7 Ways to Get Out of Money Trouble and Start Afresh
Money trouble is something that can happen to all of us from time to time, especially during a time like the one we’re currently living through. It doesn’t necessarily mean you’ve mismanaged your finances; any number of unfortunate adverse circumstances can result in a loss of your job, for example, or someone in your household losing their primary source of income. When this happens, one of the most important things is not to despair. There are ways out of money trouble, and many of them are easier to engage with than you might think. Here are 7 ways you can get yourself out of money trouble and start looking forward to a new beginning.
Take Out A Personal Loan
We absolutely must stress that this shouldn’t be your first option if you’re already struggling with too much debt. However, if you have numerous smaller debts from various sources – or if you’re looking to improve your credit score, for example – taking out a loan could help. If you do have a bad credit rating, you don’t need to despair; many companies will offer bad credit personal loans that you can use to pay off debts, buy something you need, or give yourself a much-needed boost before payday. Again, if you’re already struggling to pay back loans, taking out another one likely isn’t a good option, but it can be a great way to consolidate debt and make your life easier.
Make A Budget
It’s hard to overstate the importance of creating a budget when you’re looking to repay your debts. There may be areas in which you can lessen your expenses so as to free up a little more money to help you pay those debts off. Things like buying supermarket own-brand goods, cancelling subscriptions, and not driving a car can all add up massively and leave you with much more money at the end of the month than you would otherwise have. When you have more money to play with, you’ll find it much easier to pay off your debts. Of course, this will be easier for some than for others, but it’s always worth examining where you could tighten the purse strings a little.
Prioritize the Most Important Repayments
Sometimes, it can be incredibly daunting to look at your bank balance, especially if you’re struggling financially. However, this is something you’ll need to do if you want to lift the spectre of financial difficulty. Look at what’s coming out of your account and think about the most important repayments or expenses to prioritize. What’s the single biggest thing weighing on your account? That’s what you need to focus on getting rid of, if you can. If it’s a loan, try to focus as much of your attention as you can in repaying it. Alternatively, it could be a phone contract or bill, in which case there may be a cheaper option available.
If you start panicking about your financial health, it can lead to drastic decisions that you may regret later. Try to calmly take stock of your situation. Panicking won’t change your immediate circumstances, but trying to make rational, calm decisions may well be one of the steps towards doing just that. It may be daunting to look at an expenditure on your bank account and think it’s completely insurmountable but try to break it down into smaller pieces. Instead of thinking “how am I going to pay all of this at once?”, try rephrasing the question in your head to something like “how can I start to make repayments on this on a more regular basis?”.
Don’t Be Ashamed to Ask Friends and Family
There is absolutely no shame in being in debt. It’s something that can happen to any of us, at any time, and for any reason. That’s why, if you have a good relationship with your friends and family – and if they themselves aren’t in financial trouble – it’s worth talking to them about what they might be able to do to help. You don’t have to outright ask them to bail you out; instead, have an open and frank discussion about your financial situation. It may be that all they can do is point you in the direction of a debt advice service, but even that is a great start and can be a massive boon for you in times of trouble. If they can help you out with temporary financial aid, that’s even better.
Take It Slow
If you happen to find yourself at the receiving end of a financial windfall, try to resist immediately spending it on the most pressing debt. Plan how to spend it so that you can make the biggest impact on your overall financial health. Similarly, if you do find yourself in a position to begin making repayments, try to maximize the possibility of being able to continue doing so in future rather than simply looking at the now. When you’re in debt, it can be hard to look beyond the present, but the future is extremely important to your overall repayment plan. Don’t simply throw money at the problem assuming it will go away. There may be more to fix. Speaking of which…
Try to Understand How You Got Here
Sometimes, debt happens because of things we cannot control. Family members sadly passing away, job loss, or unexpected expenses can all hit us hard when we’re not anticipating it, and there’s nothing we can do about that. However, sometimes, debt can hit us for reasons we could have seen coming. Conduct an honest analysis of your financial situation and ask yourself how you came to be in debt. There may well be an underlying reason that you could work on so that it doesn’t happen again. Many people don’t lift themselves out of debt for their entire lives, so if you’re lucky enough to do so, think about how you might be able to prevent a repeat of the situation in future.