Financial stress can be overwhelming.
Worrying about money can take a serious toll on your mental health. Sometimes financial worries are the result of events outside your control, such as a devastating weather event or an illness that means you can’t work. Whatever the cause, when you find yourself unable to meet your financial obligations it can feel overwhelming.
Financial security the goal for most people.
Most people want to feel financially secure.
Financial security doesn’t always mean you can afford an extravagant lifestyle and own significant investments. It’s more about being able to comfortably cover the expenses of a modest lifestyle and being in a position to manage in the case of an emergency. Over the longer term, it’s also important to plan and save for meeting your financial needs in retirement. Overall, it’s having the feeling that you’re in control of your finances.
How to manage financial difficulties.
When you find yourself in financial difficulty, the sooner you take steps to get on top of it the better to prevent things from getting worse.
Here are some tips to help you get on top of things when you’re facing a difficult financial situation:
Make a budget.
Budgeting will help you understand your financial situation. Begin by listing your income and expenses and see if there are any opportunities to reduce your bills. Identifying spending patterns can also help you see where your money is going and make changes to your budget.
Save money where you can.
Even if it’s only in small amounts, savings can help you feel more financially secure and have money on hand for any unexpected costs. Setting a savings goal is a good way to get motivated.
Get on top of your debts.
Debt consolidation – which means rolling all your debts into one combined debt – can make it simpler to manage your repayments. But before you decide to consolidate your debts, look at the fees and interest rate on the new debt to make sure the new repayments will be more less than what you’re currently paying. If you’re having trouble getting on top of your debts, contact the lender to see if they can offer you some concessions or help you work out a payment plan.
Set aside money for emergencies.
Having some funds put aside for a rainy day can stop you from getting into financial difficulty if something unexpected comes up.
Seek support if you need it.
Many community and not-for-profit organisations provide help to those experiencing financial difficulty and there is a range of financial support available from the government. Free financial counselling services are also available.