There’s no question that financial difficulties can create a lot of stress and anxiety in our lives. Continuously 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, worrying about money isn’t going to solve your financial troubles. If you’ve found yourself in a situation where you’re struggling to make ends meet, here are the best ways to address your financial difficulties so you can live a worry-free life again.
List your monthly expenses
The first step in dealing with your financial concerns is determine exactly where your pain points are. Whether or not you’re dealing with a large credit card balance, you’re attempting to increase your retirement savings, or you just spend too much on eating out throughout the week, recognising the main causes of your financial concerns will show you which expenses must be prioritised so you can get your finances back on track. Grab a pen and paper and document your current monthly expenses including food, bills, debt repayments, transport, tuition, and any other items you commonly spend every month.
Decrease your expenses
After you’ve got your monthly expenses in front of you, take a closer look and find which expenses can be lowered and which can be cut out altogether. Although your mortgage repayments naturally can’t be reduced, you can likely decrease your food bill by only eating at home and even eliminate other entertainment expenses such as cable TV. It’s vital that you are pragmatic about cutting down your expenses. Bear in mind, if you’re trying to address financial troubles then you must make sacrifices to resolve them.
Construct a budget
Now that you’ve got your monthly expenses documented without the unnecessary spending, you must develop a budget. If you’re unfamiliar with making a budget, there are lots 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 determine how much money you have left each month by viewing your income and expenses. It’s crucial that you stick your budget. If you think that it could be challenging to do this, add a miscellaneous item to your budget to give you some room to breathe, or maybe a motivation item to reward yourself at the end of the month for following your budget.
Prioritise your debts
Some debts cause more distress than others, so to lighten your financial stress as best as possible, aim to reduce your biggest debts first. Not only will you be saving money by paying less interest, you’ll also feel far better about yourself. Only paying the minimum repayments on your credit card bill can sometimes take years to pay off, so aim to diminish these kinds of debts as quickly as possible. Keep in mind, you still have other fixed debts each month like phone bills and electricity, so these have to be accounted for as well.
Still feeling the heat?
If you’ve cut back on your expenditures and created a budget but still find that there’s not enough money to pay off all your debts, you’ll have to find other income sources. Are you able to work a second job? Can you sell any high priced household items that you can do without? Reaching out to family and friends is another effective way to attempt to deal with your concerns. Whatever you do to get additional money, never get a personal loan from the bank to pay off your existing debt – this will only compound an already stressful situation.
Seek financial advice
If the above steps haven’t relieved your financial strain, it’s better to seek financial advice sooner instead of later. Depending on your individual circumstances, there are lots of alternatives available such as debt consolidation loans or debt agreements which can assist those in need. Don’t wrestle with your debts for years before getting guidance, phone Bankruptcy Experts Gosford on 1300 795 575 or visit our website for more information: www.bankruptcyexpertsgosford.com.au