There’s no question that financial concerns can trigger a lot of stress in our lives. Endlessly worrying about how you’re going to pay your bills not only makes you anxious, but also puts stress on your relationships, your family, and your health. The fact is, stressing over money isn’t going to solve 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 deal with your financial troubles so you can live a stress-free life again.
Write down your monthly expenditures
The first step in resolving your financial complications is ascertain exactly where your pain points are. Regardless if you’re dealing with a large credit card balance, you’re attempting to enhance your retirement savings, or you simply spend too much on eating out during the week, recognising the main causes of your financial troubles will reveal to you which expenditures have to be prioritised so you can get your finances back on track. Grab a pen and paper and jot down your current monthly expenses including debt repayments, bills, food, transport, tuition, and any other items you usually spend each month.
Lower your expenses
Once you’ve got your monthly expenses in front of you, take a closer look and see which expenses can be lowered and which can be eliminated altogether. While your mortgage repayments naturally can’t be reduced, you can probably lower your food bill by only eating at home and even do away with other entertainment expenses like cable TV. It’s critical that you are pragmatic about minimising your expenses. Bear in mind, if you’re trying to overcome financial challenges then you must make sacrifices to resolve them.
Put together a budget
Now that you’ve got your monthly expenses written down without the unnecessary spending, you have to develop a budget. If you’re not familiar with creating a budget, there are loads of fantastic apps you can download on your smartphone. 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 calculate how much money you have left each month by examining your income and expenses. It’s necessary 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 maybe 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 alleviate your financial pressure as best as possible, try to decrease 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 aim to lower these kinds of debts as quickly as possible. Always remember, you still have other fixed debts every month like phone bills and electricity, so these should be taken into account as well.
Still feeling the heat?
If you’ve cut back on your expenses and constructed 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 or friends is another helpful way to attempt to address your problems. Whatever you do to get additional money, never get a personal loan from the bank to settle 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 guidance sooner instead of later. Depending on your individual situation, there are a number of options available like debt consolidation loans or debt agreements which can assist those in need. Don’t wrestle with your debts for years before seeking guidance, speak to Bankruptcy Advice Perth on 1300 879 867 or visit our website for additional information: www.bankruptcy-advice.com.au/perth