There’s no doubt that financial troubles can bring about a lot of anxiety in our lives. Repeatedly 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 well-being. The fact is, stressing over money isn’t going to solve your financial troubles. 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 challenges so you can live a stress-free life again.
List your monthly expenses
The first step in dealing with your financial issues is identify exactly where your pain points are. Whether or not you’re dealing with a large credit card debt, you’re trying to enhance your retirement savings, or you merely spend too much on dining in restaurants throughout the week, recognising the main causes of your financial troubles will reveal to you which expenditures need to be prioritised so you can get your finances back on course. Get a pen and paper and document your current monthly expenses including food, bills, debt repayments, transport, tuition, and any other items you typically spend each month.
Reduce your expenditures
After you’ve got your monthly expenses in front of you, take a closer look and see which expenses can be decreased and which can be eliminated altogether. Even though your mortgage repayments naturally can’t be decreased, you can likely lower your food bill by only eating at home and even get rid of other entertainment expenses like cable television. It’s integral that you are pragmatic about lowering your expenses. Always remember, if you’re trying to overcome financial complications then you need to make sacrifices to resolve them.
Develop a budget
Now that you’ve got your monthly expenditures written down without the unnecessary spending, you must construct a budget. If you’re unfamiliar with creating a budget, there are a number of wonderful apps you can download on your smartphone. Personally, I’ve found the Budget Planning app from ASIC to be very reliable: 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 every month by viewing your income and expenses. It’s critical 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 sticking to your budget.
Prioritise your debts
Some debts cause more suffering than others, so to ease your financial stress 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 diminish these kinds of debts as soon as possible. Bear in mind, you still have other fixed debts every month like phone bills and electricity, so these need to be taken into account 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 pay off all your debts, you’ll have to find other income sources. 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 practical way to attempt to deal with your challenges. Whatever you do to get extra money, never get a personal loan from the bank to pay off your existing debt – this will only compound an already stressful situation.
Seek financial guidance
If the above steps haven’t relieved your financial pressure, it’s better to seek financial advice sooner rather than later. Depending on your individual circumstances, there are plenty of options available such as debt consolidation loans or debt agreements which can help those in need. Don’t wrestle with your debts for years before seeking guidance, speak with Bankruptcy Experts Toowoomba on 1300 795 575 or visit our website for further information: www.bankruptcyexpertstoowoomba.com.au