There’s no question that financial difficulties can inflict a lot of stress and anxiety in our lives. Endlessly worrying 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 issues. If you’ve found yourself in a situation where you’re straining to make ends meet, here are the best ways to resolve your financial problems so you can live a worry-free life again.
Document your monthly expenditures
The first step in taking care of your financial problems is identify exactly where your pain points are. Whether or not 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, discovering the main causes of your financial woes will reveal to you which expenses must be prioritised so you can get your finances back on track. Grab a pen and paper and write down your current monthly expenditures including food, bills, debt repayments, transport, tuition, and any other items you typically spend each month.
Reduce your expenditures
Once you’ve got your monthly expenditures in front of you, take a closer look and find which expenses can be decreased and which can be eliminated altogether. While your mortgage repayments certainly can’t be decreased, 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 essential that you are pragmatic about cutting down your expenses. Keep in mind, if you’re trying to address financial issues then you need to 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 develop a budget. If you’re unfamiliar with constructing a budget, there are plenty of wonderful apps you can download on your smartphone. Personally, I’ve found the Budget Planning app from ASIC to be very useful: https://www.moneysmart.gov.au/tools-and-resources/calculators-and-apps/budget-planner.
This will enable you to find out how much money you have left each month by looking at your income and expenses. It’s vital 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 perhaps a motivation item to reward yourself at the end of the month for sticking to your budget.
Prioritise your debts
Some debts cause more distress 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 far better about yourself. Only paying the minimum repayments on your credit card bill can sometimes take years to pay off, so aim to reduce these kinds of debts as quickly as possible. Always remember, you still have other fixed debts every month such as phone bills and electricity, so these should be taken into account as well.
Still feeling the heat?
If you’ve reduced your expenses and made 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 high priced household items that you can do without? Reaching out to family and friends is another helpful 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 intensify an already stressful situation.
Seek financial advice
If the above steps haven’t relieved your financial strain, it’s better to seek financial guidance sooner instead of later. Depending on your individual circumstances, there are a number of alternatives 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, speak to Bankruptcy Experts Port Stephens on 1300 795 575 or visit our website for further information: www.bankruptcyexpertsportstephens.com.au