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Signs You’re Living Above Your Financial Means

Signs You’re Living Above Your Financial Means

Signs You’re Living Above Your Financial Means


When you’re living above your means, it can be difficult to know when and how to cut back. But cutting back isn’t just about spending less. It’s also about knowing what your budget looks like. So, you can make sure that you don’t overextend yourself financially. Here are some signs that might indicate you’re living above your financial means:

You regularly use credit.

Using credit cards responsibly is a double-edged sword. On one hand, it can help you build up your credit score by paying off your balance on time each month. But if you don’t pay off the balance in full each month and instead use it to pay for things like grocery shopping or other necessities (which involves more frequent charges), then the negative impact on your score will be greater than if you had just used cash from day one.

Credit cards are not always bad—but they can be dangerous if used improperly or irresponsibly. If there’s anything we’ve learned about living above our means over the past few years, it’s that spending money is fun! So why not treat yourself right? Just remember: Credit cards don’t give out free money; they charge interest!

You don’t have a savings account or emergency fund.

Your emergency fund is essential to your financial health. Without one, you’re at risk of being unable to pay for unexpected expenses. Those unexpected expenses can quickly add up if they send you into debt.

An emergency fund is basically any amount of money that you set aside specifically for the purpose of paying for emergencies or short-term setbacks in your budget. For example, a car breaking down or an unexpected trip home from work.

It’s important to note that having an emergency fund isn’t just about saving up enough money. So, you never have an issue with cash flow. It also means making sure this money is accessible when needed most! It’s best if this cash is stashed in an account where there are no fees associated with opening new accounts. For example, using Ally Invest. Make sure yours meets these requirements before putting too many eggs into one basket!

You need to pay bills with your credit card.

If you’re paying your bills with a credit card, it’s a sign that you’re living above your means. According to the National Foundation for Credit Counseling, 37% of Americans use their credit cards to pay for routine purchases like groceries and gas in addition to regular monthly bills like rent and utility payments.

When this happens, it means that there aren’t enough funds coming into your bank account each month. In fact, according to the Federal Reserve Bank of New York, nearly half (44%) of Americans have difficulty paying off their overdue debts within three months. While another 20% take longer than five years!

The best way out of this situation is by finding ways to earn extra income without sacrificing too much time or energy on other projects that don’t generate any additional cash flow (like writing freelance articles).

You live paycheck to paycheck.

If you are living paycheck to paycheck, it could be time to re-evaluate your finances. Living above your means may sound like an extreme way of managing money, but there is a way of thinking about it that can help you get back on track.

One of the first signs that you are living above your means is if you don’t have a savings account or emergency fund set aside for emergencies (i.e., car repairs or medical bills). Having an emergency cash reserve allows people who live paycheck-to-paycheck to make sure they don’t miss out on being able to pay their rent or electric bill before credit cards hit zero balances. Because they were unable to make payments due in full during a short period of time when needed most.

Another sign that someone lives beyond his/her means is when he/she needs more than one card in order just pay bills each month; this indicates that someone has gotten into debt by using credit cards without having any type of savings account behind them so they could cover unexpected expenses without going into debt further down the road when things go wrong with credit card companies which then causes more problems down line causing even more stress among loved ones trying desperately not only handle daily tasks at home but also deal with mounting debt caused by irresponsible spending habits throughout childhood years thus creating lasting effects later on down line generations after coming out victorious from World War II where many men lost their lives fighting against Nazis Germany during WWII era 1940s.

Your rent or mortgage payment is too high for your income level.

One way to tell whether you’re living above your means is to look at the amount of money that goes toward rent or mortgage payments. If it’s more than 30% of your income, then you’re probably paying too much for housing and may not be able to afford the area where you live.

If this sounds familiar, then there are some things that could help:

  • Talk with friends and family members who live in similar neighborhoods as yours (that way they can give advice). They might also have suggestions about how best handle any financial issues that come up during this process!

You don’t set a monthly budget for yourself.

If you’re living above your financial means, it’s time to set a budget. A budget is a plan for how much money (or what percentage of your income) each month goes towards necessities like rent and utilities, as well as discretionary items such as eating out and going shopping.

You should have a monthly budget in place. So, you can see where the money is coming from every week and make adjustments if necessary. This will help keep track of how much money is being spent on non-essentials. Then use those numbers when making purchases at the end of each month!

To begin setting up an expense tracker, open up an online banking app like Mint or Personal Capital. Link all of your accounts together. So, they show up under one entity instead of multiple ones across different apps (like checking accounts).

You pay more in fees than you realize.

You may be paying more than you realize. Fees are not just for credit cards and cell phone bills. They can be hidden in all kinds of places, including:

  • Your bank statement
  • Your bill from the cable company or internet provider (even if you only use their services once a month)
  • The annual membership fee for your gym (even though you only use it once per year)

You say yes to every invite from friends and family because you want to seem successful.

You say yes to every invite from friends and family because you want to seem successful.

This is a huge sign that you’re living above your means. You may think it makes sense, or that there’s no harm in doing so—but if this is how you spend your time, money and energy, then who knows where the debt will take you?

Your car payment is too high for your income level.

If you’re paying more than 10% of your income toward car payments, it can be time to consider other options. Perhaps you’ve been driving a car that is not as fuel efficient as the one you could buy with the money saved from selling it and buying a cheaper one. Or maybe your old car has been in the family for so long that it feels like home—and now that you have an extra room in your apartment or house (or both!), why should someone else pay for its upkeep?

The good news is that there are many ways to get out of debt without sacrificing too much financial security. You might want to start by looking at how much money is left over after all bills are paid each month (this will help determine what kind of debt management plan works best). If there aren’t enough dollars left over from paycheck-to-paycheck spending on things like rent/mortgage payments, groceries etc., then maybe it’s time for some serious budgeting!

Your car insurance payments are too high for your income level.

When you’re living above your means, it’s important to watch what you spend. You don’t want to be running out of money in a hurry. One way that this can happen is if you have a lot going on at once and start spending too much money—this happens when people get caught up in their work, or they’re trying to impress someone else with fancy dinners or other expensive things they might not need (or even want).

When we’re talking about car insurance payments here, though, we’re really talking about how much car insurance should cost for the kind of job that person has and how much income he or she makes per month. If someone earns $3 million per year but pays $2 million dollars worth of car insurance every year because he drives around town every day and usually takes public transportation everywhere else besides work (and then there are all those expensive meals), then this person is definitely living above his means!

It’s important to know when you’re overextending yourself financially

It’s important to know when you’re overextending yourself financially. You need to know how much you can afford to spend, save and borrow.

You should also be aware of the state of your investments and whether or not they are sufficient for your needs.


Living above your means is a delicate balance. It’s important to know when you’re overextending yourself financially, but at the same time, it’s just as important not to let any one of these signs slip past you without addressing them immediately. By taking some time for yourself each month and examining how much money you spend and how much debt you have, it will be easier for you to make sure that your finances stay in check no matter what life throws at them!

Read More How to Start an Emergency Fund


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