There’s no question that financial difficulties can trigger a lot of stress and anxiety in our lives. Constantly thinking about how you’re going to pay your bills not only makes you apprehensive, but also puts stress on your relationships, your family, and your health. The fact is, worrying about money isn’t going to fix your financial challenges. If you’ve found yourself in a position where you’re straining to make ends meet, here are the best ways to manage your financial troubles so you can live a worry-free life again.
Write down your monthly expenditures
The first step in managing your financial challenges is figure out exactly where your pain points are. Regardless if you’re dealing with a large credit card balance, you’re trying to enhance your retirement savings, or you merely spend too much on eating out throughout the week, identifying the main causes of your financial issues will reveal to you which expenditures need to be prioritised so you can get your finances back on track. Grab a pen and paper and document your current monthly expenditures including debt repayments, food, bills, tuition, transport, and any other items you commonly spend every month.
Reduce your expenditures
After you’ve got your monthly expenses in front of you, take a closer look and find which expenses can be decreased and which can be severed altogether. Although your mortgage repayments clearly can’t be decreased, you can most likely lower your food bill by only eating at home and even do away with other entertainment expenses like cable television. It’s essential that you are pragmatic about lowering your expenses. Remember, if you’re trying to address financial challenges then you must make sacrifices to resolve them.
Put together a budget
Now that you’ve got your monthly expenditures written down without the unnecessary spending, you must create a budget. If you’re unfamiliar 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 determine how much money you have left every month by viewing your income and expenses. It’s crucial that you stick your budget. If you think that it could be too 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 pain than others, so to alleviate your financial strain 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 much better about yourself. Only paying the minimum repayments on your credit card bill can sometimes take years to pay off, so attempt to decrease these kinds of debts as quickly as possible. Remember, you still have other fixed debts every 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 repay all your debts, you’ll need to find other income streams. 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 practical way to try to address your problems. Whatever you do to get additional money, never get a personal loan from the bank to repay 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 advice sooner instead of later. Depending on your individual circumstances, there are lots of options available including debt consolidation loans or debt agreements which can help those in need. Don’t fight your debts for years before seeking help, speak to Bankruptcy Experts Gladstone on 1300 795 575 or visit our website for more information: www.bankruptcyexpertsgladstone.com.au