How Do You Know If You Are Living Beyond Your Means?

It is a no brainer that you want to be living within your means, if you are not then you could end up in some real financial trouble.  Some people are not living within their means however, only they do not fully realize it.  Do you know if you are living within your means?  Here are some ways to tell if you are not living within your means.  If you find that you are doing one or more of these things, you may want to consider ways that you can change your habits.
Overdraft2Have you paid an overdraft fee in the last year?  There is really only one reason you overdraw your account; you do not have the money.  There are times when you honestly make a mistake and think you have more than you do, but that still means that you are not living within your means.  You should always avoid overdraft fees; they are a waste of your money.

Do you have credit cards?  Have you exceeded your credit limit?  This is a major red flag that you are living beyond your means and you need to change something.  If you have exceeded your credit limit and an emergency happens and you have no money and you cannot use your credit card, what are you going to do?   Always keep your balance on your credit low you never know what is going to happen.  You do not want to forget the interest you have to pay on those cards either; you end up paying much more then whatever you bought was ever worth.

Another red flag that you are living beyond your means is if you could not live for six months if you lost your income.  Experts have said it time and time again; everyone needs to have an emergency fund with a minimum of six months’ worth of your income in it.  There are some experts that even say you should have a year’s worth of income in your emergency fund.  If you lose your job and have nothing saved, what are you going to do?  Do you have a plan?  There is no guarantee that you can go out and get another job right away.

If you are in debt but still hire someone to do something that you really could do yourself then you are most definitely living beyond your means.  If you are in debt you do not have money to just throw around, and hiring someone to do something that you could do is throwing money around.  When you are in debt you do not spend money on anything that is not a necessity, which means you have to do things for yourself, whether you like it or not.

These are only some of the ways that you can tell if you are living beyond your means.  If you see one that you do you should sit down and figure out a plan on how to change your habits.  If you see one that you know a loved one does you might want to find a way to talk to them about it, after all you are only trying to help them.  Living beyond your means is something no one should do; it will lead to many financial problems.  These are financial problems that will be difficult to get out of; they simply are not worth it.  The sooner you realize that you are not living within your means the sooner you can make changes so that you can get out of financial trouble.