There’s no doubt that financial problems can create a lot of anxiety in our lives. Incessantly thinking about how you’re going to pay your bills not only makes you distressed, but also places stress on your relationships, your family, and your health. The fact is, stressing over money isn’t going to cure your financial complications. If you’ve found yourself in a position where you’re struggling to make ends meet, here are the best ways to resolve your financial difficulties so you can live a worry-free life again.
Document your monthly costs
The first step in resolving your financial concerns is discover exactly where your pain points are. Whether or not you’re dealing with a large credit card debt, you’re trying to increase your retirement savings, or you simply spend too much on eating out during the week, discovering the main causes of your financial issues will show you which expenses have to be prioritised so you can get your finances back on track. Get a pen and paper and write down your current monthly expenses including bills, debt repayments, food, tuition, transport, and any other items you frequently spend each month.
Cut back on your expenditures
Once you’ve got your monthly expenses in front of you, take a closer look and see which expenses can be reduced and which can be severed altogether. Even though your mortgage repayments naturally can’t be lowered, you can probably reduce your food bill by only eating at home and even remove other entertainment expenses such as cable television. It’s pivotal that you are pragmatic about lowering your expenses. Always remember, if you’re trying to address financial problems then you must make sacrifices to resolve them.
Develop a budget
Now that you’ve got your monthly expenditures written down without the unnecessary spending, you have to develop a budget. If you’re unfamiliar with constructing a budget, there are loads of fantastic apps you can download on your smartphone. Personally, I’ve found the Budget Planning app from ASIC to be very valuable: https://www.moneysmart.gov.au/tools-and-resources/calculators-and-apps/budget-planner.
This will enable you to figure out how much money you have left each month by viewing your income and expenses. It’s necessary that you stick your budget. If you sense that it could be too challenging to do this, add a miscellaneous item to your budget to give you some room to breathe, or perhaps a motivation item to reward yourself at the end of the month for following your budget.
Prioritise your debts
Some debts cause more suffering than others, so to relieve your financial burden as best as possible, try to reduce your largest debts first. Not only will you be saving money by paying less interest, you’ll also feel much better about yourself. Only paying the minimum repayments on your credit card bill can sometimes take years to pay off, so aim to decrease these types of debts as soon as possible. Don’t forget, you still have other fixed debts each month like phone bills and electricity, so these need to be factored in too.
Still feeling the heat?
If you’ve cut back on your expenditures and constructed a budget but still find that there’s not enough money to settle all your debts, you’ll have to find other income streams. Are you able to work a second job? Can you sell any expensive household items that you can do without? Reaching out to family or friends is another helpful way to attempt to address your difficulties. Whatever you do to get additional money, never get a personal loan from the bank to pay off your existing debt – this will only worsen an already stressful situation.
Seek financial advice
If the above steps haven’t relieved your financial stress, it’s better to seek financial advice sooner rather than later. Depending on your individual situation, there are numerous alternatives available including debt consolidation loans or debt agreements which can assist those in need. Don’t fight your debts for years before seeking help, talk with Bankruptcy Experts Northern Rivers on 1300 795 575 or visit our website for further information: www.bankruptcyexpertsnorthernrivers.com.au