April 24, 2019
7 Signs you’re Living Beyond Your Means and How to Fix Them
1. You're carrying a credit card balance from month-to-month
If you have a high credit card balance and you're paying just the minimum each month, you can end up carrying this balance for years while paying a lot in interest. You might also be tempted to make more purchases on this card since it already has a balance.
Try to make double payments and stop using the card until the debt is paid off.
2. You stress about bills
Monthly bills should be fixed into your budget. You should be able to pay them easily without any stress.
Take a look at your monthly budget and find ways to cut back.
3. You can't save 5% of your monthly income
If you can't put away at least 5% of your monthly income into savings, you're living beyond your means.
Again, trim your expenses and restructure your budget to include at least 5% for savings.
4. You don't have emergency and rainy-day funds
Ideally, you should have an emergency fund to cover major unexpected expenses, and a rainy-day fund for small expenses you can anticipate.
Start building your funds now by putting away as much as you possibly can each month.
5. Your mortgage payment eats up more than 30% of your monthly income
Most financial experts agree that your monthly mortgage payment should not exceed 30% of your take-home pay.
You have two choices here:
6. You lease a car you can't afford to buy or finance
- Find ways to boost income. Seek a raise at your current job, freelance for hire or find another side job for extra cash.
- Scale back your mortgage payments. Consider a refinance. If your mortgage is crippling your budget, consider downsizing to a smaller and cheaper place.
Can you afford to pay for or finance your car? If the answer is no, you're in financial trouble.
Downgrade your vehicle to one you can actually afford or refinance at a lower rate.
7. Your financial decisions are influenced by your friends' spending habits
Thanks to the hyper-sharing culture of social media, the pressure to keep up with the Joneses is stronger than ever. If you find yourself making financial decisions based on your friends' choices, you're likely spending more than you can afford.
Stop looking over your shoulder and keep your eyes on your own life and your own wallet.
If you're in over your head, Cornerstone Credit Union can help. Stop by today and our Financial Service Representative will be happy to guide you out of any financial mess. Visit cornerstonecu.org