Tips on How to Resolve Your Financial Troubles
There’s no doubt that financial difficulties can lead to a lot of stress and anxiety in our lives. Repeatedly fretting about how you’re going to pay your bills not only makes you apprehensive, but also places stress on your relationships, your family, and your well-being. The fact is, stressing over money isn’t going to cure your financial challenges. If you’ve found yourself in a situation where you’re straining to make ends meet, here are the best ways to address your financial issues so you can live a worry-free life again.
List your monthly costs
The first step in managing your financial concerns is identify exactly where your pain points are. Whether you’re dealing with a large credit card debt, you’re attempting to increase your retirement savings, or you simply spend too much on eating in restaurants throughout the week, pinpointing the main causes of your financial issues will reveal to you which expenditures have to be prioritised so you can get your finances back on course. Grab a pen and paper and document your current monthly expenditures including food, bills, debt repayments, transport, tuition, and any other items you generally spend each month.
Cut down on your expenditures
Once you’ve got your monthly expenses in front of you, take a closer look and examine which expenses can be reduced and which can be severed altogether. Although your mortgage repayments naturally can’t be reduced, you can likely lower your food bill by only eating at home and even remove other entertainment expenses like cable TV. It’s pivotal that you are pragmatic about decreasing your expenses. Don’t forget, if you’re trying to address financial complications then you must make sacrifices to resolve them.
Put together a budget
Now that you’ve got your monthly expenditures written down without the unnecessary spending, you need to construct a budget. If you’re unfamiliar with developing a budget, there are a number of fantastic apps you can download on your mobile phone. Personally, I’ve found the Budget Planning app from ASIC to be very valuable: 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 every month by viewing your income and expenses. It’s paramount 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 following your budget.
Prioritise your debts
Some debts cause more pain than others, so to ease your financial strain as best as possible, aim 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 aim to decrease these types of debts as quickly as possible. Don’t forget, you still have other fixed debts each month such as phone bills and electricity, so these need to be taken into account as well.
Still feeling the heat?
If you’ve cut down your expenses and developed 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 costly household items that you can do without? Reaching out to family and friends is another practical way to try to address your problems. Whatever you do to get extra money, never get a personal loan from the bank to pay off your existing debt – this will only exacerbate an already stressful situation.
Seek financial advice
If the above steps haven’t relieved your financial pressure, it’s better to seek financial advice sooner instead of later. Depending on your individual situation, there are numerous choices available like debt consolidation loans or debt agreements which can assist those in need. Don’t fight your debts for years before seeking assistance, speak to Bankruptcy Experts Bunbury on 1300 795 575 or visit our website for more information: www.bankruptcyexpertsbunbury.com.au