Four Signs That You’re Living Beyond Your Means

News & Views | Gerren Keith Gaynor | 12/04/2013 | 02:15 PM EST

Financial discipline can be hard to come by

Everyone wants to be financially stable. Unfortunately, money managing is a lot harder than it looks. It can be rather tempting trying to keep up with the Joneses; having brunch on weekends, going on shopping sprees and maxing out credit cards on drinks at the bar. Ensuring financial stability takes a lot of discipline and strict spending habits. People often chase unreasonable luxuries or try to live up to inordinate lifestyles, leaving them financially barren with bills the size of Mount Everest. Check out these four signs that you may be living life way beyond your means.

Rent is Too High

If your rent is eating up a chunk of your check, you may want to reconsider where you’re living. Where you rest your head at should be both comfortable and practical. No need renting an apartment or home simply for amenities you can’t reasonable afford. If it means not having stainless steel appliances or marble granite countertops, then so be it. Financial experts recommend that your rent exceeds 25 percent of your income. For example, if your annual salary is $30,000 per year, or $2,500 per month, you shouldn't plan to spend more than $625 per month on rent.

Bad Ultimatums  

If you’re constantly stuck in spending ultimatums between your needs and wants, you may want to get your priorities in order. There’s no reason why you should negotiating between getting a manicure or new pair of kicks and paying your light bill. If you don’t have the cash flow to enjoy certain luxuries, start saving. Nothing should come before your everyday necessities.

Rainy Day Fund  

It’s highly recommended that everyone have a stash for a rainy day. Ideally, you want to save enough money to last you up to six months without your work income. If you were to lose or quit your job, you want to make sure that you have some financial cushion to last you through the dry season. Plus, saving should be a way of life. It’s essential. You never know what emergencies may come up.

Credit Card Woes

If your credit card balance hasn’t changed over the past year, it’s safe to assume your priorities aren’t together. Credit cards should be used for emergencies only. If you’re maxing out your credit cards on retail therapy and making payment only to spend it all over it again, you’re defeating the purpose.

(Photo: Tetra Images/Getty Images)

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