In this day and age, living beyond your means is so easy. Most people are paralyzed by fear of not being cool or not fitting in. Hence, they resort to spending more money than they make just to be ‘accepted’ by the society. Apparently, this has become the norm among young adults.
Credit cards also encourage people to overspend. After all, it’s just swiping a piece of card and off you go.
However, it’s not only millennials that tend to live beyond their needs. There are so many people out there who probably don’t know they are living beyond their needs. Here’s how to find out.
Not saving any money
If you cannot save at least 5 or 10 percent of your gross income every month, you are living beyond your means. Not having an emergency fund set aside also speaks volumes about your spending. Try to cut down on your expenditures and impulse buying. Set a budget and stick to it.
Paying more than 30% of rent
Your rent or mortgage should not exceed more than 30 percent of your income. If it does, you are living a lie. As much as you wish to live in a modern classic apartment, if it surpasses that mark, it’s time to re-evaluate your life choices.
Struggling to pay bills
If you find yourself falling behind on your bills every month, you are definitely over-stretched. Cut unnecessary costs to make your situation more manageable.
Bad credit score
If you are always paying your bills late, bad credit score is inevitable. Further, overspending with credit cards can lower your credit score as it indicates poor credit management. This is more than enough proof you are living on the edge.
Struggling to sustain your lifestyle
Having difficulties financing your lifestyle is a clear indication you are living beyond your means. If for example, you take out a loan for vacation or loan to upgrade your car wheels or to finance your drinking escapades with friends –it means you can’t sustain the kind of lifestyle you want and you’re putting too much pressure on yourself.
It’s never too late to turn things around.