It is important to know if your finances are heading in the right direction. If you’re going to reach your goals, or just trying to keep your head above water, YOURLifeChoices simple checklist will help you get your affairs in order.
We often emphasise the importance of budgeting, but that’s because it is key to financial success. Do a comprehensive budget, marking down truthfully your income and expenditure. Include all payments for debts, as this is the one area you should try to reduce.
Map your spending patterns
For a month, take a notebook with you wherever you go and mark down each item of expenditure – no expense is too small to be included. If there are other members of your household who also spend from your account, get them to do the same.
Make the cut
Ascertain if there is any spending which can be reduced, or cut altogether, to balance your budget or pay off some debt.
Prioritise your debts
Mark down all debts in order of the highest interest items first, as these are the ones you should try to pay off most quickly. If you’re only making minimum payments, it may be wise to consolidate all your borrowings into a standard rate personal loan.
Catalogue your credit card spending
Gather together your credit card statements for the last six months and categorise the types of spending for which it’s used. If you’re using it to pay everyday items such as shopping and fuel and not paying it off each month, then you’re definitely living beyond your means. Have another look at your budget to see if you’ve been honest about how much you actually spend.
Pay on time
Make sure all your bills are paid by the due date. Some utility providers will actually give you a discount if you pay on time. If you’re struggling to pay any of your bills, contact your lender or provider who may be able to assist with hardship provisions.
Don’t ignore your creditors
If you have fallen behind on payments, don’t just bury your head in the sand. Communicate with lenders in an honest way; don’t promise payments you know you can’t afford. If you’re uncomfortable dealing with your creditors, then seek assistance from a financial counsellor who can help and in some cases, can contact your creditors on your behalf.
If you’re experiencing financial difficulty, find a financial counsellor in your area.