21 tips to avoid financial problems in 2021

2020 was an eventful year. Quite a few people faced financial difficulties. We will also face various challenges in 2021. That’s why we want to arm you against financial problems. With these 21 tips you can handle 2021 financially.

1. Take responsibility

In order to (further) prevent money problems, you must first dare to take responsibility. Be honest with yourself and face your financial challenges. Be ready to all your cards on the table.

2. Look at your income and expenses

Make a list of your income and expenses. What amount do you spend on rent or your mortgage each month? How much do you pay for utilities, such as gas, water and electricity? What do your insurance policies cost? How much do you spend on your car or public transportation? What do you spend on food and restaurant visits? Do you often buy new clothes or shoes? Do you regularly go on z city trip or do you enjoy traveling abroad? Do you have certain subscriptions or recurring costs? Include everything in your overview. Even the small expenses, such as a lottery ticket or coffee.

3. Adjust your spending pattern

Now that you have a complete overview of your income and expenses, you can adjust your spending pattern in a targeted manner. For example, consider whether you are actually using all of your TV subscriptions. How often do you watch Netflix, Disney+, Prime Video or Streamz? How much money do you usually spend on quick lunches or take-away coffee? Such relatively small expenses can add up quickly. See what you spend the most money on and think about how you can adjust these expenses.

4. Start a budget

Divide your expenses into different categories and draw up a budget for it. You can easily keep track of this budget in a budget planner, Excel file or useful app. Just think about Money Lover, Spendee or Moneon.

5. Put aside money on a monthly basis.

It is best to save money all year round. Provide a fixed budget for this and stick to it. Try not to haggle on these savings. Only use it when you need to make an un unexpected major expense, such as a new washing machine or a repair to your car. Are you starting to save? First start with your emergency fund. This emergency fund should make it possible for you to bridge three months without income. Has your emergency fund been topped up? Then you can start saving with a specific goal in mind, such as a long journey or a new car.

6. A tidy administration prevents additional surcharges

Keep your administration tidy at all times. Do not hide letters or bills, but keep a record of everything in your budget overview. Do you receive an invoice? Pay it immediately and clearly note how much you have maid to whom. This prevents you from paying a bill twice or from being charged extra for late payment.

7. Direct debit for fixed costs

Make it easy and set up automatic payments for fixed costs, such as you mortgage or rent. This way you always pay your bills on time.

8. A shopping budget per week or month

Now that we increasingly pay with bank card or app, we often do not realize how quickly we spend money. Does that sound recognizable? Put your shopping budget in your wallet or open a separate account for this. Always check your remaining balance before you go to the checkout. This way you will pay more attention to what you spend and raise the alarm more quickly. Do you opt for a weekly budget? Then you stay focused. Do you opt for a monthly budget? Then you can save money by purchasing cheaper family packaging. Try it out and find out what is most convenient for you.

9. Avoid credit cards or extension of payment

Try to avoid purchases with a credit card or on installment. Only spend money that you actually have at the time. A small extra cost is added with every payment.

10. Does this product make your life better?

In 2018, 5% of the population suffered from a purchasing addiction. Not surprising when you know that we are constantly bombarded with advertising on social media and targeted only advertising. Always ask yourself whether you really need the product. Is it going to effectively improve your life? Why not sleep on it? Don’t take a hasty decision! Webshops are often using scarcity techniques to increase their sales. They make you believe there is only 1 sweater available in your size or tell you that 3 other people are currently viewing the same product. However, is that true? Don’t get caught and take time to make your decision.

11. No spend challenge

More and more people are aware of the constant stream of advertising that overwhelms us every day. Not only through advertising in the streets, but also through radio and television. Online advertisers can also bombard us with highly personalized advertising. That is why it can be a relief to take part in a ‘no spend challenge’ with a few people in your environment.

How does it work? During a no spend challenge you work with three day types: a day on which you didn’t buy anything, a day on which you have made a planned expenditure (rent or food) or a day on which you bought something on a whim, such as new clothes or a new video game. You decide how long you want to take on this challenge, but is will certainly ensure that you are more aware of your spending pattern.

12. Buy eco-conscious: locally or secondhand

Have you already seen the hashtag eco-conscious on social media? Do you know your ecological footprint? Conscious buying is a new trend and can benefit your budget. For example, buy local vegetables at the market or buy toys and clothes in a secondhand store. The quest is half the fun.

13. Dare to cut back

Is your income falling? Then adjust your spending pattern. Cutting back is not easy, but dare to take that step! It can bring you many benefits in the long term. For example, postpone that major planned expense for a few months or shrink your fun budget a bit.

14. Unemployed?

Unfortunately, the corona crisis has proven that our job security is not always that strong. Do not wait until you are unemployed, but pay attention to the warning signs. Are suppliers no longer being paid on time? Are colleagues not being replaced or are jobs being cut? Are your wages paid too late? Proactively look for a plan B when your company gets into difficult waters. Does your dismissal happen unexpectedly? Then apply for your unemployment allowance right away.

15. Avoid the build-up of debt

Are you almost debt free? Then hang on and do not make new debts. After all, small debts add up to a large amount. Never spend more than you can afford.

16. Discuss your debts

A lot of people are ashamed of their debts, but there’s no need for that. Anyone can get into financial trouble. All that matters is how you handle your debts. Therefore, discuss your debts honestly. Only then you can find a realistic solution. In addition, this can explain your behavior to your environment and you can count on more understanding and support.

17. Start paying your debts

The sooner you start paying, the less additional costs on top of the original invoice the creditor will charge. For example, you can avoid high legal costs and save a lot of costs. So, start paying off your debts in time before a realistic payment plan becomes unfeasible.

18. Talk to the judicial officer

Did you receive a letter or email from a judicial officer? Then don’t ignore it. Contact the judicial officer as soon as possible.

  • Is it about a forgotten invoice? Pay it as soon as possible. This way you avoid extra costs on top of the original invoice.
  • Are you currently unable to pay the invoice? Ask for a payment plan, because the judicial officer will be happy to mediate between you and your creditor to find a good solution.
  • Do you disagree with the letter form the judicial officer? Don’t throw that letter away, but take action. It is important to dispute the contents of the letter with the judicial officer as quickly as possible. Do this in writing by letter or email.

If you do not respond to the correspondence of the judicial officer, he will eventually be forced to start legal proceedings. Once your file passes the court, it will cost you a lot of money. So, take timely action.

19. The PCSW (OCMW in Flanders, CPAS in Wallonia) can help you

Are you experiencing financial problems? Could you use some help? You can contact you local PCSW for budget management, debt mediation or collective debt settlement.

20. Structural financial problems? Contact One

Do you have several debts with different creditors, but you do not know where to go for help? One is a digital communication and mediation platform on which Belgian PCSWs and judicial officers are active. One will work with you to find the best solution. The target? Reduce your debts. Depending on your situation One also guides you to the right assistance.  Register with One today or contact us at info@modero-one.be.

21.Ask for help

Doing nothing doesn’t get you anywhere. It only makes your financial problems worse. Therefore, never be too proud you ask for help. Anyone can get into financial problems. It’s nothing to be ashamed of. In addition, many organizations are at your service. We have already listed 15 helplines for you.

 

All judicial officers and employees of Modero know that everyone has to face a financial challenge from time to time. Do not hesitate to contact us. We are happy to listen to your situation, so what we can find a suitable payment solution together with you. Modero is always available with professional advice.