There’s no question that financial problems can cause a lot of anxiety in our lives. Endlessly worrying about how you’re going to pay your bills not only makes you distressed, 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 situation where you’re straining to make ends meet, here are the best ways to manage your financial concerns so you can live a stress-free life again.
List your monthly costs
The first step in overcoming your financial difficulties is discover exactly where your pain points are. Regardless if you’re dealing with a large credit card debt, you’re attempting to increase your retirement savings, or you just spend too much on eating out during the week, recognising the main causes of your financial problems 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 expenditures including food, bills, debt repayments, transport, tuition, and any other items you regularly spend every month.
Cut down on your expenses
When you’ve got your monthly expenses in front of you, take a closer look and find which expenses can be minimised and which can be eliminated altogether. While your mortgage repayments naturally can’t be reduced, you can likely reduce your food bill by only eating at home and even remove other entertainment expenses like cable television. It’s pivotal that you are pragmatic about reducing your expenses. Remember, if you’re dealing with financial challenges then you must make sacrifices to resolve them.
Develop a budget
Now that you’ve got your monthly expenditures jotted down without the unnecessary spending, you must develop a budget. If you’re not familiar with constructing a budget, there are plenty of wonderful apps you can download on your mobile phone. Personally, I’ve found the Budget Planning app from ASIC to be very reliable: https://www.moneysmart.gov.au/tools-and-resources/calculators-and-apps/budget-planner.
This will enable you to identify how much money you have left each month by looking at your income and expenses. It’s necessary that you stick your budget. If you sense that it could be too challenging 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 sticking to your budget.
Prioritise your debts
Some debts cause more strain than others, so to lighten 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 far better about yourself. Only paying the minimum repayments on your credit card bill can sometimes take years to pay off, so attempt to decrease these kinds of debts as quickly as possible. Remember, you still have other fixed debts each month including phone bills and electricity, so these should be taken into account as well.
Still feeling the heat?
If you’ve reduced your expenditures and made a budget but still find that there’s not enough money to settle all your debts, you’ll need 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 or friends is another useful way to attempt to address your troubles. Whatever you do to get extra 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 stress, it’s better to seek financial advice sooner instead of later. Depending on your individual situation, there are lots of options available like debt consolidation loans or debt agreements which can help those in need. Don’t fight your debts for years before seeking guidance, reach out to Bankruptcy Experts Dandenong on 1300 795 575 or visit our website for additional information: www.bankruptcyexpertsdandenong.com.au