We are all seeking to live a certain kind of life, and lifestyle inflation has become a habit that is quickly developed. As much as this discussion has become familiar over the years, it is no surprise that you will find yourself among those who live beyond their means.
It happens to us all. We pull out our credit cards to spend on unnecessary things while debt is taking over us, and we need to consider whether our decisions are realistic.
In fact, in many cases, the repercussions come after we have already spent our monies. Here is the thing, when you spend more than what you are making, you live beyond your means. When you constantly spend money every time an urge hits you, you are living beyond your means.
It is said that there are two ways of progressing financially; by either earning more or spending less than you earn. If you are doing all the above, it might be time to check your spending habits.
I have often purchased on my credit card, and that follows an excuse for it every time. The justification of ‘I’ll pay it off when I get my next paycheck.’ The truth is that time never comes. One reason after the other eventually leads to a lifetime debt situation. Before you realize it, you cannot survive on your job’s income. The end month comes, and you are almost asking for an advance or surviving on borrowed money, hoping it will sustain you until your next pay.
To some people, any slight inconvenience becomes a reason for them to spend. Nowadays, people call it ‘Retail Therapy. Every time we are sad or stressed about something, the cure to our feelings is buying something good for ourselves. Unfortunately, yes, we enjoy the moment out of that temporary solution, but we end up landing into permanent stressful solutions of being in debt.
For things like vacations, you don’t wake up and decide to go. It’s a big item that requires you to save well in advance. Sometimes, it just doesn’t fit our priority list, and it is okay not to afford it now. If no money goes to your savings account, emergency funds, or investments, you are doing it all wrong. If you find yourself a victim of these things, you will likely live beyond your means. With that in mind, how we spend what we can’t afford should be more apparent.
You are living beyond your means if;
- You constantly anticipate your next payday right from the beginning of the month. This alone should be the first sign that you are living beyond your means.
- You are always late with your bills or are constantly extending payment deadlines and dodging your caretakers.
- You sometimes need to find out where your money goes. Without a budget, you are likely to be spending money you can’t account for.
- You have a comparison habit. You always buy the latest things to keep up with other people. If you also have FOMO all the time, a feeling of missing out on something, especially when you can’t afford it.
- When money for fun stuff with friends is available, you neglect the essential expenses. For instance, when you have money to eat out all the time but are always late in paying rent.
- You operate on no emergency fund. In an emergency, such people will always resort to borrowing because they were caught with needs off guard.
- You don’t save. The only way to grow financially is by doing financially beneficial things, e.g., savings and investments.
- Your housing expenses take up more than 28% of your monthly income.
- You don’t have insurance. Many people can afford this, but it’s only a priority once there is an emergency. Even though it’s medical insurance, insurance will help you save on costs that come from emergencies.
- There is no growth. You have a good job and make good money, but your life is stagnant. For example, if you continue living in a rental instead of your own house.
All these are signs that you are living beyond your means. Such habits can only go if we commit to changing our spending and saving habits. It is essential to review your bills and cut unnecessary costs by understanding that, until we make enough, we cannot afford the lifestyle we want.
