problem.

Maybe you’ve been living this way for a while, and it now feels normal. But here’s the deal: Without a positive cash flow (meaning you earn more than you spend), it’s hard to get ahead financially. Until you’re in the black, you could be shut out of good financial opportunities—including getting low interest rates on personal loans, or a mortgage loan, or even student loan refinancing. You’re also missing out on the money you could be earning by investing what you save.

The good news is, it’s possible to turn that around. You’re the Chief Financial Officer of your life, so it’s up to you to learn exactly how to improve your monthly cash flow. It will take some work, but by increasing your income and lowering your expenses—both fixed (rent, utilities, and car payments), and discretionary (entertainment and clothing)—you can make dramatic shifts in your financial life. Follow this six-step plan, and you’ll see your monthly cash flow move from negative to positive even faster than you’d expect.

1. Ask for a raise—and get it

A salary increase is the easiest, quickest, and most sustainable way to improve your personal cash flow—and it requires the least amount of effort. But you must first muster the confidence to ask for one.

Unfortunately, most employees are reluctant to ask for a raise. According to a 2016 survey by Payscale, over half of respondents have never asked for a salary increase in their current field, because they believe it’s awkward to talk money with a manager. We get it. But you’ll never get a raise if you don’t ask for one. So, assess your market value, get words of encouragement from peers and your financial mentor, learn what not to say when asking, and break that ground.

2. Get your side hustle on

Got a special talent? Today, you can market your unique skills to make extra cash in ways that just weren’t possible 10 years ago. Sites like Hourly Nerd, Expert360, and SpareHire allow you to create a profile and bid on jobs as an independent consultant or business expert. By taking on additional projects, you’ll gain experience that will pad your resume and uncover opportunities to make new connections. You might even find yourself entertaining an offer for a new—and better paying—position.

3. Take a hard look at your spending

This goes beyond making coffee at home and skipping the fancy latte, or cancelling the gym membership you use once a month—we’re sure you’ve heard all the traditional tips. We’re talking about using technology to up your cash flow game.

The automated nature of our lives is great, but you might be getting billed for services you no longer use. How many “free trials” have you signed up for and never cancelled? Sites like Truebill and Trim can help you find and cancel subscriptions. Both companies can request refunds on sketchy fees and negotiate lower payments on some bills (like your confusing cable bill). Trim also tracks your account balances in real time and—to make things even easier—allows communication via text.

From a health standpoint, if you’ve had a recent medical procedure and you feel the charges are questionable, take a look at Remedy. Just upload your bill and the app identifies potential mistakes, and can negotiate savings for you.

Also, consider deleting the auto-fill option for accounts at online shops. If you’re forced to re-enter your credit card number every time you make a purchase, you’ll think twice about whether you actually need it. And don’t forget to look into the different financial apps available—they’re designed to make your life easier.

4. Simplify life

We’re not saying you should sell everything and move to a tiny house—but take some time to think about what you really need, and what you can do without. You can probably cut your clothing budget without too much trouble. But is it possible to also downsize and relocate to a new apartment in a less trendy but more affordable area? What about clearing out that storage unit you’re blowing $200 on every month?

Simplifying life and decluttering is now akin to a movement—just look at Marie Kondo’s best-selling book The Life-Changing Magic of Tidying Up. A lifestyle that’s less focused on “stuff” can help you save money and, proponents say, fill your life with positive energy.

5. Get to know your debts—intimately

Being your own CFO means that your finances—including your debt—are under your control. So, crack the whip by tackling your highest interest debt first, including credit card, and student loan debt. If you don’t know your interest rates, it’s time to look them up and devise a payment plan. Perhaps you can even qualify for a personal loan or student loan refinancing.

Also, take a look at your debt to income ratio—your monthly debt payments divided by your gross monthly income. Let’s say your gross monthly income is $7,000, but each month you pay out $1,500 for rent, $600 for credit card bills, $500 for student loan payments, and $600 for other debt. Your debt to income ratio is 46% ( $3200 divided by $7000). A high debt to income ratio—typically over 43%—makes you riskier to potential lenders, and can cost you a new loan with a good rate. Imagine bringing your rent down to $1200, knocking $200 off that credit card payment each month, and bringing your student loans down to $300; your debt to income ratio would decrease to just 36%. Sure, you’ll still have work to do, but it’s an improvement.

Read Next: 5 Money Rules You Don’t Have to Follow

Keep your eyes on the prize

Once you’ve got a plan, it’s just a matter of staying on track. Create a budget you’re comfortable with, and stick to it. Then, reward yourself for small victories, and focus on your long-term goals. Successful CFOs are always looking at the big picture—you should do the same.

Finally, don’t forget to share what you’ve learned; you probably know someone who could use the advice. Support and encourage your friends, and then help each other stick to individual goals. By surrounding yourself with like-minded people, you’ll get ahead faster.

Once you start bringing your cash flow into the positive, it’s time to start generating cash for the long term. Learn more about how an investing account with SoFi can help.