Debt, work, marriage, children – these can be some of life’s biggest stressors, especially when it comes to finances. If you’re feeling stressed, you aren’t alone! At some point in life, almost everyone worries about money. Whether it’s money owed due to debt, or worrying about how you will manage in the future (for your child’s university education, or your retirement), it’s a part of life we have to deal with.
For some, this is easier said than done. Many people choose to ignore their financial issues and live with their head in the sand – but this doesn’t solve any problems. If you aren’t sure if you are in financial difficulty or not, these are some of the signs to look out for that you need help with your finances or debt:
- Your monthly bills are always paid late
- You can only pay the minimum amount due on your credit card or loans, or you miss payments
- You’re spending less money on essentials such as food, water and electricity, because you’re having to service your debt
- You constantly worry about being behind on rent or loan repayments
This is no way to live, and financial stress can go so far as to start affecting your relationships and your health.
The solution starts with being realistic about your problem, and taking active steps to get yourself out of it and back on track. Here are two things you can do that will really make a difference:
1. Start small
What are your biggest debts and how much can you afford to pay towards these? You might not be able to cut any one expense by a lot, but you might have a few monthly expenses that you can reduce by smaller amounts. With a debt repayment, remember that ANY extra amount you put in over and above your minimum payment each month will reduce the interest and the amount you pay each month. With home expenses such as electricity, you can save a fair amount each month just by being more conscious. For example, if you aren’t in a room, turn off the lights. Wait until you have a full load of washing before switching on the washing machine. If you use a heater, keep doors and windows closed, to help keep heat in. These are just a few simple things you can do.
2. Create a budget
Before you can make any serious headway with getting on top of your finances, it’s important to outlay your total monthly expenses. From this, you can determine which are the most important debts or payments you need to make first. You’ll also be able to see just how much you need to be paying out each month, and how much you have left over at the end of each month (which can go towards paying off a debt). If you find that you aren’t able to cover your expenses each month with the money you’re making, you can start looking at which costs can be cut or reduced.
These two steps might seem like “no-brainers”, but they will help you to consolidate and clarify where your financial issues lie, so you can then focus on the next step – working through your debt to reduce and ultimately eliminate it.
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