Money worries, your mood and health
Unfortunately financial difficulties can inevitably affect your mood and general health, but often, they can be avoided.
Money worries are common in today's world. A lot of us have become compulsive shoppers, and for some of us, material wealth has become an obsession. An uncertain job market and easily available credit greatly contribute to the problem.
Many of us buy what we want without actually having enough money to pay for it.
We use credit cards, store cards, take loans, sign up to buy now pay later deals, and when you add them all together, there's often not enough money left at the end of the month! When we can't afford to keep up with all the repayments, we sink into debt.
Once you are in debt, it is easy for it to spiral out of control, so it's much better to try to avoid this situation from the start.
One area where bad planning can cause serious debt problems is with young couples at the start of their adventure of setting up home and living together.
Commonly, they total their combined incomes, deduct general living expenses, then use what is left over to calculate the size of mortgage repayments, or the amount of rent they can afford.
Often, employment security, the arrival of children and other unforeseen expenses are overlooked.
If any of these situations arise, a catastrophic debt problem is inevitable, and this puts an immense strain on the relationship which sometimes culminates in the couple needlessly breaking up and losing everything. Unfortunately this is the result of the "want it now" mentality taking over practical reasoning.
If you are about to embark on this adventure on your own or with your partner, you have to be realistic.
You have the rest of your life to acquire the things you desire, and it's more fun doing this in stages when you can afford them. Plan for any potential situations which could affect your finances in the future, and allow financial margins to accomodate them.
Go for a mortgage or rental agreement that you can comfortably afford, then you can expand later.
If you ignore these simple rules, the house and furniture that you invested your hard earned money into, could be taken away from you altogether, with no refunds.
You also risk destroying an otherwise good relationship, which no amount of money or material possessions will replace.
The mantra of modern money management seems to be buy now pay later, but to avoid debt, I would prefer, pay now, or buy later.
Here's a simple and obvious formula, but it makes perfect sense. The money going out must be less than, or equal to, the money coming in.
In managing your money, the first thing to do is prioritise everything that has to be paid out, then calculate how much is left over.
Health and mood warning! Most people tend to underestimate their outgoings so be as realistic as possible!So, make a list of all the things you have to pay for such as:
- Rent or Mortgage
- Home insurance
- Service charges (community charge)
- Petrol / train or bus fares
- Utilities (electric / water / gas)
- Phone charges
- Car maintenance (Road tax, mot etc)
- Any other payments such as credit card payments, loans etc.
Now total your outgoings and deduct them from your income.
If you have some money left over you can then plan whether to save it up or have a treat.
If you have little or no money left over, then you have to look at ways of economising or earning more money.
If you have a negative balance (the money you have to pay out is more than the money you earn) then you must consider your options to solve your money problems. Don't panic! There's lots of help available and you can find a way forward.
Making the most of your money
There are lots of ways to save money and it can be very satisfying to be thrifty especially if you're short of cash.
You must forget what you'd like to buy, and focus on what you need to buy, and what you can afford.
- Make a shopping list and stick to it.
- Look for genuine bargains when you're shopping. Loss leaders are products at a low price for a short time to attract customers in the hope that once they're in the shop they will be tempted to buy a lot more.
- Only buy what you need, even if it's on offer. Don't buy it because it seems a bargain, buy it because you need it.
- Know where the reduced section is and know when each shop you visit reduces products. (Many supermarkets reduce food items at a certain time of day, near to closing time).
- Buy fresh food, it's cheaper and healthier than ready made meals.
- Don't buy anything that you can't store because you'll probably end up throwing it away.
Try not to waste anything. Use leftovers to make another meal.
- Use cash to pay, it hurts your pocket more than plastic! You could just withdraw what you need each week. That way it's much easier to keep track of what you're spending.
- Buy clothes from charity shops. Not only are you saving money, you are helping good causes.
- Look for free furniture online that people don't want, or things that people are throwing away (freecycling sites). You could be surprised at what people discard.
Don't be tempted into taking third party loans to pay your debts.
Think about it..........these loan companies charge interest for doing this.
As an example, you borrow 400 of your currency, with repayment fees you pay back 480 of your currency.........you are now deeper in debt.
If you were short of cash in the first place, why borrow more? Worst of all........you don`t get anything back for the interest you were charged, well not in a materialistic sense.If you have to borrow money, do it from someone reputable and shop around for the best rate first!
Before you sign anything make sure you know the interest rate and how much you will have to pay back altogether.
Remember that if you owe money there is no way you can borrow more money and be richer, so anyone who promises that borrowing money will solve your problems is misleading you.
You may have more money each month, but that's because your total debt has been spread over a longer period, so in effect, you will be paying back more in the long run!
Anyone who tells you they'll lend you money, when no one else will, usually charges a fortune for the privilege, so beware! People who lend money do it for profit, and some can be unscrupulous.
Don't get caught out!
There are many companies advertising quick loans to "tide you over" a cash flow problem, but many of these charge extortionately high interest rates. There have been many publicised cases of people who didn't pay back the original loan within the agreed time period, and ended up owing large amounts of money because of the escalating interest rate. A small loan can seem like the perfect answer, but if it ends up costing you ten times more than you borrowed then you'll wish you'd never had it.
If it sounds too good to be true, then it usually is!
If you are in debt, there's lots of friendly help and advice available to you, so don't despair!