Financial problems can bring about a lot of anxiety in our lives. Constantly thinking about how you’re going to pay your bills not only makes you apprehensive, but also places stress on your relationships, family, and well-being. But, stressing over money isn’t going to fix your financial challenges. If you’ve found yourself in a position where you’re struggling to make ends meet, here are some tips on how to address your financial problems so you can live a worry-free life again.
List your monthly costs
The first step in resolving your financial problems is identify exactly where your issues lie. Whether you’re dealing with a large credit card debt, or you’re trying to boost your retirement savings, or you merely spend too much on eating out throughout the week, pinpointing the main causes of your financial woes will reveal to you which expenditures must be prioritised so you can get your finances back on track. Document your current monthly expenditures including debt repayments, bills, food, transport, tuition, and any other items you generally spend every month.
Cut back on your expenditures
Once 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 cut out altogether. Although your mortgage repayments naturally can’t be reduced, you can probably decrease your food bill by only eating at home and even remove other entertainment expenses such as cable television. It’s critical that you are pragmatic about reducing your expenses. Always remember, if you’re dealing with financial troubles then you must make sacrifices to resolve them.
Create a budget
Now that you’ve got your monthly expenditures documented without the unnecessary spending, you have to develop a budget. If you’re not familiar with making a budget, there are many great apps you can download to help.
These apps will help you to determine how much money you have left each month by viewing your income and expenses. It’s critical that you stick your budget. If you sense that it could be too hard 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.
Prioritize your debts
Some debts cause more strain than others, so to relieve your financial burden as best as possible, aim to reduce your largest 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 lower these types of debts as soon as possible. Always remember, you still have other fixed debts every month like phone bills and electricity, so these have to be taken into account as well.
Still feeling it?
If you’ve cut back on your expenses and developed 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 helpful way to attempt to resolve your challenges. Whatever you do to get additional money, never get a personal loan from the bank to settle your existing debt – this will only compound an already stressful situation.
If you have exhausted these options and are still struggling to get out of debt, consider consulting a Licensed Insolvency Trustee at Welker & Associates. We will review your financial situation in a free, no-obligation meeting and then come up with a resolution that will start you on your way to debt-free life.
