Money Advice Guide

Cash is kingso they say. If you work for yourself or someone else, you need to be aware of ways to improve the cash flow. Budgeting and collecting are not glamorous but they are both key to having a successful business. Working in a successful business is much more fun than working for a struggling one!

1. Stick to your budget. (If you don’t have one, make one now.) The budget is part of a business plan. You want to know exactly how much to spend on each large item you purchase and when you will have the cash to do it. Your cash flow projection coupled with your forecast will give you the proper timing for making purchases. The items you have budgeted for should also be part of the business plan.

2. Bill your clients regularly. Many business owners are so busy selling to new clients that they forget to invoice the clients they have already worked with. Put the task of billing your clients on your calendar and then stick to that schedule.

3. Get a retainer for your services before you begin the work. If you are going to be working with a client over a period of time, you will want to request some money up front before you begin to deliver the service.

4. Give a discount for early payment. You will be able to collect the money more quickly if you offer a discount for prompt payment.

5. Accept a credit card for payment. Although you have to pay the credit card company for this service, having the convenience of a credit card allows the client to pay immediately. Collection is now the problem of the credit card company.

6. Use your own credit card to finance purchases but do it cautiously. If the interest rate is low and you can pay the credit card company back relatively quickly, credit cards are often a good way to even out your cash flow.

7. Establish a line of credit with a bank. This is relatively easy to do so long as you have good credit and it gives you a cushion of cash when things are tight. Sometimes the bank will offer a really good rate to encourage you to become their customer for other banking services.

8. Put the cash that you have on hand in an interest bearing account. No reason to have cash sitting in an account that doesn’t accrue much interest. As cash grows consider money market accounts, CDs and savings accounts.

9. Pay your outstanding bills judiciously. Notice which vendors are willing to wait for payment and which will charge you interest if you are late. Schedule payment to maximize the cash in your account.

10. Consider getting an expert to watch your cash flow. Have someone (financial advisor, accountant, bookkeeper) available to run financial reports each month so you know exactly where you stand in your business.

Alvah Parker is a Business and Career Coach as well as publisher of Parker’s Points, an email tip list and Road to Success, an ezine. Parker’s Value Program© enables her clients to find their own way to work that is more fulfilling and profitable. Her clients are managers, business owners, sole practioners, attorneys and people in transition. Alvah is found on the web at http://www.asparker.com. She may also be reached at 781-598-0388.

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No matter what age you are or even your level of employment or economic position, it may be a good idea to start preparing now, even in a meager way, for eventual financial security. Some people feel they need every dollar they make to get by from one paycheck to the next. While this may be true for some, there are others who squander significant sums on insignificant things. They could be socking that money away into an investment account that, over time, could lead to huge savings and a comfortable retirement.

It isn’t hard to get started. All you need is $100 to $500 to open an account, and anywhere from $25 to $50 monthly to continue building your stock or mutual fund portfolio. In fact, a young person aged 20 could deposit $2,000 and then not another dime. In forty years he or she might have tens of thousands of dollars. The stock market has followed fairly predictable patterns since its inception in the 1800s in New York City. Although historic events like the Great Depression and several global wars have impacted its activity, the gains and losses remain fairly consistent, with most investors earning a predictable return on their investment.

Of course, no one can predict what the future holds, or whether the pattern will continue. And none of us should invest more money than we can afford to losejust in case the world economy crashes one of these days. But with steady deposits that continue to compound and earn interest over time, a sensible and prudent investor can substantially increase the amount of money going for retirement or a dream vacation at some future point.

If you are thinking about opening an investment account, do a little online browsing for more information. Visit sites like E-trade or Scott’s Trades to see how the process works. Start reading your newspaper’s financial pages for details about the latest stock prices and market trends. Do a little paper trading by following the daily stock news. Instead of actually purchasing stock, however, work it out on a piece of paper by pretending to buy a certain amount of stock for the specified price and then watching to see how it performs over the following week. Chart your gains or losses to figure out whether your stock deal was successful. If you do this for several months, you will soon learn to understand more about the stock market and how to buy and sell like the pros.

Even if your budget is tight, try to set aside a little money to open an investment account from any windfalls that come your way from job bonuses, inheritances, or cash gifts. Some people set aside their annual job raise, or part of it, as part of their investment strategy. Then, as your budget becomes looser with paid-off bills or grown-up kids, you may be able to start having a standard monthly amount deducted automatically from your paycheck and deposited into your investment account. This could take the form of a Roth IRA (individual retirement account), a money market fund, a mutual fund portfolio, or individual stock shares.

It probably is a good idea to take an investment class at the community college or sign up for a financial planning seminar. Success may be just a few years away if you start now and plan right.

You can find more great investment information at http://www.investment-central.com

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