There’s no doubt that financial issues can cause a lot of anxiety in our lives. Endlessly thinking about how you’re going to pay your bills not only makes you apprehensive, but also places stress on your relationships, your family, and your health. The fact is, stressing over money isn’t going to cure your financial troubles. If you’ve found yourself in a position where you’re straining to make ends meet, here are the best ways to address your financial complications so you can live a stress-free life again.
Document your monthly expenditures
The first step in overcoming your financial problems is find out exactly where your pain points are. Whether you’re dealing with a large credit card balance, you’re attempting to boost your retirement savings, or you simply spend too much on eating in restaurants throughout the week, identifying the main causes of your financial concerns will reveal to you which expenditures should be prioritised so you can get your finances back on track. Grab a pen and paper and write down your current monthly expenditures including bills, debt repayments, food, tuition, transport, and any other items you regularly spend each month.
Cut back on your expenditures
When you’ve got your monthly expenditures in front of you, take a closer look and examine which expenses can be reduced and which can be removed altogether. Although your mortgage repayments certainly can’t be decreased, you can probably decrease your food bill by only eating at home and even remove other entertainment expenses like cable television. It’s vital that you are pragmatic about minimising your expenses. Bear in mind, if you’re trying to address financial difficulties then you need 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 create a budget. If you’re not familiar with making a budget, there are plenty of terrific 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 identify how much money you have left each month by reviewing your income and expenses. It’s imperative that you stick your budget. If you sense that it could be difficult to do this, add a miscellaneous item to your budget to give you some room to breathe, or maybe a motivation item to reward yourself at the end of the month for following your budget.
Prioritise your debts
Some debts cause more strain than others, so to alleviate your financial strain as best as possible, try 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 soon as possible. Bear in mind, you still have other fixed debts every month such as phone bills and electricity, so these have to be accounted for as well.
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 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 and friends is another practical way to try to address your issues. Whatever you do to get additional money, never get a personal loan from the bank to settle 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 help those in need. Don’t fight your debts for years before seeking assistance, call Bankruptcy Experts Fremantle on 1300 795 575 or visit our website for additional information: www.bankruptcyexpertsfremantle.com.au