The debt collection agency's 5 tips to get a better grip on your personal finances
Many individuals experience financial challenges from time to time; job loss, illness, sudden large expenses or other unforeseen life events can cause a significant change in their financial situation.
At Collectia, we help many people out of debt every single day by professionally guiding and advising on how to settle and structure finances and debt in a good and sensible way.
We are a debt collection company with many years of experience in ensuring good conditions for our clients and their customers who have outstanding debts.
In this article, we give you our 5 best tips to get a better grip on your personal finances.
1. A budget provides an overview
Get an overview of your financial situation: debts, creditors, expenses, income. It may sound simple, but unfortunately for many people it is not.
To get a handle on your personal finances, it is important to create an overview using a budget. Start by listing all your income, expenses and loans - we recommend Excel, for example - where you can easily and quickly correct, delete and add more items along the way.
2. Cut back or gear up
Once you have an overview of your finances - you will have an overview of whether your finances are balanced - i.e. whether you have more income than expenditure - or vice versa.
If you have more expenses than income, you should look at whether there are expenses you can cut or reduce. Maybe cut out streaming services, find cheaper alternatives for housing, food or entertainment, for example.
You also have the option of gearing up, i.e. supplementing your income, perhaps with more shifts at work, a second job or similar.
Often it will be easiest to cut costs - this is where we find that there is often by far the most money to be made.
3. Get a repayment plan for your loans and creditors
If you find yourself in a situation where you have non-performing loans and invoices to creditors - it's a good idea to get a resolution plan.
For many, setting up an installment plan is an almost overwhelming process - but try it anyway - it can often pay off. Defaulted loans and unpaid invoices often come with high interest rates and costs; and not paying them doesn't make them any less so.
Reach out to the companies you owe money to; bank, lenders, debt collectors and have a chat - they are often more than willing to find a solution - even if it's just a few hundred dollars a month.
4. Take action about your situation
Perhaps the best advice for getting your personal finances in order is to take action.
It may sound simple, but it's often the hardest thing to do when finances and profits may not be there.
But whatever you do, not taking active action on your personal finances is perhaps the worst thing that can happen. Because if you don't do anything about your financial situation, your debts and expenses will increase - and neither you, your lenders, creditors or debt collectors want that.
Contact the people you owe money to and start a dialog - even though you may not have the money to settle right now. Many people will understand that your financial situation is bad right now.
5. Seek help if the task is too big
For many people, personal finances can be a difficult topic to handle and to talk about.
If the task is too confusing or too difficult to start - we always recommend that you seek help to sort out your finances; professionally or with friends and family. Maybe you just need help setting up a budget - or advice on who to contact and when?