Struggling to Pay Bills This Month? Kiwi Finance Expert Shares Smart Steps to Take Now
Life throws curveballs. Unexpected expenses, job losses, or simply rising costs of living can all lead to a situation where you're struggling to meet your financial obligations. It's a stressful experience, but acknowledging the problem is the first step towards finding a solution. The key is to act proactively and avoid letting things spiral out of control.
Before you can tackle the problem, you need a clear picture of your finances. Gather all your bills, bank statements, and any other relevant documents. List out all your income sources and all your expenses. Be honest with yourself – include everything, even the small things. This exercise will reveal exactly how much you're short and which bills are most pressing.
Not all bills are created equal. Some have more serious consequences if left unpaid. Prioritise your bills in the following order:
- Secured Debts: These are debts backed by an asset, like your mortgage or car loan. Failing to pay these could lead to repossession.
- Essential Bills: Electricity, gas, water, and internet are essential for daily living.
- Rent or Mortgage: Keeping a roof over your head is paramount.
- Healthcare Costs: Ignoring medical bills can lead to significant problems down the line.
- Unsecured Debts: Credit card debt, personal loans, and store credit cards should be addressed after the more critical bills are covered.
Don't bury your head in the sand! Contact your creditors as soon as you realise you're struggling. Explain your situation honestly and ask about options like hardship variations, payment plans, or temporary suspensions. Many creditors are willing to work with you to find a solution, especially if you're proactive.
Look for areas where you can reduce your spending. Cancel unnecessary subscriptions, eat in more often, and cut back on discretionary expenses like entertainment. Every little bit helps!
There are resources available to help New Zealanders facing financial hardship. Consider contacting:
- Work and Income: They may be able to provide financial assistance or advice.
- Community Trust: Some trusts offer grants or financial support to eligible individuals.
- Financial Mentors: A financial mentor can help you develop a budget, manage your debt, and improve your financial literacy.
- Citizen's Advice Bureau: They provide free and confidential advice on a range of issues, including debt management.
Dealing with financial difficulties is tough, but it's also an opportunity to learn and grow. Once you've weathered this storm, focus on building a more secure financial future. Create a budget, save regularly, and avoid accumulating unnecessary debt. Remember, you're not alone, and with the right steps, you can regain control of your finances.
