5 signs you’re living beyond your means

//5 signs you’re living beyond your means

5 signs you’re living beyond your means

signs you're living beyond your meansBankruptcy is more common than most of our clients think… in today’s world, it’s far too easy to run up overwhelming debt and lose control. While an unexpected bump in the road (like an automobile accident or loss of a job) can lead to a bankruptcy situation, many times people start down the road because they’re simply living beyond their means.

If you’re spending more money than you’re making, then you’re living beyond your means. Society pushes for instant gratification and a “you only live once” mentality – but that’s not a great strategy for handling your debts.

It doesn’t take much to start living beyond your means, and many times, it’s the beginning of a downward spiral that can’t be stopped. Once the debt starts to multiply, it’s harder and harder to find your way out of the difficult situation you’ve put yourself in.

The best way to avoid losing control of your debt and finances is to keep yourself from living beyond your means. If you pay attention to the following warning signs, you’ll stay on firmer financial grounds:

You’re living paycheck to paycheck

If you’re finding that you’re running out of money just before every payday, that’s a definite sign that you’re spending more money than you’re making. Sure, you might be able to skate by for a few months, but if you’re stretching yourself that thin, even a small unexpected expense can wreak havoc on your financial picture.

You use credit to pay for cash items

You should be buying everyday items like food and gas with cash – not with credit. If you set a well-planned budget, you should have plenty of cash to pay for day to day items. If you’re using credit cards for daily necessities, this could be a sign that you’re living beyond your means.

You continue to carry debt

This is the most important sign that you’re living beyond your means. If you carry your debt from month to month, that’s incredibly bad for your finances. You should never carry any credit card debt for more than a year. Really, you should only use your credit cards for big-ticket purchases, and you should pay them off as soon as possible.

You have nothing in savings

An emergency savings account is a vital piece of any good financial plan. While some people only keep a few thousand dollars in their emergency fund, we suggest putting aside 5 to 6 months of expenses. If you have nothing in savings, and aren’t contributing to a savings account on a monthly basis, this could be a sign that you’re living beyond your means.

You’re not contributing to a retirement fund

Unless you’re starting late in life, you should be contributing 10-15% of your income to a retirement fund. At a bare minimum, you should be setting aside 5% of each paycheck for retirement. If you’re spending frivolously, you won’t have money left for a retirement fund. Cut your spending and start saving for retirement!

Living beyond your means can quickly lead to out of control debt, which can easily lead to bankruptcy. If you pay attention to these 5 warning signs and set a realistic budget, you’ll be able to adjust your spending habits and avoid a debt spiral that leads to bankruptcy.

If you’re already in financial trouble, or you’re worried you might already be past the point of no return, call us today at 214-760-7777 to schedule a free consultation. We’ll explain all of your options and help get you on the path to a fresh start.

By | July 28th, 2019|Bankruptcy|0 Comments

About the Author:

Mark is dedicated to helping families in North Texas through difficult financial problems. He insists on a personal touch that most bankruptcy attorneys in Dallas are too busy to provide. Call today for a free consultation and speak directly with Mark.

Leave A Comment