Tips on How to Resolve Your Financial Issues
There’s no doubt that financial difficulties can lead to a lot of stress and anxiety in our lives. Repeatedly thinking 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 well-being. The fact is, stressing over money isn’t going to fix your financial complications. If you’ve found yourself in a position where you’re battling to make ends meet, here are the best ways to deal with your financial problems so you can live a worry-free life again.
Document your monthly expenses
The first step in resolving your financial challenges is uncover exactly where your pain points are. Whether or not you’re dealing with a large credit card balance, you’re trying to increase your retirement savings, or you simply spend too much on dining in restaurants throughout the week, pinpointing the main causes of your financial issues will show you which expenditures should be prioritised so you can get your finances back on track. Get a pen and paper and jot down your current monthly costs including bills, debt repayments, food, tuition, transport, and any other items you commonly spend each month.
Cut down on your expenditures
After you’ve got your monthly expenses in front of you, take a closer look and examine which expenses can be minimised and which can be eliminated altogether. While your mortgage repayments certainly can’t be reduced, you can possibly reduce your food bill by only eating at home and even do away with other entertainment expenses such as cable TV. It’s vital that you are pragmatic about cutting down your expenses. 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 costs jotted down without the unnecessary spending, you need to develop a budget. If you’re unfamiliar with constructing a budget, there are loads of terrific apps you can download on your smartphone. 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 ascertain how much money you have left each month by reviewing your income and expenses. It’s necessary that you stick your budget. If you feel that it could be too hard 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 following your budget.
Prioritise your debts
Some debts cause more pain than others, so to ease your financial pressure as best as possible, try to reduce 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 aim to diminish these types of debts as soon as possible. Bear in mind, you still have other fixed debts every month such as phone bills and electricity, so these have to be taken into account as well.
Still feeling the heat?
If you’ve lowered your expenditures 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 costly household items that you can do without? Reaching out to family or friends is another useful way to try to address your problems. Whatever you do to get extra money, never get a personal loan from the bank to settle your existing debt – this will only exacerbate an already stressful situation.
Seek financial guidance
If the above steps haven’t relieved your financial strain, it’s better to seek financial guidance sooner instead of later. Depending on your individual circumstances, there are lots of solutions available such as debt consolidation loans or debt agreements which can assist those in need. Don’t wrestle with your debts for years before seeking help, reach out to Bankruptcy Experts Canberra on 1300 795 575 or visit our website for further information: www.bankruptcyexpertscanberra.com.au