There’s no doubt that financial troubles can inflict a lot of anxiety in our lives. Always thinking 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 health. The fact is, stressing over money isn’t going to cure your financial problems. If you’ve found yourself in a situation 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.
List your monthly expenses
The first step in overcoming your financial problems is figure out exactly where your pain points are. Regardless if you’re dealing with a large credit card debt, you’re trying to boost 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 must be prioritised so you can get your finances back on course. Get a pen and paper and document your current monthly expenses including debt repayments, food, bills, tuition, transport, and any other items you usually spend each month.
Decrease your expenditures
When you’ve got your monthly expenses in front of you, take a closer look and see which expenses can be reduced and which can be cut out altogether. Even though your mortgage repayments clearly can’t be lowered, you can possibly reduce your food bill by only eating at home and even get rid of other entertainment expenses like cable TV. It’s pivotal that you are pragmatic about reducing your expenses. Don’t forget, if you’re trying to address financial issues then you have to make sacrifices to resolve them.
Create a budget
Now that you’ve got your monthly costs jotted down without the unnecessary spending, you must develop a budget. If you’re unfamiliar with developing a budget, there are plenty of wonderful apps you can download on your mobile phone. Personally, I’ve found the Budget Planning app from ASIC to be very useful: https://www.moneysmart.gov.au/tools-and-resources/calculators-and-apps/budget-planner.
This will enable you to determine how much money you have left each month by examining your income and expenses. It’s essential that you stick your budget. If you feel that it could be too 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 distress than others, so to ease your financial stress as best as possible, aim 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. Keep in mind, you still have other fixed debts each month such as phone bills and electricity, so these need to be accounted for as well.
Still feeling the heat?
If you’ve lowered 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 income sources. Are you able to work a second job? Can you sell any expensive household items that you can do without? Reaching out to family or friends is another reliable way to attempt to deal with your issues. Whatever you do to get additional 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 advice
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 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 seeking help, get in touch with Bankruptcy Experts Dubbo on 1300 795 575 or visit our website for further information: www.bankruptcyexpertsdubbo.com.au