Whether you’re struggling financially as a result of the pandemic or you were struggling before the pandemic began and are still struggling now, it can be hard to work out how to get out of a financial rut that you have found yourself in. It can feel like no matter how much you earn or what plan you put in place, it’s impossible to work out how you can make your way out of debt.
While it can seem almost impossible to get out of debt, the truth is that it’s not impossible – it’s hard work getting out of debt, but it’s not impossible. It will take time and effort to get your finances back on track but that doesn’t mean that it’s unachievable, because that isn’t the case.
Whatever your financial situation, there are steps that you can take to get things back on track and take steps to move forward. It’s not nice feeling out of control when it comes to your finances, but there are steps that you can take to make the process a little easier to manage.
Wondering what steps you can take to get your financial health back on track? Below is a guide to where you should start when it comes to getting your financial health back onto the right path.
Track your monthly spending
When it comes to getting things back on track with your spending, one of the first steps that you need to take is to start tracking your monthly spending. If you don’t know what you’re spending, how can you take back control of your finances?
That’s where getting to grips with how much you’re spending comes into play – if you are going to take back control of your finances you need to know what you are spending and how you are spending it.
In terms of how you can track your spending, there are lots of options to choose from. You could opt to track your spending using an app that links directly to your bank account, such as Plum for instance. These kinds of monitoring apps are a great way to see what you’re spending in real-time and gain a better understanding of your financial health.
While the idea of tracking what you’re spending might not sound all too appealing, once you actually start doing it, it becomes far easier to manage. Once you’ve been tracking what you’re spending for a few weeks, it will become second nature to track (and check) every purchase that you make.
Map out a cost-cutting plan
As part of getting out of the financial rut that you have found yourself in, it’s important that you take the time to map out a cost-cutting plan that will allow you to reduce your spending where possible and put yourself in a better financial position.
You might not realize it, but you might be wasting money on unnecessary purchases, which is where mapping out a cost-cutting plan can come in useful. If you want to work out the steps that you can take to cut costs and reduce your spending, you need to work out where you can cut costs and how.
Knowing how to reduce your spending is not always an easy process, but one of the best places to start is by looking at where you could be overspending, from the amount you spend on your weekly food shop to the luxury items that you treat yourself to. It’s important to look at how you are spending your money and whether every purchase that you’re making is a worthwhile one.
When it comes to cutting costs, it always starts with small, sustainable changes. For instance, let’s say that you shop at an expensive supermarket like Waitrose, instead, you could swap to shopping somewhere a little more affordable, like Aldi or Lidl, to reduce the amount that you are spending each week on groceries.
(Remember, just because products are cheaper, that doesn’t mean that they lack quality or value.)
Reduce your monthly bills
Another way that you can reduce your spending is to think about how you can cut your household bills. Household bills can be exceedingly expensive and can take a big chunk of your monthly funds, so working out how to reduce the amount that you’re spending is a great step to take. Of course, knowing how to do that isn’t always easy, is it?
The first step is to contact your bills suppliers to ask about your options for cheaper tariffs. You might think that this isn’t possible, but you will most likely be pleasantly surprised when you’re offered lower rates and deals, so it’s definitely worth taking the time to contact your suppliers to see what your options are for cutting your costs.
A growing number of homeowners are also choosing to reduce their energy costs by considering alternative sources of heating and running their homes through renewable energy sources. Yes, this kind of change does come with an initial outlay but in the long-term it can save you a lot of money, making it a change that’s worth looking into.
The most popular option seems to be solar power with a solar battery backup to ensure that your home always has plenty of energy as and when it’s needed, and that you’re never left without.
Plus, a bonus of opting to go down this route is that if you have leftover energy that your solar panels have generated and you don’t need it, you can sell it back to the national grid and actually make money from it.
Deal with debts mindfully
Debts can be a total and complete nightmare to deal with. Debts can have a huge impact on your mental health and general wellbeing. Debts often cause a lot of worry and stress, especially when they don’t feel like it is achievable to clear your debts.
The impact on your finances can be significant, as it can mean that you’re having to make large payments each month that you simply can’t afford, and it’s extremely hard. Debt is a big cause of mental health issues because knowing how to get out of debt can seem impossible.
It’s for this reason that this is more debt support now than ever before, as more and more people have found themselves struggling as a result of the pandemic.
The best step to take when it comes to debts is to seek advice. If you’re struggling to deal with your debts, it’s a good idea to seek advice and speak to a financial advisor or a debt specialist – there are also debt and money charities on hand who you can seek free help from.
By speaking to a professional debt advisor, you can gain a clearer insight into what your options are for clearing your debts and what the best approach to take could be.
When it comes to dealing with debt, there are also a number of different money management and debt apps that you can use to make managing your money and monthly debt payments easier. One of the best steps that you can take is to call every company that you owe money to and ask to set up an affordable payment plan.
You may be surprised to find that most companies are happy to help when it comes to affordable repayment plans and are willing to offer you a range of options.
Look at your income
If you are struggling with your finances, it might also be worth looking at your income. Ask yourself: am I earning enough each month? The reason you are struggling might be linked to the amount that you are bringing in each month – perhaps it’s not enough to support your lifestyle.
It’s easy to live beyond your means, and when you do this, it has a serious impact on your finances. That’s why it’s so important to ensure that you aren’t living in a way that costs more than you can afford.
Should you feel that your income just isn’t enough to support you financially and cover your bills, then it might be time to think about some options, such as finding a new job that would potentially pay more, or perhaps finding ways to boost your income on the side, such as through an evening job or starting a side hustle.
There are lots of options for boosting your income, it’s simply a case of knowing what they are and how to utilize them, that’s all.
Cutting costs, paying off debts, and boosting your income isn’t easy, but the truth is that it is possible to do, so if you’re stuck in a financial rut don’t panic because there is a way out. Hopefully, the guide above has given you a few ideas for how you can make getting out of a financial rut a little easier to achieve, as well as how you can get your finances properly back on track for the long term.
