There’s no question that financial complications can bring about a lot of stress in our lives. Always worrying 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 solve your financial complications. If you’ve found yourself in a situation where you’re battling to make ends meet, here are the best ways to resolve your financial concerns so you can live a stress-free life again.
Document your monthly expenses
The first step in managing your financial challenges is identify exactly where your pain points are. Regardless if you’re dealing with a large credit card debt, you’re attempting to enhance your retirement savings, or you just spend too much on eating out during the week, discovering the main causes of your financial problems will show you which expenditures have to be prioritised so you can get your finances back on course. Get a pen and paper and jot down your current monthly expenses including debt repayments, bills, food, transport, tuition, and any other items you commonly spend each month.
Cut down on your expenditures
Once you’ve got your monthly expenses in front of you, take a closer look and see which expenses can be decreased and which can be cut out altogether. Even though your mortgage repayments naturally can’t be decreased, you can most likely decrease your food bill by only eating at home and even eliminate other entertainment expenses such as cable TV. It’s significant that you are pragmatic about minimising your expenses. Keep in mind, if you’re trying to address financial troubles then you need to make sacrifices to resolve them.
Develop a budget
Now that you’ve got your monthly costs jotted down without the unnecessary spending, you must construct a budget. If you’re not familiar with creating a budget, there are lots of terrific 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 find out how much money you have left each month by looking at your income and expenses. It’s imperative that you stick your budget. If you think that it could be 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 following your budget.
Prioritise your debts
Some debts cause more strain than others, so to relieve your financial stress 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 far better about yourself. Only paying the minimum repayments on your credit card bill can sometimes take years to pay off, so attempt to lower these kinds 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 cut down your expenses and made a budget but still find that there’s not enough money to settle all your debts, you’ll have 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 and friends is another practical way to attempt to address your concerns. Whatever you do to get extra money, never get a personal loan from the bank to settle your existing debt – this will only compound an already stressful situation.
Seek financial assistance
If the above steps haven’t relieved your financial stress, it’s better to seek financial advice sooner instead of later. Depending on your individual circumstances, there are lots of choices available including debt consolidation loans or debt agreements which can assist those in need. Don’t fight your debts for years before getting guidance, reach out to Bankruptcy Experts Rockingham on 1300 795 575 or visit our website for more information: www.bankruptcyexpertsrockingham.com.au