These days it’s really easy to pick up your credit card and pay for things even when you don’t actually have the money to spend.
It’s no surprise that a lot of people are living beyond their means.
I like to call it a microwave society where we want everything as quickly as possible without having to wait for it.
I don’t know, perhaps it’s just me being old fashioned but it seems to me that there is not as much value placed on something that you can get your hands on quickly without having to wait for it.
If we are being honest with ourselves most of us live beyond our means in some way. That doesn’t necessarily mean that you own a credit card that you use from time to time.
There are lots of ways that you can live beyond your means without even realising it.
I’m going to lay down 8 warning signs that you should be on the lookout for that means you are living beyond your means.
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8 Warning Signs You Are Living Beyond Your Means
1. You Mentally Spend Money Before You Actually Have It
Hands up if you have ever spent money that you expect to receive before you even have it? I know we’ve all been there at some point in time. You get a letter stating that you will be receiving some tax back so immediately you plan all the fun things you can do with this “extra” cash and even spend it.
Well, it’s not really extra cash if you have spiralling debt.
It’s a dangerous game to play because firstly until you have that money in your hands it’s not here and it’s not yours and secondly anything could happen between someone telling you that you will receive it and actually getting it.
I remember some time ago when we sold one of our houses I was told that I had overpaid some fees and that I was due some money back. I was super excited. I dreamed about what I was going to do with the money and had already spent it in my mind.
Hours later I got another email stating that they had made a mistake and that I was actually owing them £60. £60 might not seem much to you but when you thought that you had a windfall coming and now have to owe someone its a big deal.
Don’t fall into that trap. If you are due some money back for any reason at all make sure it is physically in your hands before you mentally spend it and make sure you spend it on something sensible.
Make sure you can afford to spend it.
2. You Have No Savings
There are so many people walking around without a single pound in savings. I’m not just talking general saving here but I’m also talking about having an emergency fund too.
They say everyone is only one paycheck away from bankruptcy. Well, you don’t have to be if you put the proper security in place.
Having an emergency fund is non-negotiable. It acts as a buffer for your finances so that if a financial emergency was to pop up you wouldn’t have to go into panic mode and start trying to borrow money from all over the place just to cover the costs.
If you are not sure what an emergency fund is you can read more about it here.
Don’t get yourself into a financial pickle make sure you have a good buffer in place for emergencies.
3. It’s A Literal Scramble For You To Make It To The End Of The Month
Living paycheck to paycheck is certainly no joke but for some reason, many of us live that way. Some through bad financial decisions and some because they just don’t make enough for ends to meet.
If you find that you are living paycheck to paycheck then you need to do something about it asap. Don’t just wait for something bad to happen financially before you take things seriously.
If you are living paycheck to paycheck then you need to put some things into place. That might mean getting a second job or getting a side hustle.
If you are paycheck to paycheck because you are simply choosing to live beyond your means then you need to sort it out and get serious.
4. You Worry When You Receive A Bill
Been there and done that.
Every day the postman comes and you start to look through those letters does your heart sink when you think you have received a bill?
If it does then it means that something isn’t right.
Yes, we all hate bills and hope to never receive them but the truth is that you can’t live without ever having a bill to pay.
The way to avoid feeling your heart drop every time the postman visits is to make sure you have a working budget in place and stick to it.
If you have bad overspending habits make sure you take care of that. It’s a habit that you need to break. All habits can be broken.
5. You Only Pay The Minimum Amount On Debts
If you have lots of debt but can only afford to pay the bare minimum on them then you know you have a problem.
Not only are you going to be forking out tons of money in interest each month but the debt will remain and feel like a noose around your neck.
If you can only afford to pay back the bare minimum then you have too much debt that you can’t handle. It a very dangerous tight rope you are walking because anything could happen one day and shake your finances meaning that you won’t even be able to pay the bare minimum.
That will, in turn, cause you to have to pay out extra in late fees. You don’t want that.
A good way to quickly pay off debt is to use the debt avalanche method.
6. Your Bank Account Is Always Overdrawn
Lots of people have this problem. You get paid and everything seems fine but it’s not really because your whole paycheck just got sunk into your overdraft so now you have to go back into your overdraft in order to pay your bills and live for the month.
Living this way can end up becoming a vicious cycle if you don’t take charge.
You need to find a way to break that cycle. Some banks will allow you to turn your overdraft facility into a loan which might work out better for you if you can commit to the monthly payments.
Alternatively, you can become very disciplined and do everything in your power to clear your loan. That might mean doing odd jobs or decluttering your home to make some extra cash.
7. You Have No Retirement Plans In Place
Most of us rely on our state pensions for us to make ends meet when we are older but honestly factoring in inflation and lifestyle changes will your pension really be enough for you to live on?
You need to consider other ways to survive outside of a state pension. That might look like a private pension or new ways to generate wealth.
If you don’t have the money to do that then it could be a warning sight that you are living beyond your means.
8. Your Budget Never Works Out For You
If you have tried to put a budget in place but find that somehow it never quite works out for you then it is likely that you are overspending somewhere or you are simply living beyond your means.
Your budget is there to make sure that your money is properly managed and so that you don’t overspend.
Either your budget is too tight to work in practice or you are overspending somewhere.
If you don’t already have a budget a place you can grab my free budget template below.
How Do I Stop Living Beyond My Means?
The best way to stop living beyond your means is to firstly get serious with your finance. That means you have to be all in and do whatever it takes to make thing right.
Final Thoughts On Living Beyond Your Means
It’s easy to get stuck in a cycle where you are constantly living beyond your means. I mean hey, its a lot more fun but its also a lot more dangerous too.
No one particularly wants to live with a budget but we do it because its what is necessary to have a better future.
If you recognise yourself in any of the points above then its something that you seriously need to consider changing.
With the right amount of self-discipline, you can do it.