Efectivo is effective. As in, goes into effect, or it has power.

Efectivo is also used to mean cash. This is a usage that I have heard a lot, but have not really understood. While trying to figure out its meaning, I ran across an example of how to use the word that makes sense.

At Word Reference it uses the example “hacer efectivo un cheque.” It means “to cash a check.” Or, you could translate it, to make the check effective, or to make the check have power. A check becomes usable when it is effective or made into cash.