Morgan Ulmer CFP®

Morgan Ulmer CFP®

Certified Financial Planner® professional

Morgan joined the team in February, 2019 with 8 years of financial planning and financial literacy training under her belt. She is as comfortable working on complex financial planning engagements as she is helping young adults understand budgeting and debt management.

Cash Flow management is the engine that drives any financial plan. Even small improvements in money management can, over time, move you closer (or beyond!) your financial and life goals. Here are 7 cash management strategies worth trying out individually or together.

Tracking expenses

Tracking expenses creates an awareness that alone can modify spending. Just ask any nutritionist who advises their clients to track food intake! Some popular tracking apps and resources are:

  • Your financial institution may have in-house budgeting and spending apps and resources
  • Mint
  • Quicken
  • YNAB (You Need a Budget)
  • Pen & paper can work just fine too!

You do not need to track every single expense to manage cash flow well. If there are only a handful of spending areas that you are concerned about, you can focus on tracking those categories only to make sure your spending is in line with what you have budgeted.

Spending Allowance

Help manage spending by using a separate bank account that you top up monthly, bi-weekly or weekly with an affordable “spending allowance” for discretionary expenses. You can also use a cash system.

Monitoring Consumer Debt

Monitor your consumer debt every month to help you understand whether you were cash flow positive or negative. Consumer debt means credit card and line of credit debt. On the same date every month, add up all of your consumer debt and keep a log of the balance over the months. If the balance is not decreasing, then more detailed cash flow management techniques such as those mentioned above need to be implemented.

Relearn Four Key Words – “I Can’t Afford It”

David Chilton, author of The Wealthy Barber, hails this technique as one of the quickest and easiest paths to controlling one’s spending. While difficult to say at first, it becomes easier over time and puts you back in the driver’s seat.

From Chatelaine: You’re not going to limit friendships to income levels — it’s not going to happen. Instead, you have to develop other systems of restraint. You have to learn to say “I can’t afford it”.  I’m 49 and when I was in my early 20s people always said that — can you go for dinner? “No, I can’t afford it.” You almost never hear that now. It’s something that has to come back. Because when you’re asked to do things you can’t afford by other people who have more money or have less discipline than you do, you have to say you can’t afford to.

S-t-r-e-t-c-h Out Your Spending

Being a more conscious spender does not mean you must be miserly!  By stretching out how often you spend, you can continue to enjoy your life while remaining financially sustainable. For example,

  • Instead of… Eating out 2 times per week, eat out 1 time.
  • Instead of… Shopping weekly, shop monthly. 
  • Instead of…Having your hair done once a month, stretch it to every 6 weeks
  • Instead of…Replacing your phone/computer every year or two, work toward three.

Watch the big expenses

Although day-to-day spending can add up, the big decisions in our lives also affect our financial trajectory. Make prudent decisions on:

  • Home Renovations – We can quickly justify a home renovation to be a “need” instead of a “want”.  Unless the renovation is required for the structural integrity of your home, it may be able to be postponed until you are in a more secure financial position.
  • Travel – Be discerning about what travel is most meaningful to you, and prioritize your spending accordingly.
  • Vehicles – Buying quality used vehicles, and/or keeping your vehicles for 8+ years will save you thousands of dollars in vehicle payments.
  • Professional services –Before hiring outside professionals, first review to see if you can do some of the work yourself in order to reduce costs. 
  • Children – Whether young or older, the expenses related to children can be considerable. Concentrate your spending on areas that are in highest accordance with your family’s values, cutting back on expenses that are optional. For older children, do them a favour by encouraging their independence and gradually downloading responsibility for their own expenses.
  • Pets – For many Canadians, pets are a member of the family. Be aware that expenses can quickly rack up. If you have multiple pets, consider saving money by not replacing one or more of them as they pass on. 

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This information is of a general nature and should not be considered professional advice. Its accuracy or completeness is not guaranteed and Queensbury Strategies Inc. assumes no responsibility or liability.