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What to do when you’re in financial trouble

 

It can be hard to know what to do when you’re under financial pressure. But there are always solutions to problems and places you can turn to for help. Continue reading to discover how you can find a way out of your situation.

Work out what changed

If you find yourself in financial trouble, the first thing to work out is what happened. Maybe it was something obvious; you lost your job, or your car broke down unexpectedly and you needed to buy a replacement.

But it’s possible that something more subtle lead you into difficulty. If you’ve simply been spending beyond your means, then you need to acknowledge that so you can make changes to your behaviour.

Whatever the cause, running into financial trouble can be highly stressful and you shouldn’t beat yourself up if bad decisions lead you to this place. You’ll want to discover what happened so you can prevent it occurring again. But holding yourself responsible for errors won’t help you to fix things, it will just add to your woes.

Work out your priority expenses

If you’ve ran into fanatical strive, the next thing to do is to work out what your priority payments are. This list should include your mortgage (or rent), your energy (gas and/or electric), food, transport, insurance and any childcare costs. These are the things that are fixed and essential; you will need to pay them in order to be able to live your life without making any major adaptations.

You should always try to ensure that your priority expenses are paid first. These expenses come before debt or any consumer spending.

Look at your debt

The next thing to do is to make a list of any debts that you have. You write them down, along with the interest rates that you’re paying, so you can determine what your most expensive debts are.

If you have a lot of debt, it could be that debt consolidation is an option. Click here to read more about that potential solution.

Make cutbacks where you can

If it is possible, make sure cuts to your expenses. Work out if there are any areas where you can save some money. It might be that you can reduce your supermarket spend. Or have a night in with friends, instead or going out for dinner. Little changes do add up and you may find that making some lifestyles tweaks helps you to get out financial trouble quicker.

Speak to somebody

If you’re struggling with your finances and you’re facing money troubles, then it’s important to open up to somebody about it. Worrying and keeping things bottled up won’t help. So speak to somebody you trust. If you don’t feel comfortable opening up to a friend or family member, then speak to an organisation like Citizens Advice. They will be able to offer you impartial advice.

Make a budget

The next step should be making a budget. This will provide you with a financial plan going forward. You can decide what you spend your money on. It will also mean that you can allocate some cash to socialising with friends, or to family days out. Those things are important when you’re working through money troubles, as we all need things to look forward to and enjoy.

Try not to worry

I know it’s easier said than done, but if you’re experiencing trouble with your finances, then try not to worry. Everybody experiences these problems from time to time and nothing is unfixable. You will be able to find a solution.

Note: this is a paid collaboration.

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