by Lina Martinez

The vast majority of people have been through periods when money was in short supply. If you’re struggling to make ends meet, you’re in debt, or you’re worried about being unable to pay bills and cover rent or a mortgage, there are ways you can survive when the threat of financial troubles looms. Here are some suggestions to take on board.

Carry out a household audit

Have you noticed that it has become increasingly difficult to keep track of spending without checking your banking app on a constant basis? These days, with instant and contactless payments and direct debits set up here, there, and everywhere, it’s very easy to lose sight of where your money goes. If you’re eager to reduce spending, one of the best things you can do is carry out an informal household audit. This will enable you to see how much you’re spending, what you’re spending your money on, and how much cash you’re devoting to luxury items or things you don’t even use. You might not even be aware that you’re still paying for that special offer on wine you signed up to last Christmas or that you’re forking out for a gym membership that works out at a total cost of $300 per visit based on your usage so far. Once you’ve got the results in front of you, you can address issues like wasted resources and overspending in areas where it’s possible to make savings. Cancel the memberships and subscriptions you don’t want anymore and prioritize essential outgoings.

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Start living life according to a budget

Once you’ve seen where your money goes, it’s time to take the next step and start living according to a budget. Budgeting gives you an accurate calculation of how much you can spend, and it can help you to pay off debts, prevent overspending, and take a firmer grip on your finances. You can use apps to track spending, create a monthly spreadsheet or even write down all your outgoings and your income in a notepad. This is a simple strategy that could make a massive difference to your financial situation.

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Face up to debt

Even the word debt is enough to make some people’s hearts race and their palms sweat. Debt is a common issue, but it can have very different implications for different people. If you’re in debt because you’ve taken out a loan or a mortgage, this isn’t necessarily anything to worry about as long as you’re paying off that loan according to the terms of the agreement. Troubles with debt begin when you get in over your head and you amass debts that you can’t pay off. This may mean that you end up owing people or businesses money that you can’t afford to pay or that you default on payments, which mean that your home or your car are at risk. If you’re in serious debt, the sooner you seek advice, the better. It may be possible to take steps to reduce or consolidate your debt before you find yourself in a situation where you need a bankruptcy litigator. Experts can help you prioritize your debts, come to agreements with creditors and lenders, and hopefully, set you on the path to financial recovery.

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Cut costs

When times are tough, the logical response is to cut costs, but it’s not always easy to figure out where you can make cutbacks. Use your household audit to pinpoint areas where you might be overspending or indulging in items, products, creature comforts or services you don’t necessarily need. Cut out luxury items, and try and reduce the bills you can’t get rid of altogether.

Many households spend a small fortune on food, for example. If your grocery bill is too high, there are measures you can employ to bring it down. One of the best ways to prevent overspending is shopping online. When you go to the store, it’s tempting to buy things you don’t need. With aisles packed with neon signs and special offers that are designed to lure us in, it’s easy to fill your cart with stuff that’s not on your list. With online grocery shopping, you make a list, you add those items to your basket, you make your payment, and you choose a delivery slot. There’s no temptation and you’ve got a running total that’s visible on your screen. It’s also a good idea to shop around for the best prices, especially if you’re buying items in bulk. You might find that prices are significantly lower in one store than another.

Another simple way to lower household costs is to compare prices for insurance policies, cell phone contracts, TV and broadband packages, and electricity and gas. You might think you’re getting a great deal, but when was the last time you checked prices from other providers? If you’ve been with the same insurance company for as long as you can remember, you’ve probably renewed your policy several times without even thinking about swapping to other companies. You might assume that your policy is the best value for money or that switching is time-consuming or arduous, but it only takes a couple of minutes to compare prices online, and you might be surprised by the results. If you can save as little as $10 per month on every kind of policy you have, this will free up a substantial sum by the time you reach the end of the year. It’s worth remembering that businesses often go all-out to entice new customers. As an existing client, this means that you might be missing out on the best offers.

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If you’re facing financial difficulties, try not to panic. There are ways to take control of your finances and improve your situation. Figure out where your money is going, don’t ignore debt and hope that it magically fades away, and take advantage of expert advice and help. Draw up a budget, and look for ways to save. Even simple changes like shopping online and switching your insurance or broadband provider could save you a vast amount of money.