Five Steps For Financial Health

Post by Sharat on January 15, 2010 · Under Australian Economy, Auto Loans, Featured Articles, Hints and Tips, Personal Finance, Self Help, credit cards, home loans, interest rates, loans, mortgages · Comment

Recession can cause people to feel a lot of stress, as budgets tighten and people have to do more with less. Fortunately Australia seems to have put the worst behind it, and if you have lost a job or are on the hunt, then things certainly seem to be a lot brighter than a year ago.

If you are still feeling the pinch though, it can take its toll on your body, causing a variety of symptoms from body pain, sleeping difficulty and exhaustion. There is even a name for the condition, as silly as it sounds it’s called Recession Strain Injury, and there are millions of Australians who owe more than they can manage and are at risk of suffering from physical stress symptoms as a result of money problems.

If you find yourself suffering from financial tension, here are five tips that can help you get your financial position into a healthier condition.

1) Diagnose Your Problem

Perhaps the first thing you need to do is calm yourself, and once you have taken a deep breath, write down your after tax take home pay each month. Doing this is the first step in defining what your boundaries are for a financially healthy life.

You might find you can extend your earnings by claiming welfare payments if you are unemployed, renting a spare room out, or taking a part time job. If you know what you have written down is the end of it, then you will have to learn how to live within your boundaries.

2) Take Control Of Your Life

Once you have determined what your boundaries are, you need to start looking at where the money is going. You need to start looking at your monthly credit card and bank statements to find the exact source of your financial pain.

Writing down your daily expenditure is a useful way of tracking where your money is going, and whether you are making the best use of your dollar. I run a monthly spread sheet, which records everything I spend on my debit or credit cards, and every time I take money out from a machine. In the age of internet banking its easy to see where and when you spent your money, and the spreadsheet lets me know that perhaps I am exceeding my monthly limit, and where I can cut back on spending.

Sometimes I don’t want to know where and when I spent my money, because I know perhaps I have gone a little too far, but it’s something I have disciplined myself to do, It is important to know the news even when it’s not good.

3) Get Your Life In Order

After you have worked out what your monthly budget is, and where exactly your cash is going, the next thing you need to do is work out which expenses are the most important to you, as opposed to which of your creditors are giving you the most grief.

You need to focus on the most important payments; mortgage or rent is the absolute first. There isn’t anything more important than keeping a roof over your head. After that you should start looking at any court ordered payments, and unpaid tax, because legal action apart from being more than a pain, adds to your financial burden. Finally you should look at any unsecured debt you have such as credit card or your overdraft.

4) Maintain calm

Even if you find yourself in a financial pickle and under a mountain of debt, the courts tend to guarantee your right to a basic standard of living. The courts have no interest in seeing you being impoverished. This means the court will ensure you have enough cash to pay your mortgage and utility bills, as well as feed and clothe yourself and family.

5) Talk things over

Find someone you can talk too, obviously if you are married or in a relationship, the first person is your partner, it is important to have some support if you want to turn you debt situation around. Creditors are not necessarily rigid unhelpful organizations you would think they are. They have a vested interest in helping you pay off your bills, and have plenty of experience in soothing customers who find themselves overwhelmed.

If you are single, then talk to a friend or debt councillor, but make sure you find someone you can talk over the things that are causing you the financial stress you are under. It is important to understand and believe you are not alone.

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