6 min Read
03 Nov 2018

Written by Liam

Over 30 years experience in financial services, residential lettings and property sales. Director of a leading national estate agency chain, until leaving in 2008 to pursue other commercial interests. Vast experience in new business development, business change, management development and business strategy.

More about Liam

7 signs you are living beyond your means

Most people who are living beyond their means don't realise until it's too late. So here are some warning signs that could help you stop before you hit that financial brick wall.

You couldn't live 3-6 months without your income

There are always financial emergencies that arise when they are least welcome, but these are less of a problem if you have built up an emergency fund. The amount of the fund should be 3-6 months worth of income and this should be enough to cushion you against any financial surprises, even losing your job. Managing to build this emergency fund will not be easy, if you have limited spare money every month, but putting just a small amount away each month will quickly build  up. Read this article to find out more - Building an Emergency Fund

You don't live within a budget

Living without a budget is like driving with your eyes closed - you can't see where you're going! Having a budget allows you to understand your income and outgoings and plan for purchases without resorting to credit. A lot of people are afraid of creating a budget plan as they are afraid of what they might uncover but this is actually making matters worse and maybe even driving them deeper into debt. Read this article to find out more - Start 'big picture' budgeting.

Your credit card balance is slowly rising

Check your credit card bills for the last 12 months and see if your balance is going down or going up. If the balances are creeping up then it means that you are relying on credit more and more as the months go by. Starting to reduce your credit card spending and bringing down the outstanding balance over time will be a major step to controlling your finances. Read this article to help you on your way - The 5 simple steps to clear your credit card debt

You use your credit card at the supermarket

Using your credit card to buy your weekly shop, and not clearing the balance at the end of the month, is just plain mad as you could be paying for the food months after you have eaten it! It is easy to get into the habit of using your credit card without thinking so why not keep your credit card at home so that you are making a conscious decision to use it and not just using it out of  habit.

You have paid your bank an overdraft fee in the last 12 months

If you are regularly paying overdraft fees then you are just throwing  money down the drain. Using a budget, as detailed above, will help you take control of your spending and stop you paying your hard earned cash to your bank. Check your bank statements for the last 12 months and add up how much money you have paid your bank in unnecessary charges.

You are paying for a holiday using credit

You probably justify this by saying that you deserve a holiday because you work so hard. Whilst this is probably very true, using credit to buy your two weeks in the sun is madness. Let's face it holidays are a luxury so they should be paid for from 'savings' otherwise you will still be paying for this year's holiday when next year's comes around. Of course there is nothing wrong with paying for a holiday with a credit card to protect yourself under Section 75 of the Consumer Credit Act should anything go wrong (i.e the airline goes bust) but make sure you clear the debt at the end of the month. Also using a credit could encourage you to buy a more expensive holiday than you would have done using your hard earned cash.

You are in debt but pay someone else to do a job you could do yourself

Washing your car, cleaning the house and ironing are all jobs that most people hate, so getting someone else to do these tasks is very tempting. However, if you are in debt then these are luxuries you cannot afford. Calculate the annual cost of these outgoings then do them yourself and use the money to pay down your debts. Or better still go and do some of those jobs for other people and earn extra money,  you can't be too proud if your are determined to take control of your finances.

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  1. Lorraine March 27, 2013 at 10:23 pm

    Building an emergency fund and ‘start building’ a bigger picture, really interesting articles.