7 Signs You're Living Beyond Your Means and How to Fix Them

1. You’re carrying a credit card balance from month-to-month
If you have a high credit card balance and you’re paying just the minimum each month, you can end up carrying this balance for years while paying a lot in interest. You might also be tempted to make more purchases on this card since it already has a balance.

The fix: Try to make double payments and stop using the card until the debt is paid off.

2. You stress about bills
Monthly bills should be fixed into your budget. You should be able to pay them easily without any stress.

The fix: Take a long look at your monthly budget to find ways at cutting back. Cancel a subscription you never use, trim impulse purchases, start brown-bagging it at work more often or tighten the belt in any other way possible.

3. You can’t save 5% of your monthly income
If you can’t put away at least 5% of your monthly income into savings, you’re living beyond your means.

The fix: Again, trim your expenses and restructure your budget to include at least 5% for savings.

4. You don’t have emergency and rainy-day funds
Ideally, you should have an emergency fund to cover major unexpected expenses, and a rainy-day fund for small expenses you can anticipate.

The fix: Start building your funds now by putting away as much as you possibly can each month.

5. Your mortgage payment eats up more than 30% of your monthly income
Most financial experts agree that your monthly mortgage payment should not exceed 30% of your take-home pay.

The fix: You have two choices here: Find ways to boost income. Seek a raise at your current job, freelance for hire or find another side hustle for extra cash. Scale back your mortgage payments. Consider a refinance. Speak to a mortgage specialist at Community Financial to explore your options. If your mortgage is crippling your budget, consider downsizing to a smaller and cheaper place.

6. You lease a car you can’t afford to buy or finance
Can you afford to pay for or finance your car? If the answer is no, you’re in financial trouble.

The fix: Downgrade your vehicle to one you can actually afford.

7. Your financial decisions are influenced by your friends’ spending habits
Thanks to the hyper-sharing culture of social media, the pressure to keep up with the Joneses is stronger than ever. If you find yourself making financial decisions based on your friends’ choices, you’re likely spending more than you can afford.

The fix: Stop looking over your shoulder and keep your eyes on your own life and your own wallet. If you’re in over your head, Community Financial can help! Stop by your local branch or call (877) 937-2328 to get on the right track today.

Your Turn: What’s your personal red flag that your spending has gotten out of control? Share it in the comments.