Stepping into low financial points in life is not a fun place to be. On one hand, you have monthly outgoings that can pile on top of you, on the other hand, you might have lost your life savings as a result of being a victim of investment fraud. The truth is that money can take control of your life. If you do not take control of your finances with both hands, you lose your capacity to manage money and can hit rock bottom. Rock bottom is different for everyone. For some, it can be as serious as not being able to make rental payments. For others, it can be the loss of savings leading to an unknown future. What stays true for all is that we can overcome financial struggle, and make it out of the most depleting financial situations. In this blog, we will share how you can come out of financial rock bottom and become a more financially stable person. Take a look at the following suggestions:
Have 6 months of statements to hand
For a clear view of how you got to this point, seeing 6 months’ worth of statements can offer some insight as to where your money has gone. Avoiding this step will simply lead you to worsen your situation, so put your pride aside and take a look at what you have spent your money on. Have your bills recently increased without you realising? Have you been sending friends and family money that they have not been able to send back? Grab a highlighter, and categorise spending as non-essential versus essential. Ideally, there should be no more than 20% worth of non-essential spending, and if this is flagging up more, you can use this as a direction to take to avoid spending carelessly again.
Pinpoint all of your streams of income
Once you know where your money has been going, it is time to look forward. How are you going to take control and put your money into the right places? Knowing your exact streams of income is essential for budgeting moving forward. Consider all money that is frequently sent. Do you have a set income each month from your place of work, or does this fluctuate based on hours worked month on month? Figure out the bare minimum you expect to earn MoM, and budget based on the worst-case scenario.
Figure out what assets you have
Consider your assets and liabilities. Assets should ideally be appreciating, and liabilities will be losing you money over time. For example, how long have you been in your home? Depending on the market value of your area, your home may have increased in value by a significant amount. If downsizing is a viable option, you may be able to sell your asset (home) and have available finance to get you on your feet again. A car on finance is an example of a liability. Is your place of work commutable by bike/ public transport? It might be smart to sell your car and use this time to save.
Take control of investments
Investments can often be forgotten about. Perhaps you have a savings ISA or you have placed money into an investment scheme you have not heard anything from. Have an idea of where your money is currently tied up, and make sure it is increasing in value. If you can not log into one of your investment accounts, you may be a victim of an investment scam and therefore require the support of an investment fraud lawyer.
Start to move forwards
Overcoming financial difficulties is a part of life. The key is to take control, have a plan and then move forward. As long as you take educated action, you will only be putting yourself in a better position. Speaking with professionals, such as financial advisors, and investment recovery firms such as WRS is also beneficial to be certain you are taking all necessary precautions.
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