Financial struggles are faced by lots of people, so you are absolutely not alone in any kind of financial stress or if you are having difficulty in making ends meet. Often the feelings of shame, guilt and worry that come along with facing financial difficulty only play into the vicious cycle. When you are feeling bad about our situation and beating yourself up, it can become very difficult to look at the situation rationally – let alone make positive changes to improve your circumstances. If you are experiencing the effects of financially related stress, there are things you can start doing immediately to save money, get support and find a debt solution - before you suffer another sleepless night.
1. Be Positive
We know it’s much easier said than done, but it can help to just write a list of all the things that are going well in your life. Keep it simple! If you think it could get overwhelming, just do your best to reframe the situation so you can concentrate on what you have done well instead of the struggles you are currently having. The more you focus on the negatives, the less likely you are to be able to remind yourself that you have a choice in what is happening in your life. On the other side of the coin, the more often you think about the positive things, the more likely your brain will zero in on the positives instead of the negatives.
2. Remember You Have Choices
Once you realize that your situation can be rectified by making different choices about managing debt repayments and home assets, you can take action for the future. Start by making a budget, sticking to it, cutting back and choosing to spend money wisely rather than letting debt control you. For example, if you would normally make purchases on your credit card, perhaps it is time to cut the credit card up and pay with cash! Your choices are always your choices, and the more you recognise and act on that, the more your finances and debt situation will improve! Making smart money choices is the mother of getting out of debt.
3. Make A Plan
We have written often on this blog about the importance of setting a realistic budget and sticking to it. Yet, planning also refers to your ability to plan ahead for moments when you might be tempted to spend too much or for emergencies such as a community or housing crisis. Setting a budget and sticking to it might mean you have to plan what you will spend on holidays, at Christmas, on a night out or when you next visit the supermarket. But, by putting a plan in place, you will be mentally prepared to deal with the temptation to overspend and you are less likely to need debt help or have to rely on a credit card or buy now pay later service provider. At the end of the day, every time you get into debt, it means your future self has to make debt repayments – so give your future self the peace of mind by budgeting for emergencies as your insurance policy.
4. Give Yourself a Break
Focusing on what is going wrong in your life will likely put you in a negative spiral, and if spending money is your therapy, you will find your situation worsening. Give yourself a break from thinking about the situation and do something you enjoy like going out for a walk, playing a sport you love, seeing a movie, or spending time with your children or friends. Pretty soon you will be feeling more fulfilled and energized, and in a better place to tackle your financial problems. Getting debt advice from a professional Debt Advisor or Credit Counsellor is another way to help manage debt, as having somebody to point you in the right direction with the right financial information is the best emotional support when you need debt help!
5. Choose the Right Debt Solution
If budgeting isn’t working anymore and you can’t make repayments, it’s time to look into other debt solutions. First and foremost, you should apply for hardship with your lender and negotiate debt with your creditors to see if they can pause your repayments, stop the interest, or enter a new payment to give you temporary debt relief. (Note if you have significant mortgage debt and are facing the threat of foreclosure for Council Rates, Water Rates for from your Mortgage Provider, you can visit the ATO’s website to apply for early release of super. If this doesn’t work, the next step is to seek professional debt assistance from a personal insolvency service such as Credit Counsellors. Credit Counsellors can help you understand the pros and cons of various debt solutions (such as hardship, selling assets, debt consolidation refinancing or going through a dispute resolution scheme) alongside the various insolvency options such as debt agreements and bankruptcy impacts. You can also check out the Australian Financial Services Authority (AFSA) website for more information about personal insolvency options, debt solutions service providers, the treatment of credit, debt and assets (such as your car and home assets) under the Australian Bankruptcy Act, and for more info that can help you with choosing a debt agreement administrator.
6. Get Help
There are lots of avenues for support and debt help when you are having financial struggles. You can always start by talking to a trusted friend, family member, or a debt advisor. Credit Counsellors have trained professionals available to talk to about the options for managing debt. We aim to help you to create a plan of action so you can tackle your debt, get the interest under control, and finally receive the debt assistance you require. Contact us on 1300 003 328 to find out how we can help you.