Living within the means you have and spending less than what you earn is the most important aspect of personal finance. Whether you consider yourself a responsible person with respect to finance, sometimes you come up with less cash in your hands. Many people fail to maintain their realistic spending. Following are some of the things that can be seen as an indication when you are not living within your means. By keeping these things in mind, you will be able to save a lot of money, which you can use at the time of emergency.
1. You Don’t Have a Track Of Monthly Spending:
If you always end up with no money in your hands and you do not have any idea about where is your money going, then there might be really hard times coming to your financial life. If it’s hard for you to answer that what are your expenses, then you should have to do it right now and compute all your monthly expenses.
2. You Start Using Your Credit Regularly:
When you are living beyond your needs, you start buying things using the credit card, which you used to purchase by money. Not only this, but you start withdrawing cash using credit card and use the money to free yourself from the expenses. This thing will end up when your credit card has maxed out and you cannot increase its limit. Credit cards can only be used for emergency purposes when you do not have money at that time. But using them regularly will put you in trouble. So avoid using them regularly.
3. You Take loans to Pay debts:
If your credit and debts become too much that you cannot pay them with your income, and you take loan to pay them, then it means that you are living way beyond your means and you do not have enough resources to keep and maintain your lifestyle.
4. You couldn’t Spend At Least 6 months Without Income:
If you could not spend at least six months without your income, then you are not doing well financially. Generally, the amount of money you have in reserve depends upon how long you are going to be un-employed. So always try to save as much money as you can for the bad days.
5. You are not saving much:
Research shows that you have to save at least 15% of your monthly income for your retirement purposes. If you are not saving money at the end of month, this means that you are not living within your means.
These are some of the indications that will show up when you start to spend more than you earn and you do not save money. Try not to follow these things because these things will disturb your financial life badly.
Husain joined Opendoorloan as a Finance Consultant in June, 2011. He is accountable for all aspects of payday loans online as well as Finance, which includes Financial, Corporate Services and Instant loans.