There’s no question that financial concerns can create a lot of stress and anxiety in our lives. Endlessly fretting about how you’re going to pay your bills not only makes you anxious, but also puts stress on your relationships, your family, and your well-being. The fact is, worrying about money isn’t going to solve your financial difficulties. 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 issues so you can live a worry-free life again.
List your monthly expenses
The first step in overcoming your financial challenges is ascertain exactly where your pain points are. Regardless if you’re dealing with a large credit card balance, you’re attempting to increase your retirement savings, or you simply spend too much on dining in restaurants during the week, recognising the main causes of your financial problems will show you which expenses need to be prioritised so you can get your finances back on course. Grab a pen and paper and jot down your current monthly costs including debt repayments, food, bills, tuition, transport, and any other items you regularly spend each month.
Cut back on your expenses
When 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 certainly can’t be lowered, you can likely reduce your food bill by only eating at home and even get rid of other entertainment expenses such as cable television. It’s imperative that you are pragmatic about lowering your expenses. Don’t forget, if you’re trying to address financial complications then you have to make sacrifices to resolve them.
Construct a budget
Now that you’ve got your monthly expenses jotted down without the unnecessary spending, you have to develop a budget. If you’re unfamiliar with making a budget, there are plenty of fantastic apps you can download on your mobile phone. Personally, I’ve found the Budget Planning app from ASIC to be very helpful: 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 examining your income and expenses. It’s necessary that you stick your budget. If you think that it could be 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 pain than others, so to relieve your financial strain 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 try to reduce these types of debts as soon as possible. Always remember, you still have other fixed debts every month including phone bills and electricity, so these need to be taken into account as well.
Still feeling the heat?
If you’ve cut down your expenses and developed 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 or friends is another helpful way to attempt to resolve your problems. Whatever you do to get additional 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 assistance sooner instead of later. Depending on your individual situation, there are lots of options available including debt consolidation loans or debt agreements which can help those in need. Don’t wrestle with your debts for years before seeking help, talk to Bankruptcy Experts Port Macquarie on 1300 795 575 or visit our website for further information: www.bankruptcyexpertsportmacquarie.com.au