5 Signs You Are Living Beyond Your Means
Let’s face it, it can be really hard to live within your means these days; with credit cards, internet shopping, and a variety of products you can choose to buy, some people find it almost impossible to keep their finances in check. This can quickly get out of hand if you are unable to manage your finances correctly. Here are some signs that you should take a closer look at your bank accounts and learn to keep your wallet in your pocket.
You often find yourself being pressured into spending because of your circle of friends
The Problem: People want to belong to certain groups. Sometimes you have to go out and attend social gatherings to maintain your relationships with these groups. These people will surely invite you to join them when they go out to have fun. Whether it’s your friends, family, or significant other, you will have to spend some money when you socialize with them.
What You Can Do: While it is okay to have fun with other people once in a while, remember to always take into account your finances before you decide to hit the club or the fancy new restaurant down the street. Know how much money you have and if you can afford to spend it before you tell your friends that you will join them for a few drinks or dinner. You also need to take into consideration the fact that you and your friends might have very different ideas about what is expensive and what is affordable. Let your friends know if you cannot afford to go to expensive places with them. They will surely understand, after all, they are your friends. Do not let your fear of missing out force you to spend your hard-earned money.
You notice that you always carry a balance on your credit card
The Problem: Most adults already have a credit card they can use to pay for things instead of bringing out cash. Credit cards aren’t necessarily bad because they are easier to carry than cash. Financial problems do not happen because a person has a credit card, they happen because the person with the card does not know how to use it properly and responsibly. Constantly purchasing things with your credit card is one sure fire way to get yourself into a lot of debt. The incentives that credit card companies offer do not make it any easier; with all the rewards points and savings, it can become very difficult not to use your card.
What you can do: If you find that you have a huge credit card balance at the end of every month, a balance that you cannot afford to pay, then maybe it’s time to cut up that card and switch to cash. Start spending less so that you can slowly pay off the balance. And also start bringing cash instead of the plastic card that got you into this mess in the first place. Make an effort to slowly start paying off your credit card debt.
You are not saving money
The Problem: Saving money is one of the most important financial concepts that any responsible person should know. It is important to have some savings for tougher times. Medical emergencies and sudden financial problems can deal a huge blow to your bank statement. Savings will help you adjust to hard times while maintaining a reasonable lifestyle. Six to nine months of savings for expenses such as electricity and food are basic to maintain financial stability. If you find that you cannot save at least five percent of your income at the end of each month, you might be living well beyond your means.
What You Can Do: Start focusing more on saving so that you can build up for the future. Spending less each month on unnecessary things is the first step you can take in the right direction. Think about what services and products you do not need and cut them out of your monthly expenses. You money is better off in the bank than spent on something you do not need.
You are leasing a car that is too expensive for you
The Problem: Cars are a very big investment for any adult. They can help you get you work on time and give you a vehicle you can use to travel with your family. While it is a good idea to get a car lease, remember that some car leases are just downright ridiculous and unreasonable. Some people will lease the newest Jaguar when what they really need and can afford is a Prius. Do not lease a car you cannot afford. You do not need a luxury car to get to work every day.
What You Can Do: The answer to this problem is pretty simple: Do not get a lease on a car if you do not have enough money. Think about your current financial situation and ask yourself if getting a car is a good idea. Better yet, ask yourself if you even really need a car of your own. Many cities have great public transportation systems that are a good alternative to owning your own vehicle. This is also good because you can help cut carbon emissions and save the environment.
You are always borrowing money
The Problem: Sometimes you really have to borrow money. Emergencies can happen that would require you to get some quick cash from a relative or close friend. Understandably, asking for a loan is unavoidable in certain kinds of situations. But asking for loans for things you do not need can create big problems for you. It can also be annoying to other people; they might even try to dodge your texts and calls to avoid giving you money. It is never good to be in a ridiculous amount of debt for trivial things that you do not need.
What You Can Do: Be honest with yourself and live within your means. You do not want to trouble other people just so you can try and live a lifestyle that you cannot afford. What makes irresponsibly asking for loans worse is the fact that it also affects other people. Talk to your friends and family if you really need some quick money for important things, not for buying the latest gadgets or eating at expensive restaurants. Be responsible when you ask for loans from other people because you might even damage the relationship if you repeatedly ask for loans.
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