Regaining Control of Your Finances in 4 Steps

When you have lots of bills to pay and are short on money, it’s easy to feel as if you are powerless. While this situation is not ideal, by taking the following steps, you can regain control of your finances.

Understand Your Commitments

First, make a list of all your financial obligations for the month. These include your heating, electricity and water bills, as well as your rent and payments on your installment loans Canada. Organize these bills according to their cost and due date.

Review Your Available Assets

Once you know who you have to pay and how much you owe them, look at your available assets. Add the values of your savings and checking accounts as well as any other bank accounts you have. If you have a credit card, find out how much credit you are allowed. Keep in mind that in difficult circumstances, you can sell your valuable items.

Prioritize Your Bills

Ideally, you would pay all of your bills on time. However, this is not always possible. Decide which of your bills must be paid on time and which ones can be slightly delayed. For example, if your landlord will evict you immediately for late rent payments, then you must pay that bill immediately. If you have a ten-day grace period on your water bill, though, then you can pay that one late in favor of keeping up with your rent. Make sure that you keep track of late bills and any fees associated with them.

Reassess Your Budget

Sometimes, you have atypical months during which you spend much more than usual. Still, if you have trouble paying your bills every month, it’s time to reassess your budget. Consider which unnecessary expenses you should cut, such as takeout dinners and streaming service subscriptions. Reduce your travel expenses by carpooling or taking public transportation. Lower your clothing budget by shopping in thrift stores and repairing your own clothes. In especially challenging circumstances, you may need to relocate to an area closer to your work or downsize to a cheaper apartment.

When your bills far outbalance your income, you need to take time to reevaluate your finances. By looking seriously at how much you owe versus how much you have, you can decide which bills to prioritize. Then, once you’ve met your expenses for the month, decide if you need to make long-term changes to prevent this situation’s recurrence.