There’s no doubt that financial issues can bring about a lot of anxiety in our lives. Always fretting about how you’re going to pay your bills not only makes you anxious, but also places stress on your relationships, your family, and your health. The fact is, worrying about money isn’t going to solve your financial troubles. If you’ve found yourself in a position where you’re battling 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 expenses
The first step in overcoming your financial challenges is determine exactly where your pain points are. Regardless if you’re dealing with a large credit card debt, you’re trying to enhance your retirement savings, or you just spend too much on eating out during the week, identifying the main causes of your financial issues will show you which expenditures should 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, food, bills, tuition, transport, and any other items you regularly spend every month.
Cut back on your expenditures
Once you’ve got your monthly expenses in front of you, take a closer look and examine which expenses can be lowered and which can be removed altogether. Although your mortgage repayments obviously can’t be decreased, you can likely lower your food bill by only eating at home and even eliminate other entertainment expenses such as cable TV. It’s necessary that you are pragmatic about cutting down your expenses. Keep in mind, if you’re trying to address financial challenges then you need to make sacrifices to resolve them.
Construct a budget
Now that you’ve got your monthly expenses documented without the unnecessary spending, you must develop a budget. If you’re unfamiliar with creating 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 reliable: 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 every month by looking at your income and expenses. It’s essential that you stick your budget. If you sense that it could be too hard 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 pain than others, so to ease your financial strain as best as possible, try to decrease 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 attempt to diminish these kinds of debts as quickly as possible. Don’t forget, you still have other fixed debts each month like phone bills and electricity, so these should be accounted for as well.
Still feeling the heat?
If you’ve cut back on your expenses and made a budget but still find that there’s not enough money to repay all your debts, you’ll need to find other sources of income. 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 or friends is another useful way to attempt to deal with your challenges. Whatever you do to get additional money, never get a personal loan from the bank to pay off your existing debt – this will only worsen an already stressful situation.
Seek financial assistance
If the above steps haven’t relieved your financial pressure, it’s better to seek financial assistance sooner rather than later. Depending on your individual situation, there are a number of options available such as debt consolidation loans or debt agreements which can help those in need. Don’t fight your debts for years before getting assistance, speak to Bankruptcy Experts Hobart on 1300 795 575 or visit our website for more information: www.bankruptcyexpertshobart.com.au