It’s ridiculously easy to end up in debt these days and living beyond your means. In the age of contactless payments and FOMO (fear of missing out), many people are getting swept up into having it all instead of sitting down and working out realistically what they can and can’t afford.

Here are 5 signs that you’re living beyond your means.

1. You Aren’t Saving Each Month

If you aren’t saving a set amount each month, you’re living beyond your means. Putting money aside for the future is essential to having a positive cash flow – you don’t want to be living month to month, never knowing how you would cope with an unexpected bill.

2. You’re Credit Card Balance Is Not Reducing

If your credit card balance is going up or staying the same due to increased interest, you’re living beyond your means. Adding items to your credit card and not paying them off is a very big red flag.

3. You’re Constantly Racking Up Late Fees

If you’re always missing payment deadlines for your bills, you’re living beyond your means. Missing the odd bill because you forgot is very different to making your debtors wait 2 weeks until you get paid before you can pay your bills.

4. You Buy Things Even When You Know You Can’t Afford Them

Know you can’t afford those shoes but you go and buy them anyway? You’re living beyond your means. Make a decision to stop spending until you’ve gotten on top of your debts and savings.

5. You Haven’t Set A Monthly Budget

You’ll never get on top of your debts and be able to save regularly until you set up a monthly budget. It needs to be realistic as well. Don’t budget $500 a week for entertainment if you don’t have it. Similarly, don’t budget $50 a week for groceries when you know it’s more likely to cost $150. Using personal budget software can help you immensely with this task.

So, You’re Living Beyond Your Means? What Can You Do About It?

Set A Budget – set a monthly family budget and stick to it. It won’t be easy but it will be eye-opening!

Set Up An Emergency Fund – having a stash of cash available for unexpected bills or situations is crucial. If you need cash in a hurry, you don’t want to be putting it on your credit card or taking out a loan if you can help it.

Cut Up Your Credit Cards – the simplest thing to do it get rid of your credit cards. If you don’t have them, you can’t spend it!

Work Out A Debt Repayment Plan – if your debts are taking over your life, create a debt repayment plan. Speaking to a trusted financial advisor in Perth can help you to work out which debts to pay off first and what amounts you can afford each month.

LUDA Financial Solutions have helped countless families who were living beyond their means. We’ve helped create monthly budgets that families can stick to, and in the process, helped them pay off thousands of dollars’ worth of debts and start long term savings plans too.

If you’re feeling overwhelmed, get in touch with us for a free and confidential chat about your circumstances. We’re here to help you on the road to financial freedom.