Friend want to know If You Are Living Beyond Your Means? Get tips below …

Biztoon-illustration1 living beyond your means










You do not have to be a financial expert to know that you are spending more than you should, SIMON EJEMBI writes
For individuals to attain financial freedom, one of the most common pieces of advice given by experts is, “live within your means.” To achieve this, they are told to spend less than they earn and save more, to stick to budgets, and to know the difference between their needs and wants.
As straightforward as that may sound, many people do not make the needed adjustment, erroneously believing they are living within their means. After all, everything they have spent their money on can be categorised as needs. In essence, their expenses can be “justified”.

Living within your means goes beyond “justified expenses”. And to better understand the concept, this article will look at the signs that imply an individual is living beyond his or her means.
Though the warning signs that you are in over your head are many, they are easy to understand and if you pay attention to them, you won’t stray from a sound financial path for long, and if you have already gone astray, you can easily find your way back. The first step is to know when you are getting it all wrong.
You can’t survive without your job for long
When you lose your job, the ideal thing is to fall back on your emergency fund or savings. This is expected to keep you going for a year or more. According to experts, however, many people do not have such a fund or savings that can make up for it. They say when an individual cannot survive financially for up to six months without an income, it is a sign that person has been living beyond his or her means. If you have an emergency fund or savings, consider how long it will keep you going when things go wrong. If it is too small you need to get to work immediately as that may mean you are no longer living within your means.
You can’t track your expenses
Another sign that you are living beyond your means is when you have no idea about what you do with your money. If you are always broke and you can’t account for income – i.e. you don’t have a breakdown for how you spent the money and what you spent it on, then you are “biting more than you can chew”.
You are in ‘recession’
If you suddenly find yourself implementing “a structural adjustment programme” or austerity measures, even though your income has not plummeted and there are no inflationary factors to blame for the hard times, then it is possible you have strayed off a sound financial path.
Instead of lamenting about how the tough times have forced you to skip meals or sell off one of your cars or gadgets, you should first consider the possibility that you have perfected the “art” of living beyond your means.
You only save an insignificant portion of your income
Some financial experts advise people to save up to 30 per cent of their income, some say 15 per cent and others say 10 per cent. While they may disagree on the percentage, you should save, they all agree that saving below five per cent of your income is unacceptable and an indication you may be living beyond your means. This means if you earn N100, 000 and you save less than N5, 000 you need to work on your lifestyle and find ways to boost it. In fact, many experts expect you to save nothing short of N10, 000 on a N100, 000-income. Under the Contributory Pension Scheme, people are required to save 15 per cent of their income, while their employees contribute another 15 per cent. If you can use that as your yardstick, the better you may be for it. Just try not to go below 10 per cent.
You often spend your savings
As explained above, many people find it hard to save. Those that have savings have difficulties saving enough. According to experts many people often dip into their savings, depleting them in less than weeks after they put the money aside. For instance, there are people who have succeeded in making it a habit to save a certain percentage of their income every month. Many of this people, however, run out of cash before they receive their next income and turn to their savings even when there is no emergency. Many of such people can be found at conferences organised by Pension Fund Administrators making enquiries about the possibility of accessing their retirement funds before they retire. If you are one of them, you may have fallen into the category of those living beyond their means.
You spend money you don’t have
Do you spend your salary before you are paid? Are you one of those who spend their estimated profit before you actually realise that profit? This can only mean one thing, according to experts: you are living beyond your means. They explain that such people are the type that would spend money meant for a major project after saying something like, “Christmas is around the corner, and my bonuses will be enough for me to complete the project in time.”
You purchase items on credit
Okay, agreed, sometimes things can suddenly go bad due to forces beyond you. But experts say when you often resort to buying things on credit, it may be an indication that you are living beyond your means. This is more so when you often can’t pay off your debt at the agreed time.
You are stuck in debt
When you spend your savings, spend money you don’t have, purchase items on credit, and fail to pay for those items at the right time, you are likely to become stuck in debt. This becomes worse when you begin to have difficulty paying other bills. Once you get stuck in debt with no guarantee that you can pay it off soon and without conflict, experts say it is an indication that you are living beyond your means.
You borrow from Peter to pay Paul
This applies to people who are stuck in debt. Instead of avoiding further debt, they borrow more to pay off some of the older debts, which may put them in trouble. Instead of being a clever move, experts say this is a clear indication that you are living beyond your means. They explain that it means you are incapable of sustaining your lifestyle.
You buy things you don’t need
Some people will spend a huge amount of money getting items like shoes. When asked why they did even when they already have enough shoes, they may say things like, “You know I am a shoe freak; I just couldn’t resist these ones – they are from Italy.” This may sound silly but there are many people who buy things for such reasons. It is worse when they buy things they don’t need. If each time you buy an item, you say to yourself, “I don’t need this, but…”, then you are living beyond your means, especially when there are other financial responsibilities you have been unable to take care of.
There are many more signs, but these are some of the major ones. Now, if you believe all the pieces of advice about saving, budgeting, and cutting down your expenses, etc. are not meant for you, review your situation and if you are living beyond your means, take immediate action.-Culled from Punch Nigeria