10 Telling Signs You Are Living Beyond Your Means. With festive approaching a lot of people will be spending more money than on any other month. Some people though, even go overboard on normal months. Here are 10 telling signs that you are spending more than you earn.
1. You Run Out of Money Before Pay Day
You “float” your lifestyle on your credit card until you get paid. You need to make your lifestyle fit your paycheck or do something to get a paycheck that will fit your lifestyle.
2. You Spend Your Salary Right Away
The difference between someone who is smart with their money and someone who isn’t, is what they do with their salary once they get it. If your first inclination is to spend your check on a want versus a need, then it’s a sign of a larger issue. Shopping may bring short-term happiness, but in the long-term, it’s a fast way of staying broke.
3. You Pay Too Much for Your Mortgage or Rent
Many times, we bite off more than we can chew, which can put us in some financial hurt. For housing, just because a bank gives you a loan or says you can afford this much more, doesn’t mean you should do it. You need to be proactive and do some math yourself.
4. Your Bills are Spiraling Out of Control
Buying on credit and paying by installment has become a national pastime. It’s much easier to buy a new flat-screen TV when the salesman breaks down the price in monthly installments. If your monthly income is being sliced and diced to pay for dozens of unnecessary installment purchases and services, you are likely in over your head.
5. You’re Trying to Keep Up With The Joneses
You’ve probably heard the phrase, “Keeping up with the Joneses” before. If not, it simply means what your friends, family, colleagues, or neighbors have, you try to match or surpass them. Many people feel the need to keep up with what their friends are doing and buying.
6. You Spend On Things You Can Do Yourself
Yes it is great to have professionally manicured nails and a clean house that you didn’t have to clean. But luxuries like these when you really cannot afford them is just not a good idea. Do these things yourself and put that money into savings or paying down your debt.
7. You Count Your Chicks Before They Hatch
Do you plan your finances based on the money you’ll probably have soon or bonuses you should get? Bear in mind that jobs can be lost, raises and promotions can be delayed, and refund checks can be substantially lower than what you might’ve thought. If it’s not in your hand or your bank account, then it’s not yours. Only count your money when you have it.
8. You Don’t Have a Written Budget
Having a written budget is one of the most important steps towards financial freedom. If you make budgeting a priority, you’ll have a much higher chance of winning with money.
9. You Have No Emergency Fund
If you can’t afford to save enough money to build up a fund of at least six months of your spending needs in case of a job loss, then you are living beyond your means and need to cut back and get the emergency fund set up.
10. You’re Not Saving at Least 5%
Everyone should save 10 to 15 percent of their total income. But if you can’t save at least 5 percent, even while paying off debt, this could be a sign that you’re living beyond your means. If you cut back each month and don’t go out to eat, or to the movies, or whatever it takes for you to spend less, you will have more money to save.