If you’re worried about your finances, then you’re not alone. Every year, thousands of people come to the difficult realisation that their financial situation is no longer viable. They need to scrap what they have been doing and devise a new plan.
Filing for bankruptcy may seem like your only option; it means a clean financial slate and that all debts are written off, but before you make that choice or another drastic decision that can leave a black financial cloud, along with the impact on your credit rating and what you may be able to borrow and buy, there are some important things to consider.
Avoiding bankruptcy is preferable, so if you’re already in a precarious financial situation, you may wonder where to turn next. Well, it’s time to come up with a new budget and plan. Here we’ll look at how you can avoid filing for bankruptcy and gain better control over your finances.
Understanding and recognizing that your finances are spiralling out of control is the first step towards fiscal absolution. Before you succumb to this last financial resort, don’t be afraid to reach out and ask for help. You’ll find plenty of bankruptcy advice online here. You’ll find that the most straightforward and practical advice will certainly help you find a way through this financial minefield. You may find that a simple change in your spending habits is the key to unlocking your financial freedom once and for all.
Seek a financial expert or planner that can help give you the framework you need to develop a budget and plan of action.
Look at your budget
Do you know how much you’re spending each month? If the answer is no, highlighting your expenses could help you regain control of your money and keep most of it in your pocket! All those little online purchases quickly add up, as do those daily visits to the supermarket. Go through your accounts, and you’ll soon see a pattern of behaviours contributing to your current situation.
At this point, you can create a basic budget that covers all your necessary expenses. Instead of going to get a loan in a hurry, which happens, maybe it’s time to sit down, note all of your expenses such as food, rent and utilities, and of course, all the extras, and start making a realistic budget that you can stick to.
Find ways to cut back
If your debts are enormous, cutting back on certain luxuries might not be enough. If this is the case, then downsizing entirely could be the answer. Consider downsizing your home, renting a cheaper property, saying no to your holidays this year, and putting the money back into your budget instead. This could mean going down to one car and swapping it for a cheap run-around rather than a gas-guzzling SUV.
Every penny counts at this stage, so go through your more minor expenses and see where you can make additional savings. This means cutting back on streaming services, subscriptions, frivolous online purchases, alcohol and eating out.
Focus on your income
If you have a job, consider asking for additional hours or that pay rise you deserve. Ask your partner to do the same. If possible, consider taking on a second job until you get a stronger hold on your financial situation. Finding other ways to boost your income is also welcome. This could mean selling your car or motorcycle or even renting that spare room.
If you’re having money issues, the two significant factors that will turn that around are more income and adequately planning how you spend and save it.
If you’re worried about your financial situation, then don’t suffer in silence. Reach out to a debt expert, personal banker and/or financial planner and discuss your issues as soon as possible. You’ll be surprised how much a little help and a lot of planning will do for your finances and, ultimately, your life.