There’s no question that financial problems can bring about a lot of anxiety in our lives. Continually fretting 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, worrying about money isn’t going to fix your financial issues. If you’ve found yourself in a position where you’re battling to make ends meet, here are the best ways to deal with your financial concerns so you can live a worry-free life again.
Document your monthly expenses
The first step in tackling your financial problems is determine 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 merely spend too much on eating out throughout the week, recognising the main causes of your financial issues 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 costs including food, bills, debt repayments, transport, tuition, and any other items you generally spend every month.
Decrease your expenditures
After you’ve got your monthly expenditures in front of you, take a closer look and examine which expenses can be decreased and which can be removed altogether. While your mortgage repayments naturally can’t be decreased, you can most likely decrease your food bill by only eating at home and even get rid of other entertainment expenses like cable TV. It’s essential that you are pragmatic about decreasing your expenses. Remember, if you’re trying to address financial problems then you must make sacrifices to resolve them.
Put together a budget
Now that you’ve got your monthly expenses jotted down without the unnecessary spending, you have to set up a budget. If you’re not familiar with making a budget, there are loads of terrific 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 figure out how much money you have left each month by viewing your income and expenses. It’s essential that you stick your budget. If you think that it could be too difficult 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 strain than others, so to lighten your financial stress 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 much better about yourself. Only paying the minimum repayments on your credit card bill can sometimes take years to pay off, so attempt to reduce these types of debts as soon as possible. Don’t forget, you still have other fixed debts each month including phone bills and electricity, so these have to be factored in too.
Still feeling the heat?
If you’ve reduced your expenses and constructed a budget but still find that there’s not enough money to pay off all your debts, you’ll need 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 reliable way to attempt to address your troubles. Whatever you do to get extra money, never get a personal loan from the bank to pay off your existing debt – this will only intensify an already stressful situation.
Seek financial assistance
If the above steps haven’t relieved your financial strain, it’s better to seek financial advice sooner instead of later. Depending on your individual circumstances, there are lots of options available including debt consolidation loans or debt agreements which can assist those in need. Don’t wrestle with your debts for years before seeking assistance, call Bankruptcy Advice on 1300 879 867 or visit our website for additional information: www.bankruptcy-advice.com.au/