There’s no doubt that financial difficulties can cause a lot of stress in our lives. Continuously worrying 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 health. The fact is, worrying about money isn’t going to fix your financial concerns. If you’ve found yourself in a situation where you’re struggling to make ends meet, here are the best ways to address your financial challenges so you can live a stress-free life again.
Document your monthly expenses
The first step in resolving your financial difficulties is discover exactly where your pain points are. Whether or not you’re dealing with a large credit card balance, you’re trying to enhance your retirement savings, or you simply spend too much on dining in restaurants during the week, identifying the main causes of your financial problems will show you which expenditures must be prioritised so you can get your finances back on course. Grab a pen and paper and document your current monthly expenses including debt repayments, food, bills, tuition, transport, and any other items you commonly spend every month.
Cut back 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 eliminated altogether. Although your mortgage repayments clearly can’t be reduced, you can most likely lower your food bill by only eating at home and even get rid of other entertainment expenses such as cable television. It’s necessary that you are pragmatic about decreasing your expenses. Always remember, if you’re trying to address financial complications then you have to make sacrifices to resolve them.
Develop a budget
Now that you’ve got your monthly expenditures jotted down without the unnecessary spending, you need to create a budget. If you’re unfamiliar with constructing a budget, there are loads of terrific apps you can download on your smartphone. 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 determine how much money you have left every month by reviewing your income and expenses. It’s paramount that you stick your budget. If you think that it could be too hard 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 sticking to your budget.
Prioritise your debts
Some debts cause more pain than others, so to alleviate your financial strain 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 try to decrease these types of debts as soon as possible. Bear in mind, you still have other fixed debts every month like phone bills and electricity, so these have to be accounted for as well.
Still feeling the heat?
If you’ve lowered your expenditures and developed a budget but still find that there’s not enough money to pay off 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 helpful way to try to deal with your problems. Whatever you do to get extra money, never get a personal loan from the bank to repay your existing debt – this will only magnify an already stressful situation.
Seek financial guidance
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 options available such as debt consolidation loans or debt agreements which can help those in need. Don’t wrestle with your debts for years before seeking assistance, talk to Bankruptcy Experts Mildura on 1300 795 575 or visit our website for additional information: www.bankruptcyexpertsmildura.com.au