Cash flow is is simply the amount of money you have coming into your household on a regular basis. Ideally, cash flow in exceeds cash flow out, and you’ve got extra cash flow.
Once you’ve met your investing goals, paid yourself first (or last), and met your debt obligations, what should you do with additional funds?
Dr. James Turner has some ideas. Now that he and his wife have paid off many of their debts in short order, they share what they are doing with the newfound excess cash flow.
According to The 10% Rule, we enjoyed 10% of our increase in post-tax pay after training. The other 90% went straight towards our student loans after we refinanced them at a great rate. This allowed us to take a sledgehammer to our loans
Our three-month emergency fund has served its purpose while we aggressively paid down debt. We have only needed to dip into it once, which happened after we moved and had multiple unexpected expenses.
Giving more to charity may mean giving your time or services to those who need it. You could even move to part-time work now that you can afford it to allow you to be more available for these opportunities.