There’s no question that financial challenges can trigger a lot of stress in our lives. Always fretting about how you’re going to pay your bills not only makes you anxious, but also places stress on your relationships, your family, and your health. The fact is, worrying about money isn’t going to fix your financial challenges. 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 worry-free life again.
List your monthly costs
The first step in resolving your financial troubles is find out exactly where your pain points are. Regardless if you’re dealing with a large credit card debt, you’re trying to boost your retirement savings, or you just spend too much on eating out throughout the week, pinpointing the main causes of your financial woes will reveal to you which expenditures have to be prioritised so you can get your finances back on course. Get a pen and paper and document your current monthly costs including debt repayments, food, bills, tuition, transport, and any other items you commonly spend every month.
Reduce your expenditures
After you’ve got your monthly expenditures in front of you, take a closer look and find which expenses can be minimised and which can be severed altogether. While your mortgage repayments clearly can’t be lowered, you can probably lower your food bill by only eating at home and even eliminate other entertainment expenses such as cable television. It’s pivotal that you are pragmatic about reducing your expenses. Always remember, if you’re trying to overcome financial troubles then you need to make sacrifices to resolve them.
Create a budget
Now that you’ve got your monthly expenditures jotted down without the unnecessary spending, you must develop a budget. If you’re unfamiliar with making a budget, there are plenty of fantastic 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 calculate 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 feel that it could be challenging 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 following your budget.
Prioritise your debts
Some debts cause more strain than others, so to relieve your financial burden as best as possible, try to decrease 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 lower these kinds of debts as quickly as possible. Bear in mind, you still have other fixed debts each month including phone bills and electricity, so these have to be accounted for as well.
Still feeling the heat?
If you’ve cut down your expenditures and created a budget but still find that there’s not enough money to pay off all your debts, you’ll have to find other income sources. 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 useful way to attempt to address your problems. Whatever you do to get additional money, never get a personal loan from the bank to pay off your existing debt – this will only intensify an already stressful situation.
Seek financial guidance
If the above steps haven’t relieved your financial strain, it’s better to seek financial advice sooner rather than later. Depending on your individual situation, there are a number of alternatives 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, phone Bankruptcy Experts Albury on 1300 795 575 or visit our website for further information: www.bankruptcyexpertsalbury.com.au