There’s no doubt that financial challenges can cause a lot of stress and anxiety in our lives. Endlessly thinking 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 health. The fact is, worrying about money isn’t going to cure your financial concerns. 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 complications so you can live a worry-free life again.
Document your monthly expenditures
The first step in tackling your financial challenges is find out exactly where your pain points are. Whether or not you’re dealing with a large credit card debt, you’re trying to increase your retirement savings, or you merely spend too much on eating in restaurants during the week, recognising the main causes of your financial woes will reveal to you which expenses need to be prioritised so you can get your finances back on course. Grab a pen and paper and write down your current monthly expenditures including debt repayments, bills, food, transport, tuition, and any other items you frequently spend each month.
Decrease your expenditures
Once you’ve got your monthly expenditures in front of you, take a closer look and see which expenses can be lowered and which can be cut out altogether. Even though your mortgage repayments naturally can’t be lowered, you can most likely lower your food bill by only eating at home and even remove other entertainment expenses such as cable TV. It’s pivotal that you are pragmatic about reducing your expenses. Always remember, if you’re dealing with financial difficulties then you must make sacrifices to resolve them.
Set up a budget
Now that you’ve got your monthly costs written down without the unnecessary spending, you need to construct 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 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 every month by viewing 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 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 strain than others, so to ease your financial strain as best as possible, aim to reduce your largest 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 decrease these kinds of debts as quickly as possible. Remember, you still have other fixed debts every month like phone bills and electricity, so these have to be accounted for as well.
Still feeling the heat?
If you’ve reduced your expenditures and created a budget but still find that there’s not enough money to repay all your debts, you’ll have to find other income streams. Are you able to work a second job? Can you sell any expensive household items that you can do without? Reaching out to family or friends is another reliable way to try to address your concerns. Whatever you do to get extra money, never get a personal loan from the bank to pay off your existing debt – this will only exacerbate an already stressful situation.
Seek financial advice
If the above steps haven’t relieved your financial pressure, it’s better to seek financial advice sooner instead of later. Depending on your individual situation, there are a number of options available including debt consolidation loans or debt agreements which can assist those in need. Don’t fight your debts for years before getting assistance, call Bankruptcy Experts Lismore on 1300 795 575 or visit our website for additional information: www.bankruptcyexpertslismore.com.au