There’s no question that financial concerns can create a lot of anxiety in our lives. Endlessly thinking 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, worrying about money isn’t going to cure your financial concerns. If you’ve found yourself in a situation where you’re straining to make ends meet, here are the best ways to resolve your financial challenges so you can live a stress-free life again.
List your monthly expenditures
The first step in dealing with your financial concerns is discover exactly where your pain points are. Whether you’re dealing with a large credit card balance, you’re trying to enhance your retirement savings, or you merely spend too much on eating in restaurants during the week, pinpointing the main causes of your financial concerns will show you which expenses must be prioritised so you can get your finances back on course. Get a pen and paper and document your current monthly costs including food, bills, debt repayments, transport, tuition, and any other items you commonly spend each month.
Lower your expenditures
After you’ve got your monthly expenses in front of you, take a closer look and find which expenses can be lowered and which can be severed altogether. Although your mortgage repayments naturally can’t be lowered, you can possibly reduce your food bill by only eating at home and even eliminate other entertainment expenses such as cable TV. It’s necessary that you are pragmatic about cutting down your expenses. Don’t forget, if you’re trying to address financial problems then you need to make sacrifices to resolve them.
Create a budget
Now that you’ve got your monthly expenses written down without the unnecessary spending, you must construct a budget. If you’re not familiar with making a budget, there are a number 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 find out how much money you have left every month by reviewing 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 perhaps 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 alleviate your financial stress as best as possible, aim 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 diminish these types of debts as quickly as possible. Bear in mind, you still have other fixed debts every month like phone bills and electricity, so these need to be taken into account as well.
Still feeling the heat?
If you’ve reduced your expenditures and developed 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 costly household items that you can do without? Reaching out to family or friends is another practical way to try to resolve your difficulties. Whatever you do to get additional money, never get a personal loan from the bank to repay your existing debt – this will only exacerbate 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 situation, there are lots of solutions available such as debt consolidation loans or debt agreements which can assist those in need. Don’t fight your debts for years before getting help, call Bankruptcy Experts Wangaratta on 1300 795 575 or visit our website for more information: www.bankruptcyexpertswangaratta.com.au