How To Cope With Money Worries: Take Charge and Change Your Life

by Elisa Adams

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The life of a thirty-something nowadays is so very different from when our parents and grandparents were young. We don’t ration or save, we’re frivolous with dining out, and we spend lots of money on technology, transport and holidays. Life is certainly for living, and there is absolutely no way you should ever stop doing the things you enjoy.

However, when we use cards instead of cash, it can sometimes not feel like real money at all.

And it’s only when we check our bank statements and credit card bills that we realise how much we have actually spent. Money worries and not having any savings can cause anxiety, stress, and insomnia. Let’s take a look at some ways you can take charge of your money and change your life.

If It’s Not Too Serious

If your money worries aren’t too serious, you may just need to learn better money management skills. If you can still pay your mortgage/rent and all your important bills, then you are probably no worse than anyone else when it comes to money. But what if you want to save for a two-week holiday in the sun? Or supposes your car and washing machine break down in the same week? Do you have extra funds to cover things like this? If not, then it’s time to start cutting back and saving.

You can try this free budget planner to start you on your way. And as a rule of thumb if you can adopt the 20/5030 rule you may just get on track! This rule means 20% of your monthly salary goes to savings, 50% goes to essentials, and 30% goes to lifestyle habits. Think you can do it?

If It’s Pretty Serious

Your money worries are considered pretty serious if you feel like things are spiralling out of control, and the debt keeps mounting. It can be a vicious circle trying to keep up with paying off debts while trying to stay afloat at the same time. One option to consider at this stage are loans for debt consolidation. This basically means a loan is used to pay off all your existing debts. It is then transferred into one single loan that is more manageable to pay each month.

If you feel like you are getting anxious, stressed and losing sleep over your debts, this may be worth considering. Knowing you only have one lower payment per month is a lot less stressful than juggling six or seven. Do remember that this type of loan is usually secured against your house or assets, so do make sure you can pay each month.

If You Cannot Cope

If you are in so much debt that there is now way out of it, you are at the stage of not being able to cope. At this point, you may want to consider a DRO, an IVA or filing for bankruptcy. A DRO stands for Debt Relief Order. This freezes your debt for a year if you are on a low income and cannot pay. An IVA is an Individual Voluntary Agreement which means you pay back an agreed set amount each month to your creditor over 6/6 years.

Anything that hasn’t been paid off after this time is written off. Filing for bankruptcy means you are cleared of all your debts. However, any assets you have will also be taken away to pay off your debt. All three of these are pretty serious and should only be used as a last resort.

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