Ten Signs You Are Living Beyond Your Means
Category: General
Nowadays most people are trying to improve their personal finances. Some
people cut out unnecessary expenses, while others seek for some ways to
increase their income.
Living within your means actually makes good financial sense to be debt
free.Check out these warning signs you are living beyond your means and start
making some financial changes in your life right now.
1. You can’t pay bills on time
If you forget to pay your bills, it’s one thing. But, if you don’t have enough
money to pay bills on time, you are overextended. Examining your spending
habits and adjusting them can solve this problem. Perhaps, you can’t afford
regular massages or weekly salon visits. So think it over.
2. Lack of a financial cushion
If you don’t have any savings account, it is one of the warning signs that you
are living beyond your means. Money in the bank will support you after a job
loss, a sickness and another emergency. When you live beyond your means, you
spend all your money and you don’t think about saving them. Try to break this
habit and you will free up money for a financial cushion. Eat out less, shop
less and vacation less.
3. You’re constantly borrowing money
know that you’ll ask for money. If your current income can’t support your lifestyle and you are always borrowing money, you are living beyond your means.
Don’t think that the late payments are the only cause of poor credit. Too much consumer debt also affects your credit score. Even if you pay the bills on time monthly, your credit score never increases. So think of paying off your debt. Don’t rely on your credit cards since it can cause high credit card debt.
Using your credit card to pay off your basic bills such as utilities or other credit cards’ bills is a red flag. And transferring balances from one card to another is also a warning sign of living beyond your means because you are not paying anything down. 8. You only pay the minimum payment If you only pay the minimum payment every month, its’ one of the biggest sign you are living beyond your means. Paying the minimum won’t help you pay off your debt and you will be paying more in interest, and this can only add to the problem.
Does your best friend shop and vacation often? Do you try to keep up with her lifestyle? If so, you are probably living beyond your means. There is nothing wrong with a little fun, of course, if you can afford this fun.
Many people are guilty of this. If you really want to buy something, try to budget for it. Don’t just buy it. You should always remind yourself that if you can’t pay for it with cash, you shouldn’t purchase it.
8. You spend more than 25% of your income on eating out each month
Do you know how much money you spend on eating out each month? If you spend more than 25% of your paycheck on eating out monthly, you are definitely living beyond your means. You might have a super busy schedule, but it doesn’t mean that you can’t cook at home. There are lots of healthy snacks and meals which are quick and easy to make at home. Meal planning can save you a lot of money.
9. You are saving less than 10% of your income for retirement
If you have not been saving at least 10% of your paycheck for retirement each month since age 25, that’s a red flag. Saving for retirement is among the most important things everyone has to do. Even if you are in your 20s, you need to start saving. The earlier you start saving for retirement the less you’ll need to put aside monthly to achieve your retirement savings goals.
10. You don’t have a budget
Finally, if you don’t have a written budget, you have a high chance of overspending your money and living beyond your means. A written budget shows if you’re spending more or less than you can afford. Start a budget now and you will see how much money you are actually spending and how much money you can save each month. This will help you live within your means without debts. If you have credit cards, make sure you keep track of the money spent with them too.
Living within your means is restrictive, but you can enjoy financial happiness and peace of mind. Are you living beyond your means? What are you going to do to change the situation?
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