There’s no question that financial problems can bring about a lot of stress and anxiety in our lives. Incessantly worrying about how you’re going to pay your bills not only makes you apprehensive, but also places stress on your relationships, your family, and your well-being. The fact is, worrying about money isn’t going to solve your financial complications. If you’ve found yourself in a position where you’re battling to make ends meet, here are the best ways to address your financial problems so you can live a stress-free life again.
Document your monthly costs
The first step in tackling your financial difficulties is determine exactly where your pain points are. Whether or not you’re dealing with a large credit card balance, you’re attempting to boost your retirement savings, or you merely spend too much on eating in restaurants throughout the week, identifying the main causes of your financial woes will reveal to you which expenditures should be prioritised so you can get your finances back on track. Grab a pen and paper and document your current monthly expenditures including food, bills, debt repayments, transport, tuition, and any other items you typically spend each month.
Reduce your expenses
When you’ve got your monthly expenses in front of you, take a closer look and see which expenses can be lowered and which can be severed altogether. Even though your mortgage repayments clearly can’t be decreased, you can probably lower your food bill by only eating at home and even get rid of other entertainment expenses like cable television. It’s vital that you are pragmatic about cutting down your expenses. Keep in mind, if you’re dealing with financial challenges then you need to make sacrifices to resolve them.
Put together a budget
Now that you’ve got your monthly expenditures documented without the unnecessary spending, you need to construct a budget. If you’re not familiar with creating a budget, there are loads of terrific apps you can download on your mobile phone. Personally, I’ve found the Budget Planning app from ASIC to be very practical: https://www.moneysmart.gov.au/tools-and-resources/calculators-and-apps/budget-planner.
This will enable you to establish how much money you have left each month by looking at 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 even a motivation item to reward yourself at the end of the month for sticking to your budget.
Prioritise your debts
Some debts cause more suffering than others, so to lighten your financial stress as best as possible, aim to decrease 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 attempt to reduce these types of debts as quickly as possible. Remember, you still have other fixed debts each month such as phone bills and electricity, so these need to be taken into account as well.
Still feeling the heat?
If you’ve cut back on your expenses and created a budget but still find that there’s not enough money to settle all your debts, you’ll need to find other income sources. Are you able to work a second job? Can you sell any costly household items that you can do without? Reaching out to family and friends is another effective way to attempt to resolve 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 magnify an already stressful situation.
Seek financial advice
If the above steps haven’t relieved your financial strain, it’s better to seek financial assistance sooner rather than later. Depending on your individual situation, there are numerous choices available such as debt consolidation loans or debt agreements which can help those in need. Don’t fight your debts for years before getting help, talk with Bankruptcy Experts Emerald on 1300 795 575 or visit our website for additional information: www.bankruptcyexpertsemerald.com.au