Assess your finances, cut unnecessary expenses, and explore ways to boost income. Seek professional advice for debt management. Prioritise well-being through counselling and building an emergency savings fund. Stay committed to your financial plan for a more secure future.
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“Looking for any advice as to how to move forward in life. I ran my own small business for about ten years until earlier this year when stress and financial worry became too much, and I got a reasonably well-paying job. I’m now in a position where my income just covers my living costs, but I have a bunch of debt still to pay with IRD (about 60k) in the form of old GST, income tax, and about 20k in small business loans the government had during Covid. I currently have it set up on arrangement to pay back, which is fine, but it means I still have to keep running my business on the side in order to make those payments, which means several more years of the stress and workload that has caused me so many issues already. In an ideal world, I’d just pack the business up and live with my 9-5 job and spend the rest of my time with my kids, but at this rate, they’ll be leaving home by the time I’ve paid it. It’s also been a huge strain on my marriage, and while I take full responsibility for my poor money management and have no issue with paying it back, I’m really just looking for any ideas or a different approach or anything that might help me get this weight off my shoulders before it consumes me and my family?”
(Original question on Reddit)
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I’m sorry to hear about the challenges you’re facing. It’s great that you’re seeking advice and trying to find a way forward. Here are some steps and suggestions that might help you improve your financial situation and reduce the stress in your life:
Assess Your Finances:
Begin by creating a comprehensive financial overview. Document your monthly income and expenses to understand your current financial position. Examine your debt situation with IRD in detail, including the terms of your repayment plan. Reach out to them to see if there’s any flexibility in your repayment schedule or if you can renegotiate more manageable terms. Additionally, look for ways to boost your income, such as exploring part-time jobs, freelancing, or other side gigs to supplement your 9-5 job’s income.
Cut Unnecessary Expenses:
Take a close look at your spending habits and identify areas where you can cut back. This might involve trimming discretionary expenses, negotiating lower bills, or even considering downsizing your living arrangements if it’s financially viable. Reducing non-essential spending will free up more money to allocate towards your debt repayment and help alleviate financial stress.
Seek Professional Advice:
Contact a financial advisor or accountant who can provide expert guidance tailored to your unique financial situation. They can offer insights into managing your debt effectively exploring options like debt consolidation or refinancing. If your side business is causing undue stress and not generating sufficient income, they can help you explore alternative strategies for managing your debt, potentially involving negotiations with creditors or exploring government assistance programs for small business owners.
Prioritise Well-being:
Dealing with financial stress can be emotionally challenging. Seek counselling or therapy to help manage the emotional toll this situation is taking on you and your family. Simultaneously, establish an emergency savings fund to provide a financial safety net for unexpected expenses. Set long-term financial goals, which could include saving for your children’s education or planning for retirement. It’s crucial to remain committed to your financial plan, exercise patience, and understand that addressing your financial challenges is a gradual process, but it will ultimately lead to a more secure financial future for you and your family.
Hope this helps.
Regards, Clive Fernandes (Financial Adviser)
Director – National Capital
Disclosure: I am the director of National Capital, a KiwiSaver advice firm. The views expressed in this article are the views of the author. The information provided is of a general nature and is not intended to be personalised financial advice. You may seek appropriate financial advice from a Financial Adviser to suit your individual circumstances or contact National Capital.
