There’s no doubt that financial concerns can cause a lot of anxiety in our lives. Constantly fretting about how you’re going to pay your bills not only makes you anxious, but also puts stress on your relationships, your family, and your health. The fact is, stressing over money isn’t going to cure your financial concerns. If you’ve found yourself in a position where you’re straining 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 costs
The first step in managing your financial troubles is ascertain exactly where your pain points are. Whether or not you’re dealing with a large credit card balance, you’re attempting to boost your retirement savings, or you just spend too much on dining in restaurants throughout the week, recognising the main causes of your financial issues will show you which expenses 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 bills, debt repayments, food, tuition, transport, and any other items you typically spend each month.
Cut down on your expenses
After you’ve got your monthly expenditures in front of you, take a closer look and find which expenses can be decreased and which can be cut out altogether. While your mortgage repayments obviously can’t be decreased, you can probably reduce your food bill by only eating at home and even get rid of other entertainment expenses like cable television. It’s essential that you are pragmatic about reducing your expenses. Always remember, if you’re trying to address financial problems then you must make sacrifices to resolve them.
Create a budget
Now that you’ve got your monthly expenditures jotted down without the unnecessary spending, you have to develop a budget. If you’re not familiar with creating a budget, there are lots of terrific apps you can download on your mobile phone. 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 calculate how much money you have left each month by viewing your income and expenses. It’s imperative that you stick your budget. If you think that it could be challenging 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 distress than others, so to ease your financial strain 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 kinds of debts as soon as possible. Bear in mind, you still have other fixed debts each month such as phone bills and electricity, so these have 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 pay off all your debts, you’ll need to find other sources of income. Are you able to work a second job? Can you sell any expensive household items that you can do without? Reaching out to family and friends is another effective way to try to address your challenges. 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 assistance
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 circumstances, there are a number of alternatives available like debt consolidation loans or debt agreements which can help those in need. Don’t wrestle with your debts for years before getting guidance, talk with Bankruptcy Experts Whitsundays on 1300 795 575 or visit our website for further information: www.bankruptcyexpertswhitsundays.com.au