Are You Living Beyond Your Means?

photo credit: pfala

More Americans than ever are deep in debt and the debt load is growing. The reason this situation exists is because so many live beyond their means. Spending more than you earn means you’re not saving any money, which puts you in a precarious financial situation.

Here are some ways to know if you’ve fallen into this trap and how to get out:

You Have Multiple Credit Cards

If you do everything with your credit cards and cannot pay the bill in full each month, then that is a sign that you are living above your means. If possible, adopt a rule that if you can’t pay for it with cash then you can’t have it. Or, cut your credit cards and start using your debit card instead.

You Struggle To Pay Your Bills
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If you can’t pay the bills without robbing Peter to pay Paul, it’s time to take a serious look at your spending habits. Most people can modify their “outgo” by spending less at the grocery store. Getting a tighter grip on your food budget is one of the fastest ways to create additional cash.

You Have No Budget Whatsoever

While budgeting might be a dirty word to you, it is simply a tool. If you have no budget whatsoever, you may be courting trouble. Consider mapping out a simple budget by first tracking your expenses (write down every dollar you spend and put the amounts into categories) for two months. Then you can adjust your budget. You might be surprised how much you’re mindlessly spending in some categories! If you need budgeting help, check this out.

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