Thursday, 22 September 2022

6 Signs You're Living Beyond Your Means

You Exceed Your Budget

You do not have to be a financial expert before you know that you are spending more than you should. For you as an individuals to attain financial freedom of the most common pieces of advice given by most expert is, ‘’live within your means’’ which mean you need to spend less than you earn and at the same time save more as you spend less, to stick to budgets and to know the difference between your needs and wants.

As straightforward as that may sound many people do not make the needed adjustment, they believe that they are living within their means. Everything they have spent their money on can be categorised as needs, so in essence, the expenses can be justified. Living within your means goes beyond justified your expenses and for you to better understand the concept, this article we research some of the signs that imply an individual is living beyond his or her means.

Though the warning signs that you are in over your head are many, they are easy to understand and if you pay attention to them, you won’t stray from a sound financial path for long and if you have already gone astray, you can still find your way back. Known that the first step is to know when you are getting it all wrong.

Many of us when we lose our job, the ideal thing we do is fall back into our emergency fund or savings. This is expected to keep you going for a year or more, however, many people do not have such a fund or savings that can make up for it. When an individual cannot survive financially for up till six months without an income, it is a sign that that person has been living beyond his or her means.

Unable to track your expenses

Another big red flag that you are living beyond your means is when you have no idea about what you do with your money. If you are always broke and you can’t account for your income - i.e. you don’t have a breakdown for how you spent the money and what you spent it on then you are definitely biting more than you can actually chew.

Always in recession

Instead of complaining and lamenting about how tough times have forced you to skip meals or sell off one of your jewellery or gadgets you should first consider the possibility you have.

You do not save enough from your income

You often find it hard to save. There are people who have succeeded in making it s habit to save a certain percentage of their income every month. Many of this people, however, ru out of cash before they receive their next income and turn to their savings even when there is no emergency. According to experts, it is recommended that we save at least 30 per cent of our income. Experts agree that saving below 5 per cent of your income is unacceptable and an indication you may be living beyond your means. If you spent more on your lifestyle, you need to find ways to reduce it.

Spend money we don’t have

Sometimes things can suddenly go bad due to force beyond you but when you often resort to buying thins on credit, it may be an indication that you are living beyond your means. This is more so when you cannot pay off your debts at the agree means. When you spend your savings and spend money you don’t have, buying items on credit and fail to pay for those items at the right time, you are likely to become stuck in debt. Once you get stuck in debts with no guarantee that you can pay it off soon and without credit conflict it is an indication that you are living beyond your means.

Borrow from one loan app to pay for another loan

Instead of avoiding further debt, they ended up borrow more to pay off some of the older debts, which may put them in more serious trouble. This is a clear indication that you are living beyond your means and this further implies that you cannot sustain your lifestyle.

Buy things you don’t need

Many people spend huge amount of money buying just shoes. If each time you buy an item and you say to yourself ‘’I don’t need. Now if you believe all the pieces of advice on this article about saving, budgeting, review your situation and if you are already living beyond your means, then take immediate action.

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