There’s no doubt that financial difficulties can trigger a lot of anxiety in our lives. Repeatedly 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 health. The fact is, stressing over money isn’t going to cure your financial troubles. If you’ve found yourself in a position where you’re battling to make ends meet, here are the best ways to resolve your financial concerns so you can live a worry-free life again.
List your monthly costs
The first step in resolving your financial concerns is uncover exactly where your pain points are. Regardless if you’re dealing with a large credit card debt, you’re attempting to boost your retirement savings, or you just spend too much on eating in restaurants during the week, identifying the main causes of your financial concerns will show you which expenditures should be prioritised so you can get your finances back on course. Get a pen and paper and document your current monthly expenses including bills, debt repayments, food, tuition, transport, and any other items you frequently spend each month.
Reduce your expenditures
After you’ve got your monthly expenditures in front of you, take a closer look and see which expenses can be reduced and which can be eliminated altogether. While your mortgage repayments naturally can’t be decreased, you can possibly decrease your food bill by only eating at home and even do away with other entertainment expenses like cable TV. It’s imperative that you are pragmatic about reducing your expenses. Don’t forget, if you’re trying to address financial problems then you need to make sacrifices to resolve them.
Create a budget
Now that you’ve got your monthly expenses documented without the unnecessary spending, you must construct a budget. If you’re not familiar with developing a budget, there are plenty of wonderful apps you can download on your mobile phone. Personally, I’ve found the Budget Planning app from ASIC to be very useful: 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 every month by viewing your income and expenses. It’s critical that you stick your budget. If you sense that it could be difficult 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 suffering than others, so to lighten your financial burden as best as possible, aim to decrease your biggest 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 diminish these types of debts as soon as possible. Bear in mind, you still have other fixed debts each month including phone bills and electricity, so these should be accounted for as well.
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 repay 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 try to resolve your difficulties. Whatever you do to get extra 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 strain, it’s better to seek financial guidance sooner instead of later. Depending on your individual situation, there are a number of options available such as debt consolidation loans or debt agreements which can assist those in need. Don’t fight your debts for years before seeking assistance, get in touch with Bankruptcy Experts Shepparton on 1300 795 575 or visit our website for more information: www.bankruptcyexpertsshepparton.com.au