Why is it so important that you always live within your means?
None of us want to be broke!
I think most people would agree with that statement but what is the reason that so many people are broke?
Seriously what gives?
Well the truth is there are so many factors…
A family emergency here and new car loan there it all adds up, without the added credit card swipes that seem to be all to easy for people to continue to do even when there is no money.
The worst part is we often end up asking ourselves how did we land ourselves in this situation?
Heres the brutally honest truth that you already know but you want to know again.
Just because you don’t live on the streets doesn’t mean that you aren’t broke.
Being broke is as simple as only being able to make the minimum payment on your bills!
Broke is feeling like your drowning in your self-made financial problems with no clue how to rectify the situation.
Broke is taking out a $40,000 car loan because you feel you can make the monthly payment but yet you don’t even have savings, an emergency fund, or sinking funds in case of unforeseen life events.
So are you living beyond your means?
It is not to late to adjust and change. But you have to make the required changes for your financial future so you can achieve the financial success you desire.
Just don’t stay in denial.
1 | You Don’t Have A Budget
Having a working budget is very crucial and one of the most important steps to achieving financial success. You must make your budget a priority, by doing so you will be that much more in control of your personal finances. Afterall we all want to win in this money game.
I was never one that was pro budgeting, in fact, it was only very recently that I created my own budget.
But now that I have, I want everyone to know how great budgeting can be for your personal finances and your financial future.
Let me set the record straight for you. You NEED to start your own budget without delay if you are good at managing your money already or really suck at it no matter what you should have a budget.
When you track your spending and your income you are able to identify with ease where you are making financial mistakes. This also gives you the opportunity you need to adjust and move forward.
Personally, for my husband and me, it was the $100 a week I and my husband were spending between the two of us on eating out or grabbing take out.
Whatever Your Financial Mistake Is Chances Are You Won’t Be Able To Pin Point It Unless You Are Tracking Your Spending Habits.
Take action and create your Powerful Budget, but remember you can have a budget but it doesn’t do anything for you unless YOU DECIDE to follow it.
Sign up Now for my Powerful Budgeting Email Course so you can start your budget with success. Don’t make the mistakes that most people do.
2 | There Is More Month Left At The End Of Your Paycheck
We all know someone like this that always seems to be broke. Or maybe we are the ones ourselves that are always broke. Either way the basics truth of it is we are not managing our money properly so we don’t have enough money to get us through the month.
One example of this is because you keep paying overdraft fees so you can make it through to the end of the month.
Living paycheck to paycheck is a very scary financial place to be in, there is no doubt that you want out of this vicious cycle.
Often times if we are living in this horrible cycle we don’t believe that we can save and honestly we just become numb to your financial health. Plain and simple it becomes our habits.
I want to help you before you become hard to the facts. I strongly suggest that you take the needed time to track your spending habits very carefully to see specifically just where you are going wrong with your personal finances.
If you are having trouble making ends meet right now check out how I am making extra money each month. Here are some ways you can make an extra $1,000 per month.
Another suggestion I am going to make to help you save more money is to purchase a Crockpot so you can make easy meals at home instead of wanting to eat out a ton.
A coffee maker would also be a really wise purchase. This would allow you to save money every single morning by shipping the coffee run.
After all every single dollar you can save or stretch further counts!
There is no harm in starting small. Progress is progress. Try cutting 2-3 expenses, to begin with, and adjust then take a look and see what else you can cut.
3 | Credit Card Vacations
You’re not alone if you have considered taking a vacation by charging it to your credit card. Let’s be honest we’ve all considered it!
In fact, it would even be fair of me to assume that you have been guilty of doing just this. I mean we all need some downtime to relax from time to time.
Whether it was a one night stay in a hotel for a date night or it was an all-inclusive to Mexico. You’ve relied on your credit card to pay for your vacations when you didn’t have the actual money to cover the costs.
The typical vacation cost about $1,200 per person
So tell me, is it worth it?
And by worth it, I mean is it worth having to pay it off for many months following the vacation?
Think Of It This Way
If you are still paying for a vacation many months after the actual trip – You are absolutely living beyond your means.
Instead of living beyond your means why not start a vacation sinking fund?
Learn what sinking funds are and how they work HERE!
4 | In Denial Of Your Bills
Don’t try and fool yourself you know when you owe money and exactly why. But don’t become oblivious face the reality of your bills head on don’t shove them aside. Instead, choose to take responsibility for your money management skills.
It can be discouraging though when you are trying to get your personal finances sorted out and more and more bills seem to be arriving.
Be assured those facing your bills are the only way you can start to overcome the financial burden you have created for yourself.
You want to better your situation and I commend you for that it is not always easy, so give yourself an advantage and face the financial facts of your situation.
Only once you have a firm and clear understanding of how much you owe in total can you finally take charge and dominate your debt with the help of a Powerful Budget of course.
Do yourself a favor you will be grateful for in the future start your journey to financial success now.
5 | You Feel Guilty Of Your Purchases And Resort To Hiding Them
This one is very self-explanatory if you are feeling so guilty of the purchases you are making that your resort to hiding them you are living well beyond your means.
Ask your self a brutally honest question such as “why do I feel I have to hide my purchases?”
Chances are it is many pangs of guilt because you know you are spending money you do not have.
I fought this feeling just like you may be so let me tell you that it is very possible.
Living within your means doesn’t have to be restrictive it can actually help you feel more in control of your personal finances. If you want to make a purchase badly just budget for it and save for it well in advance. Just cut your on a whim spending completely.
If the object is just going to be a financial burden don’t trade your sanity and your financial happiness or momentary happiness.
6 | Pay For Tasks That You Could Do Yourself
Are you steadily going into debt for tasks or jobs you could do on your own for pennies?
Maybe you feel you’re to busy to cut your grass, give yourself a manicure or pedicure, wash your car, or put together furniture.
There are expenses that are completely unavoidable such as (childcare, fuel or car repairs.) But the facts are the facts a person struggling to make ends meet should not be paying for services they can provide for themselves.
Give it at least a chance and try doing a task on your own that is within your skillset. After all, what do you have to lose you may even be able to teach yourself new skills.
7 | Paying Only Minimum Payments
I know just how easy it is to swipe a credit card and forget that you even made a purchase. It is so easy to not even realize how much you have been spending until you see your credit card balance and are in shock.
I think we can all agree we have bee shocked by a credit card bill at least a couple times.
I may not be personally past my debt but I can tell that I sure am tackling with success to the best of my abilities. This means making it a priority and not only making the minimum payments.
Going through debt teaches a person so many important financial lessons you will be able to use to help others.
Nobody should have to live their life consumed by debt. I know I don’t want to.
The truth of the matter is interest payments are sky high and are globally known as a major downside of borrowing money.
The interest on the money borrowed, after all, is the reason we end up staying in debt for longer periods of time then what we have to.
Be firm and do all you can in your power not to settle for high APR.
Loans of any kind should have the absolute lowest interest rate you possibly can manage for yourself.
Fight for lower, after all, the lower the interest generally you will end up with a lower monthly payment too. A payment that is maybe more affordable for you.
Negotiating a lower interest rate can be as simple as calling up or credit card company or you can opt to use a company like SoFi.
SoFi is meant to help you get the most affordable rate possible.
Read more about SoFi HERE.
8 | You’re Not Saving While You Spend
Everyone has necessities in life that they need to live. And since you need to purchase these items anyway why not also “save” or earn money back for making these everyday purchases.
This could be in ways such as shopping your local grocery store flyer or using cashback apps that literally give you cash back for the purchases you make when you shop through the app.
Another way to “save money is by purchasing a FoodSaver such as this one here.
There are so many things to buy online and honestly that is where you get the best deals anyways.
Especially when you use Rakuten (Ebates) for cashback rewards. This way I know I am getting the biggest bang for my buck.
Ebates is a very popular cash back app, so I’m sure you have heard of it. But in case you haven’t here’s what you need to do to get started:
You sign up here for a Rakuten (Ebates) account (don’t worry it is FREE.) After that, all you have to do is use the search bar on the app to find the retail you are looking to make a purchase from.
On every single purchase, you make you will earn cash back rewards.
Once you have made enough purchases to accumulate at least the minimum payout ($5.01) – Rakuten will send you your cash rewards through either PayPal or send you a cheque you can deposit into your bank account.
TIP: the many Rakuten (Ebates) links above will give you a bonus of $10.00 just for simply signing up and shopping using Ebates.
9 | You Have No Emergency Fund
You may or may not be aware of what an Emergency Fund is but if you don’t have one yet you must start creating one now. It’s time you get acquainted with the term and stop making up excuses.
After all, we can never be too prepared for life’s ups and downs, we must learn to prepare well in advance.
Many financial experts you talk to will highly recommend that you have an emergency fund with a large enough sum to cover at least 6 months of all your monthly expenses. My recommendation is why stop at 6 months? You never know when you could get a serious sickness or face long term job loss, so why not set your sights for a long term emergency fund and try saving 9-12 months of expenses.
It is always better to be over-prepared than underprepared. Create a financial cushion that you can depend on to sustain you through trying times.
Often we have to learn this lesson on our own at our own time, but you don’t have to. Learn from many other people’s financial disasters that were a result of not having an emergency fund in place.
Imagine this scenario was you. Ask yourself what would I do?
Had to replace buy winter tires for your car (about $1,000) and not long after needing to fly home for a death in the family (about $350) oh and just because this is a scenario what if you also had to pay for a tooth extraction (about $500.)
Now I am aware this is a lot and a major financial burden for most.
My question now is would you be able to weather this financial storm without going into debt?
Start small, work towards even a $1,000 emergency fund! Even a $1,000 is better than nothing when unpredictable circumstances occur.
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