Are You Living Beyond Your Means?

Photo by Towfiqu barbhuiya on Unsplash

Do you find that keeping control of your finances is becoming increasingly difficult? “Live within your means” has always been a classic piece of financial advice given to those entering the real world. However, many ignore this advice and live beyond their means. This causes a lot of stress, and in some cases, emotional trauma.

In today’s society, advertisements bombard us with offers which encourage us to Spend! Spend! Spend! With promises such as-

“Easy Credit!”

“Pre-approved loans!”
“12 months interest-free credit!”
“Free gift when you apply!”

To most people this can all seem rather tempting, given the current “live for today” attitude. But too much can be spent on luxuries, leaving not enough to pay the bills.

Certain kinds of debt may be appropriate, such as a mortgage or a car loan. Many people, however, try to buy more than they can afford. Indeed, banks and businesses encourage us to do so.

There are two things to keep in mind when you’re trying to find out how much money you need to live on: that you’re probably not saving enough for retirement, and that a large percentage of the population is living paycheck to paycheck.

If you’ve ever had a large medical bill or an unexpected car repair come up, you know what it feels like to live without money for a few weeks. You may not have realized it at the time, but if the unexpected expense hadn’t occurred, you would have been living on credit — which is basically the same thing as living beyond your means.

There are warning signs to indicate whether you are heading for financial difficulties. Look at the following list of 6 signals. If any one applies to you then it’s time to take a closer look at your budget. If more than one applies then you could already be in financial difficulty.

  • Taking out loans to pay off debts.
  • Receiving “overdue” notices.
  • Using savings to pay bills.
  • Cashing-in or borrowing from insurance policies.
  • Working overtime to make ends meet.
  • Juggling debts and only paying the most demanding.

Living beyond your means can be self-destructive, but it’s also like a virus that spreads. It can infect you, but it doesn’t have to kill you. If you’re living beyond your means and looking for a way out, here are some ideas to get you started:

Admit that there is a problem. Stop saying that you can afford things that you can’t afford. Stop telling yourself that you’ll find the money somehow. This is nonsense. You need to stop spending and start being realistic about what you’re doing with your money. The more clearly you can see where your money is going, the more likely it is that you’ll be able to stop spending it in ways you can’t afford.

Make a budget and live within your means. If this feels like deprivation, then take another look at how much money you really have compared with how much money you want to spend every month. There’s probably room for improvement if your current lifestyle is causing financial stress or fear of debt collectors.

Spend less than you earn every month. This should be a fundamental part of any budgeting plan, but so many people think they need to spend more or less than they earn based on changes in their income — or don’t even

Always remember never to get into debt over things that have no long-term impact on your life. For instance, do you really need an upgrade on your phone? Is a new Smart TV really such a necessity? And what about a second car? Is it really essential or just an expensive convenience?

Don’t forget to also take a close look at the small things in life. For example, do you really need to go and have a cappuccino every time you pass a coffee shop?

But by far the most important thing to do when it comes to personal finance is to keep a constant check on your outgoings. Don’t wait for your bank statement to scare you next time it comes through your door. Remember the old saying that an ounce of prevention is worth a pound of cure.

In the end, living beyond your means isn’t about the money. It’s about happiness and fulfillment. I want to create a long-term, enjoyable lifestyle for myself that makes me feel like my life is meaningful. And I want my kids to grow up in an environment where there are no limits or expectations. Living within our means is just as much about creating positive experiences for ourselves, our families, and our future generations—it’s not so much about numbers and amounts.