Tips on How to Manage Your Financial Troubles
There’s no doubt that financial troubles can trigger a lot of stress and anxiety in our lives. Continually worrying about how you’re going to pay your bills not only makes you distressed, but also places 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 position 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.
Document your monthly expenditures
The first step in managing your financial difficulties is discover exactly where your pain points are. Whether you’re dealing with a large credit card debt, you’re attempting to boost your retirement savings, or you simply spend too much on eating in restaurants during the week, identifying the main causes of your financial woes will reveal to you which expenditures need to be prioritised so you can get your finances back on track. Get a pen and paper and write down your current monthly expenditures including debt repayments, bills, food, transport, tuition, and any other items you normally spend every month.
Cut down on your expenses
Once 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 severed altogether. Even though your mortgage repayments certainly can’t be reduced, you can probably decrease your food bill by only eating at home and even eliminate other entertainment expenses such as cable TV. It’s essential that you are pragmatic about lowering your expenses. Don’t forget, if you’re trying to overcome financial complications then you have to make sacrifices to resolve them.
Create a budget
Now that you’ve got your monthly expenditures documented without the unnecessary spending, you have to construct a budget. If you’re unfamiliar with making a budget, there are lots of terrific apps you can download on your smartphone. 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 figure out how much money you have left each month by looking at your income and expenses. It’s necessary that you stick your budget. If you sense that it could be challenging to do this, add a miscellaneous item to your budget to give you some room to breathe, or perhaps a motivation item to reward yourself at the end of the month for following your budget.
Prioritise your debts
Some debts cause more distress 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 aim to diminish these types of debts as quickly as possible. Always remember, you still have other fixed debts every month such as phone bills and electricity, so these have to be taken into account as well.
Still feeling the heat?
If you’ve cut down your expenditures and created a budget but still find that there’s not enough money to settle all your debts, you’ll need to find other income sources. 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 reliable way to attempt to deal with your concerns. 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 assistance
If the above steps haven’t relieved your financial pressure, it’s better to seek financial guidance sooner rather than later. Depending on your individual circumstances, there are a number 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 getting help, talk with Bankruptcy Experts Sydney on 1300 795 575 or visit our website for additional information: www.bankruptcyexpertssydney.com.au