You Are Definitely Living Above Your Means As A Woman If These 7 Things Are Happening To You
Financial intelligence is not a trait every woman has. Some women are particularly careless with money and therefore always end up having to borrow or go hungry.
Living above one’s means has to do with you spending above what you earn or your monthly or yearly income. Living above your financial status means that you are always in debt, always in on financial scare or the other.
If you are concerned that your finances could be in danger, read on for 7 key indicators to help you determine whether you’re living beyond your means.
1. You are Saving Less Than 5%
Those who want financial security during their older years must make sure that they aren’t among those who are spending more than they make. If you are saving less than 5% of your gross income, you are likely living above your means.
A savings rate below 5% means you could be in real danger of financial ruin if someone in your family were to have a medical emergency or your family home were to burn to the ground. With savings this low, it means your probably would not be able to stay afloat.
2. You’re constantly borrowing money
Do your family members or friends evade you and do not reply your text messages and phone calls? Probably it’s because they know that you’ll ask for money. If your current income can’t support your lifestyle and you are always borrowing money, you are living beyond your means.
3. You try to keep up with your friends
Does your best friend shop and go on vacation often? Do you try to keep up with her lifestyle even when you know she earns more than you do? If so, you are probably living beyond your means. There is nothing wrong with a little fun, of course, but only if you can afford this.
4. You’ve never set a budget
Having a written budget is one of the most important steps to financial freedom and living within your means. So if you’ve never set financial limits for yourself and you’re not filthy rich; chances are that you need to take an honest account of your income, spending, and savings goals. This exercise can help you track not only what you’re buying, but also how and when.
5. You have no money left at the end of the month
People who live on salary to salary often believe that they can’t save money or spend less because their lifestyle has become a habit. However, there are typically at least one or two small ways you can cut back; like trading an expensive dress for a cheaper one or reducing how often you hang out with friends.
An easy way to learn about savings and become more conscious of your spending decisions is to enact a no-spend month. Allow yourself to spend money only on the bare necessities for 30 days —rent, bills, groceries— and cut out every other thing. No clothes shopping, no eating out, and especially no online splurging. Nothing puts your finances in check more than this.
6. Bills are way above your income
If your monthly income is being sliced into different pieces to pay for dozens of unnecessary purchases and services, you are likely living above your means. Lay out all of your monthly bills on your table and go through them one by one.
Some of the best places to cut your spending include your Airtime, data fees, utility bills, clothes shopping and your entertainment expenses (you could start to dine out less and pack lunch for work).
7. Before buying something, you often think, “I know I shouldn’t, but…”
“I know things are tight, but I need to take that vacation, it’s for my mental health,” or, “I work so hard, I deserve that new Hermes Birkin bag.” Does this sound familiar? That’s just rationalizing what you know is not a good idea for you… like a spa day or an expensive evening in town. You don’t often hear that from people who are comfortable financially, but more so from those who are struggling.
So if you fit into any of these signs above, you probably need to take an adequate look into your finances.