There’s no doubt that financial challenges can inflict a lot of anxiety in our lives. Endlessly worrying about how you’re going to pay your bills not only makes you distressed, but also puts stress on your relationships, your family, and your well-being. The fact is, stressing over money isn’t going to solve your financial issues. If you’ve found yourself in a situation where you’re struggling to make ends meet, here are the best ways to manage your financial troubles so you can live a stress-free life again.
Document your monthly expenditures
The first step in resolving your financial concerns is uncover exactly where your pain points are. Whether you’re dealing with a large credit card debt, you’re attempting to enhance your retirement savings, or you simply spend too much on eating out throughout the week, recognising the main causes of your financial concerns will reveal to you which expenses have to be prioritised so you can get your finances back on track. Get a pen and paper and document your current monthly costs including debt repayments, food, bills, tuition, transport, and any other items you typically spend every month.
Cut back on your expenditures
When you’ve got your monthly expenditures in front of you, take a closer look and see which expenses can be minimised and which can be cut out altogether. Although your mortgage repayments obviously 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 imperative that you are pragmatic about decreasing your expenses. Keep 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 expenses written down without the unnecessary spending, you have to construct a budget. If you’re unfamiliar with developing a budget, there are loads of fantastic apps you can download on your mobile phone. 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 examining your income and expenses. It’s necessary that you stick your budget. If you feel that it could be too difficult 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 alleviate 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 far 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 quickly as possible. Remember, you still have other fixed debts each month such as phone bills and electricity, so these have to be factored in too.
Still feeling the heat?
If you’ve cut down your expenditures and developed a budget but still find that there’s not enough money to settle all your debts, you’ll have to find other sources of income. 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 or friends is another practical way to try to address your challenges. Whatever you do to get additional money, never get a personal loan from the bank to repay your existing debt – this will only compound an already stressful situation.
Seek financial guidance
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 situation, there are plenty of choices available like debt consolidation loans or debt agreements which can help those in need. Don’t fight your debts for years before seeking guidance, speak with Bankruptcy Experts Shellharbour on 1300 795 575 or visit our website for more information: www.bankruptcyexpertsshellharbour.com.au