5 Ways to Survive a Cash Flow Crisis
Cash flow management is an integral part of our personal and professional lives. Managing our daily expenses from groceries, utility bills, and recreational activities requires cash. The month-end can be a pretty challenging time for each individual as the in-hand cash levels can be low. For businesses, cash flow problems have led to 82% of companies failing.
The fundamental problem of cash flow shortage arises when cash inflows are lesser than outflows. This may result from unnecessary expenses, poor cash management, or low in-flows like salary or profits in the case of a business. There are numerous ways to deal with cash flow problems, which can help you overcome the phases of money shortage. Here are five ways you can survive a cash flow crisis:
1. Reduce Expenses
When you anticipate low cash levels soon, your best bet is to reduce your expenses as much as you can. If a purchase can be avoided till your next paycheck, you delay it. This is an ideal time to analyze your spending. Elimination of unnecessary overheads will save you and your business from any more cash flow crises in the future, protect you in case of an emergency, and generate revenue in the long run.
2. Organize a Garage Sale
Garage and yard sales are a great way to get rid of unnecessary items in your house or office space and earn some quick cash. If you are running low on money, you can earn some extra bucks through a garage sale. You should advertise your garage sales among your friends and family through Craigslist, Facebook, or other social media mediums. This will ensure that you get a lot of buyers and that your garage sale is successful.
3. Apply for Odd Jobs
If you are running low on cash at month-end and have few hours to spare each day, you can sell your skills and services instead. You can take up odd jobs, including walking your neighbor’s pet, car washing, helping older people with their groceries or home repairs, and dealing with minor home repairs.
If you have advanced skills, you can always freelance your service online. Websites like TaskRabbit, Thumbtack, Upwork, Freelancer, or Fiverr have provided an avenue for many people to work from home and sell their services. This will enable you to earn extra cash quickly to overcome your financial shortage.
4. Seek Financial Support From Family or Friends
Another quick fix for your cash flow shortages is borrowing extra dollars from your friends or family. However, repayment of this money on time is a must as it can lead to consequences that adversely affect your relationship with them. Unpaid loans can lead to lingering bad feelings between the lender and borrower. If you decide to borrow money from a loved one, it is wise to draw up a contract and clear the repayment time beforehand, to adhere to it.
5. Consider Other Borrowing Options
You can consider external financing options to cater to your financial needs during a cash flow crisis. These include online payday loans, bank overdrafts, credit cards, and selling your cryptocurrencies or stocks. External loaning will come with the set payback period and must be followed to avoid legal consequences.
If you are in a situation where you are cash-strapped and going through a financial crisis, chances are you are not alone. Unexpected expenses can arise anytime, and cash management is a learned skill. It is okay to find yourself in such situations. However, you can recover from a cash flow crisis by selling unused assets, borrowing from family members, and taking out online payday loans to get additional cash immediately and overcome cash flow problems.
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