Many of us complain from time to time about our finances. We complain that we cannot afford the luxuries that we would like or that something coming up is costing us too much… perhaps our bills have gone up and we are finding ourselves with less and less disposable income. To find yourself in a position where your finances feel a little tight is nothing new.
However, what if you find yourself experiencing more serious problems? Let’s say, for example, that you can’t afford to pay your bills or meet your monthly financial commitments. What if your mortgage is out of reach for your and credit cards and loan repayments are stacking up unpaid? Does this indicate a more serious debt problem?
Well, perhaps. But it is possible that your finances are tight simply because you’re spending too much on non-essentials. Before going into financial panic mode, you need to assess the severity of the situation. Back to the traditional pen and paper for this then!
You need to write down clearly everything that you earn and spend. This will be two lists. One should include details of all forms of income you receive on a monthly basis from any and all jobs you might have to income gained from other sources including benefits etc. You need a full understanding of how much money you really have each month. You should also write down your expenses, noting only the essentials such as basic food shopping bills, utilities bills and any debt or credit card repayments.
Now you need to establish whether there’s a difference between the two. If your expenses are much higher than your income there is an issue there and the next step it to assess whether it will be long term. Examples of a short term problem might be in times where you are unable to work for a couple of weeks because of illness etc. This might mean that you have temporarily have less money. If this is the case and you know that soon your situation will be rectified, personally get in touch with your creditors and see if you can get a bit of help in the short term. If it’s looking like it might be a long term issue, on the other hand, your best move would be seeking professional advice.
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