5 Ways You're Living Beyond Your Means
Put it on the card! We love to say those words until we realize our credit card is maxed out and we’re in serious debt. You begin to stress about paying off your bills and your credit card interest is piling up. If this explains your life, you may be living beyond your means and you need to make some serious changes. Below are ways you can solve that!
1. YOU PAY THE MINIMUM ON YOUR CREDIT CARDS
Do you have multiple credit cards, and only pay the minimum balance each month? You may think you’re paying them off, but this only accumulates more interest! To keep this from happening, pay a little extra. Let’s say you used to pay $20/month on the card, try paying $50 or more and pay it before the interest rate hits. Paying before the interest rate helps you decrease your debt! Check out our Two Ways to Pay Off Debt blog to find out what works for you.
2. YOU WORRY ABOUT PAYING YOUR BILLS
If you stress about paying your bills and lose sleep over this, you need to take a day to create and stick to a budget. Think about what you don’t need and really cut back. That Chick-fil-A breakfast meal and that Starbucks coffee every day is taking a toll on your wallet! Cutting back on the little things can really help ease the stress about paying bills. Your bank account and your mental health will thank you later.
3. YOU’RE NOT SAVING ENOUGH MONEY
Experts recommend saving 20% of your monthly income into a savings account that will be used for your retirement or other emergencies. At the very least you should save 5% of your monthly income. If you can’t do this, or you’re just not saving, you need to consider cutting back costs and start putting money aside for your retirement or other emergencies.
4. YOU LACK AN EMERGENCY FUND
As stated in number 3, you need to set money aside for emergencies. An emergency fund gives you piece of mind when you have a medical or family emergency. Unexpected expenses like roof damage need their own fund too. Put aside 5% of your income into these funds to have a little extra money for emergencies. You will thank yourself later for doing this.
5. YOUR MORTGAGE IS TOO EXPENSIVE
If your mortgage eats up 30% of your monthly income, you may be living beyond your means. You can ask for a pay raise or pick up another job to help it off, but if you can't, consider a refinance of your home. (Check out our Mortgage Loans to help you.) If you are still struggling to pay off that mortgage, you might want to consider moving to a more affordable home. You should not be paying more than you can afford!
We all want to have expensive, high quality things in life, but sometimes we just can’t afford it. We have to think about how much we’re earning each month and spend our money accordingly. Being financially stable and money conscious is better than living a life you simply cannot afford.