Tips on How to Resolve Your Financial Difficulties
There’s no question that financial concerns can lead to a lot of stress in our lives. Incessantly thinking about how you’re going to pay your bills not only makes you anxious, 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 situation where you’re struggling to make ends meet, here are the best ways to deal with your financial troubles so you can live a worry-free life again.
Document your monthly expenditures
The first step in resolving your financial issues is uncover exactly where your pain points are. Regardless if you’re dealing with a large credit card balance, you’re trying to boost your retirement savings, or you merely spend too much on eating in restaurants during the week, identifying the main causes of your financial concerns will reveal to you which expenses need to be prioritised so you can get your finances back on course. Get a pen and paper and document your current monthly expenditures including debt repayments, bills, food, transport, tuition, and any other items you commonly spend every month.
Decrease your expenditures
When 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 cut out altogether. Even though your mortgage repayments obviously can’t be reduced, you can likely lower your food bill by only eating at home and even remove other entertainment expenses such as cable television. It’s critical that you are pragmatic about reducing your expenses. Bear in mind, if you’re trying to overcome financial issues 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 set up a budget. If you’re unfamiliar with making a budget, there are a number of wonderful apps you can download on your smartphone. 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 calculate how much money you have left each month by reviewing your income and expenses. It’s paramount that you stick your budget. If you feel that it could be too 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 sticking to your budget.
Prioritise your debts
Some debts cause more strain than others, so to relieve 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 attempt to lower these types of debts as soon as possible. Always remember, you still have other fixed debts each month including phone bills and electricity, so these have to be factored in too.
Still feeling the heat?
If you’ve cut down your expenses and made a budget but still find that there’s not enough money to pay off all your debts, you’ll need to find other sources of income. 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 helpful way to attempt to address your troubles. Whatever you do to get additional money, never get a personal loan from the bank to settle your existing debt – this will only exacerbate an already stressful situation.
Seek financial guidance
If the above steps haven’t relieved your financial pressure, it’s better to seek financial advice sooner rather than later. Depending on your individual circumstances, there are plenty of solutions available like debt consolidation loans or debt agreements which can help those in need. Don’t wrestle with your debts for years before getting help, call Bankruptcy Experts Wollongong on 1300 795 575 or visit our website for more information: www.bankruptcyexpertswollongong.com.au