There’s no question that financial troubles can bring about a lot of stress in our lives. Always thinking about how you’re going to pay your bills not only makes you distressed, but also places stress on your relationships, your family, and your well-being. The fact is, stressing over money isn’t going to fix your financial complications. 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 complications so you can live a stress-free life again.
Document your monthly expenses
The first step in taking care of your financial difficulties is find out 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 just spend too much on eating out during the week, pinpointing the main causes of your financial troubles will show you which expenses must be prioritised so you can get your finances back on track. Grab a pen and paper and jot down your current monthly expenses including bills, debt repayments, food, tuition, transport, and any other items you frequently spend each month.
Cut down on your expenditures
Once you’ve got your monthly expenditures in front of you, take a closer look and see which expenses can be minimised and which can be removed altogether. Even though your mortgage repayments certainly can’t be lowered, you can probably decrease your food bill by only eating at home and even remove other entertainment expenses like cable television. It’s vital that you are pragmatic about lowering your expenses. Remember, if you’re trying to overcome financial challenges then you need to make sacrifices to resolve them.
Set up a budget
Now that you’ve got your monthly costs written down without the unnecessary spending, you must set up a budget. If you’re not familiar with developing 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 valuable: 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 looking at your income and expenses. It’s imperative that you stick your budget. If you think 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 suffering than others, so to alleviate your financial strain as best as possible, try 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 aim to decrease these types of debts as soon as possible. Keep in mind, you still have other fixed debts each month such as phone bills and electricity, so these should be taken into account as well.
Still feeling the heat?
If you’ve lowered your expenditures and created a budget but still find that there’s not enough money to settle all your debts, you’ll need to find other income streams. Are you able to work a second job? Can you sell any expensive household items that you can do without? Reaching out to family or friends is another effective way to try to resolve your concerns. Whatever you do to get additional money, never get a personal loan from the bank to repay your existing debt – this will only worsen 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 rather than later. Depending on your individual situation, there are lots of alternatives available like debt consolidation loans or debt agreements which can help those in need. Don’t fight your debts for years before getting assistance, call Bankruptcy Experts Penrith on 1300 795 575 or visit our website for further information: www.bankruptcyexpertspenrith.com.au