Have your finances run away from you? Do you dread looking at your bank balance or opening the bills that drop through your mailbox? From time-to-time, we all face money worries; however, if they have been allowed to escalate for whatever reason, it can be hard to claw your way back out of the difficulties you are facing.
Taking control of your finances is essential, or your problems will get worse. But how can you take back control when your finances are in a terrible state?
In this article, we’ll look at how you can create a plan to get you out of debt and stop worrying about money.
Start Reading Bank Statements And Bills
The first step that you will need to take in order to recover your finances is to start reading your bank statements and bills. If you have online banking, get into the habit of regularly checking this to see how much money you actually have.
When you turn a blind eye to your finances, you won’t have a handle on exactly how much money you have. This can lead to you overspending and pushing yourself deeper into debt.
Whenever a bill comes through, open it, and ensure you have the means of paying it. Have a plan for how you will deal with it. If you don’t plan for how you will deal with your bills, then you will be less likely to pay them and more likely to let them build-up.
Speak To A Debt Charity
Getting out of debt is not easy, and the first step that you need to take is to admit that you have a problem managing your finances. Once you have done this, you will be able to ask for the help that you need to get yourself out of debt.
Speak with a debt charity. They will be able to provide you with impartial advice about your current financial situation. This may include tips on structuring your debt and working out which debts you should prioritize.
Review Your Outgoings
Often, when we don’t pay enough attention to our outgoings, they build up and become greater than our income. When this happens, it pushes us further into debt.
It is essential that you review your outgoings. This means going through all of your expenditures and working out exactly what you are spending money on.
Start a spreadsheet and begin tracking all of your spendings each month. This will help you to identify where you are overspending.
Prioritize Your Debts
Go through your finances and look at the different debts that you have. Work out which of them should take priority over the others.
Take a look at how much you owe, what the interest rates are on the debt, and how long you have left to pay on it.
Your intention should be that you will at least make the minimum required payments on each debt, but the higher priority debts will need to be paid off sooner.
Credit card interest rates are often very high, and minimum payments generally don’t cover the amount that gets added on, meaning that even if you only make these payments, you won’t ever be free of the debt. Make paying high-interest debts such as your credit card a priority.
Close Accounts That You Don’t Use
If you have any bank accounts or credit cards that you no longer use, close them. They will affect your credit rating, and there may be a temptation for you to start using them again and push yourself deeper into debt.
Cancel Unused Subscriptions
Go through all of your outgoings and see if there are any services or subscriptions that you pay for that you no longer use. For example, you may have streaming subscriptions that you rarely take advantage of, or you may be paying membership to a gym that you never go to.
Cancel any unwanted or unused memberships or subscriptions. While this may only save you a small amount each month, it will add up and save you a lot over the course of a year.
Are you paying as little for your household bills as possible? Very often, when you have been a customer of a company for a long period of time, you won’t get their best prices. Often, these are reserved for new customers as a way of enticing them in.
Shop around for better deals. But remember, the amount that you pay for your broadband, energy, phone line, and other household bills may not always stay the same. Be sure and read the small print when you sign up, find out what the prices will increase to and make sure that you are not locked into a contract that you can’t get out of once the prices rise.
Take Out A Consolidation Loan
Juggling several different loans and debts can be complicated. You may not be able to easily handle several different debts at any one time, as the total repayment amount may be too high.
One way that you could lower this is to take out one loan to repay all of the others. This is referred to as consolidating debt.
You could consolidate your debt by taking out online installment loans with Wise Loan. Before you take out a loan, make sure that you understand what the minimum payments are, how long you’ll be paying them, and what the interest rate on the loan is. Ideally, you will want a loan with the lowest possible interest rate. This will make it much easier to repay your debt, and it will give you a final end date for when you will be debt-free.
Take Advantage Of 0% Balance Transfer Offers
If you have credit card debt and you are in a position to apply for a new credit card, you may be able to pay your debt off quicker by transferring your debt to a new credit card.
Look for a credit card that offers 0% interest on balance transfers. By transferring to a 0% interest card, you will be able to work at repaying the debt without having to worry about the mounting interest.
Remember, a 0% balance transfer will only remind interest-free for a specific period of time. If you have not finished paying off the debt by this time, you should look at transferring your debt again to another 0% balance transfer card.
Learn How To Use A Credit Card Properly
Credit cards can get you into a considerable amount of financial trouble, but they can also be very useful. When making big purchases, you should always pay using a credit card. Then, make sure that you immediately pay off your credit card so that you don’t clock up any interest from that transaction.
The reason that you should always pay using a credit card is that you will have the backing of the credit card company should anything go wrong, and you need to get a refund.
Create A Budget
If you have specific budgets for different financial areas of your life, then you will be better able to take control of your finances.
Start off by working out how much your outgoings are in total. This should include any repayments on your debts, along with all of your monthly bills. Then compare this total with your income. Whatever money you have left coming in each month will need to cover your food, travel, and spending.
Divide up your remaining money realistically to ensure you have enough money to buy food. Create a specific budget for food, travel, and spending.
Change The Way That You Eat
If you are someone that eats a lot of fast food and takeout, then you’ll no doubt feel the pinch on your purse. If you have money worries, then you should limit the number of times you buy takeout and see this as being a treat rather than something that is standard.
Start eating home-cooked meals more. If you don’t have time to make a home-cooked meal every day, you could batch cook meals. This means cooking up several portions of one meal at a time and freezing it in portions.
You could batch cook several different meals at one time in order to get a variety of meals in your diet.
When you hit the supermarket to get your weekly or monthly shop, be sure that you take a specific shopping list with you. Plan out all of the meals that you will eat each week in advance; that way, you’ll be able to take better control over what you spend at the supermarket.
When it comes to your supermarket visit, avoid buying anything that is not on your shopping list. This includes the special offers that supermarkets put on the ends of aisles to entice you. If you don’t need something, then no matter how cheap it is, it will end up costing you more than you planned to spend.
While you are walking around the supermarket, take note of how much things are. Every so often, tally up your shopping and spend some time calculating percentages. Supermarkets have a habit of slowly increasing prices. You might not realize it on a week by week basis, but once you have done the math, you will probably see how much your shop has crept up by. If it is significantly so, you can reassess your shopping budget, make cutbacks, or swap supermarkets.