6 Effective Ways To Dig Yourself Out of a Financial Hole

Financial Hole

Being stuck in a financial hole is not a fun place to be and it can be hard to dig your way back out. Your bank balance might be collapsing under a mountain of debt, or you simply lack the cash flow or money management to get back on top of things.

In this article, we’ll cover some handy and timely tips to help you manage your finances, improve your cash flow, and claw your way back into the financial sunshine.

#1 – Keep the Plastic In Your Pocket

When money is tight, pulling out that credit card to pay for things is a very tempting and all-too-easy option. If used sparingly and only for emergencies, credit cards can prove very handy, but problems arise when you overuse credit beyond the point where you can pay out the balance in full every month. From that point on the balance is attracting big interest that compounds every single month that a balance remains.

If you have more than one card and continually rack up credit on all your cards, very soon the monthly repayments are going to be consuming a large portion of your income and could quickly become unmanageable.

#2 – Debt Consolidation Is a Positive Step

This point ties in nicely with the point above. One way to reduce your monthly repayments at least is to combine all your credit card debt into one manageable debt. This could be achieved by taking out a Personal Loan and transferring all your card debt to it. This will most likely reduce your overall interest, as well as having only one monthly payment to make on the loan. If you spread the loan out over several years, you can effectively halve the amount of money you were making in repayments on all those cards.

Debt consolidation is a financial strategy that’s become increasingly popular and well worth looking into if you find yourself drowning in debt and struggling to make the repayments. With a good debt consolidation strategy, refinancing could even help you pay a 200k student loan debt faster.

#3 – Create a Budget and Don’t Deviate From It

Whenever you find yourself struggling financially, it could be the result of poor money management. One of the most effective ways to keep an eye on your money and manage it better is to formulate a budget.

Your budget must be viable and reasonable, otherwise, it’ll be too hard to stick to and keep your finances in check. A good idea is to simply divide it into two parts; one for essential spending, such as your bills, and the second section for non-essential expenditure. Whenever your cash flow suffers a dent for any reason, you can simply cut out spending on the non-essential items for a while until your finances are back on track.

Budgets are one of the most basic, yet incredibly effective money management techniques you can employ.

#4 – A Short-Term Loan Could Set You Up Long-Term

Short-term loans are something you usually won’t find with the banks. We’re talking about repayment terms of up to 3 months. One of the easiest and best ways to secure a short-term loan is with a Pawn Loan through a private finance lender.

Australia has quite a few lenders that offer Pawn Loans. Just search online to find one near you. As an example, if you’re living in the capital of NSW, just search for a Pawn Loan Sydney firm and you’ll discover a few you can try.

Why is an instant Pawn Loan a good idea for your finances?

If you have a money-making idea but don’t have the cash to get it started, you have the option of putting your car or another item of value up as security to secure a pawn loan, virtually on the same day. This will give you the capital you need to launch your money-making venture.

#5 – Learn Where You Waste Money

We all do it and often it’s not usually a problem. It does become an issue if your money is running low and you need to tighten your belt.

To stop the money leaks and bolster your finances when you’re in a tight spot, you need to focus on where the money is being wasted daily, weekly, or monthly. A few dollars here and there can add up substantially over an entire month and you may be surprised to discover that you’re leaking hundreds of dollars in unnecessary spending.

#6 – Save a Portion Of Your Income

Even if it’s just 5% or 10% of your income, this can build up into a sizable sum that can be utilised in an emergency, or even be used to jump on a hot business opportunity the moment one presents itself.

Either way, you’ll enjoy peace of mind knowing you have some savings in hand as a backup when you need it most.