You don’t want anyone to have a personal financial crisis.
A personal financial crisis (PFC) can debilitate your entire existence. It feels like a lifelong collapse like Trump’s house.
PFC can be triggered by a variety of factors, but the most common are Debt burden I’m out of control.
But with discipline and some hard work, there are loopholes. Here is my 6-step guide on how to handle PFC. That way, things can turn around as soon as possible.
1. Understand the big picture
First and foremost, make a list of all your assets and liabilities to get a bird’s eye view of where you are financially. So Make a budgetTo understand where your money actually goes.
It’s easy to do. List your income in one column and put all your regular and irregular in another column Monthly cost..
Use a fine comb on your receipt and bank statement last month to make sure all expenses are listed accurately.
2. Set smart financial goals
If you are in a difficult financial situation, your main goal is probably Get out of it as soon as possible, This is perfectly reasonable.
But that is not a good economic goal.
NS Good financial goals It has a clear deadline and can be divided into smaller, more manageable steps
Here are some examples of good goals: Get rid of my credit card debt By Christmas, that is, for the next four months, you will have to repay $ 150 a week. “
3. Manage your spending
Think about your spending in terms of Desires and needs.. Needs are indisputable. For example, you should always have room in your budget for groceries.
It is convenient to have wants such as gym membership. new clothes Or eating out. If you are in the midst of a personal financial crisis, your desire is to go first.
4. Manage your debt
First, see if you can minimize the interest you are paying. this is, Credit card balance transfer Or by Consolidate multiple debts To reduce the overall interest you pay.You can also do it directly Negotiate a better rate With your lender.
Then try to turn all of your additional money towards Make additional repayments, This saves interest and helps you pay off your debt faster.
(Simple note: Don’t be afraid to use your savings to make additional repayments. Bank money only makes money Less than 2% these daysCredit cards and personal loans still charge double-digit interest rates. )
Finally, if you have problems paying off your debt or invoice, talk to your lender or creditor right away.They may be willing to negotiate more favorable terms, and you can avoid Black mark on your credit report..
5. Do not go alone
If you are drowning in debt or simply can’t find an escape route There is help available..
Financial counseling is a free service offered by many organizations and aims to help you regain control of your money.
contact Financial Counseling Australia Find a counselor near you at 1800 007 007.
6. Plan for the next PFC
Hopefully, the steps outlined here will help control and pass through (and improve daily) the PFC. Economic habits that too).
However, make sure you are ready, as PFC can occur again.
Start saving money in your savings account to cover unexpected costs.This is a “rainy day” or Emergency funds..
And don’t forget to do a full review of your insurance for both of you (think) House, contents, car And for you and your family (for beginners) and for you and your family (life, income protection, Health insurance And complete and permanent failure).
This allows you to survive (preferably) the next PFC when it occurs.
How to overcome a personal financial crisis
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