There’s no doubt that financial issues can inflict a lot of anxiety in our lives. Always 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, stressing over money isn’t going to fix your financial issues. If you’ve found yourself in a situation where you’re struggling to make ends meet, here are the best ways to manage your financial concerns so you can live a worry-free life again.
List your monthly costs
The first step in overcoming your financial difficulties is identify exactly where your pain points are. Whether you’re dealing with a large credit card balance, you’re attempting to increase your retirement savings, or you just spend too much on eating out during the week, recognising 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 write down your current monthly expenses including food, bills, debt repayments, transport, tuition, and any other items you commonly spend each month.
Lower your expenses
Once 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. Although your mortgage repayments certainly can’t be decreased, you can most likely reduce your food bill by only eating at home and even remove other entertainment expenses like cable television. It’s imperative that you are pragmatic about decreasing your expenses. Remember, if you’re trying to address financial problems then you need to make sacrifices to resolve them.
Develop a budget
Now that you’ve got your monthly expenses documented without the unnecessary spending, you must construct a budget. If you’re unfamiliar with developing a budget, there are a number of terrific 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 find out how much money you have left every month by viewing your income and expenses. It’s necessary that you stick your budget. If you sense that it could be too difficult to do this, add a miscellaneous item to your budget to give you some room to breathe, or even 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 alleviate your financial burden as best as possible, try to reduce your largest 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 diminish these types of debts as soon as possible. Bear in mind, you still have other fixed debts every month including phone bills and electricity, so these should be accounted for as well.
Still feeling the heat?
If you’ve lowered your expenses and constructed a budget but still find that there’s not enough money to settle all your debts, you’ll have to find other income streams. 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 effective way to attempt to deal with your issues. Whatever you do to get extra money, never get a personal loan from the bank to settle your existing debt – this will only magnify an already stressful situation.
Seek financial advice
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 circumstances, there are lots of solutions available like debt consolidation loans or debt agreements which can assist those in need. Don’t wrestle with your debts for years before getting help, talk to Bankruptcy Experts Parramatta on 1300 795 575 or visit our website for more information: www.bankruptcyexpertsparramatta.com.au