For the most part when each one of us starts generating a steady flow of income, whether through a job or via a business, the manner in which we handle our finances pretty much shapes itself out nicely and works out well, perhaps due to an inherent knack we develop for basic financial management or indeed if it is by specific design. There is a however a specific point in time when you’ll need to explicitly make a targeted effort to get a good grip of your finances, managing specific elements so that you’re in full control of how things shape up in the long run. As prepared as you can be however and as diligent as you could be in implementing the right practices, sometimes things just inevitably go pear-shaped, in which case you need to know what your options are when the finances aren’t quite working out anywhere near as planned.
Clear the financial clutter
This step is listed first because if it can save you from your financial woes then it means that you’re not too deep inside what financial troubles can look like. You’re only about knee-deep and all it takes is clearing the clutter to wriggle yourself completely free and then put into place measures that will prevent you from even getting into any trouble in the first place.
What does it mean to clear the clutter though? Clearing the financial clutter simply entails looking a little deeper at your spending habits and then trying to make things a little less messy. Look at what your bank is charging you for, for example and try to reduce those bank charges by perhaps using less cash and paying directly with your debit/credit card, or do EFT payments for fixed monthly expenses instead of a debit order that incurs fees. Just try to see where you’re wasting money unnecessarily in the disguised name of convenience as these things add up to some significant sums if left unchecked.
Reduce your expenditure
Reducing your expenditure is perhaps just a follow-on and expansion of clearing the financial clutter, except here you’re going to be targeting specific areas of your life. You’re going to actively look for ways through which to cut down on your expenditure here in order to free up some money to be redirected to getting yourself out of the financial hole your current financial management patterns seem to be digging you into. The actual measures you take to try and reduce expenditure can be small and incremental or they can take the form of more drastic measures, like perhaps choosing to downgrade your car to one with a smaller engine so that you don’t have to spend so much money on fuel and other maintenance costs. It’s not an easy commitment to make, but if you’re serious about reducing your expenditure and you treat it as the matter of importance it is, you’ll find ways to reduce your spend instead of finding excuses.
Consolidate your debt
Debt consolidation starts to get into that territory of financial management which is a little bit more stigmatized because some consumers tend to associate a bit of shame with it. Don’t be ashamed…Finding yourself in a position where you’re experiencing some financial difficulty is in actual fact something that’s expected at some or other point in time, so if that difficulty is caused by a piling mountain of debt then consolidation is one of the options you have to help you out. Consolidating your debt simply means you pretty much approach a debt-buyer who is willing to purchase all the debt you have, roll it all up into one and then work out new repayment terms for you.
Naturally this will mean that you’ll be taking a little longer to pay off your debts (which are now rolled up into one), but this will free up some money so that you can keep functioning financially. This freed up cash shouldn’t be seen as a new source of disposable cash, but should be rather used to help you navigate your financial difficulty with a medium to long-term view of the future.
Start over, file for bankruptcy
Look, I’m not going to make less of it than what the full magnitude of the situation is, but filing for bankruptcy does not signal the end of you financially. If anything it’s like wiping the slate clean and starting all over again, but naturally you’d have a record of perhaps needing a little more assistance with the credit ratings agencies and the lending market at large.
That said as well though, filing for bankruptcy was left as the last of the discussion sub-topics because it should probably be your last resort, assuming you’ve gone through all the previously discussed steps and you’re still unable to resolve the financial difficulty you find yourself in. Still, prior to taking this last-resort step, make sure you have the full complement of information on how to file for bankruptcy and what the implications are thereof because the processes to follow that step will require you to step up your financial literacy game along with needing your full commitment.
As long as you have the ability to keep bringing in some or other form of income, whatever financial issues you have can be resolved. Hopefully the steps listed above have given you some ideas as to what you can do to make things work out in your favour, but keep in mind that none of this is at all easy.