7 Top Warning Signs You’re Living Beyond Your Means


In our consumer and debt-heavy society, living beyond your means is all-too-common.

Living Beyond Your MeansAnd unfortunately for us, it can put us in tricky financial situations and consumer debt.

Considering how easy it is to impulse buy online and use credit cards, we end up spending more than we make.

This process has become so normalized, that we overlook the financial dangers, neglect long term goals, and live a lifestyle that can be too expensive for our own good.

While it may seem okay because so many are living beyond their means, it shouldn’t mean you need to endanger your own financial priorities.

Below are a few warning signs you should watch to ensure you are not living beyond your means.

To Live Beyond Your Means: Someone who is is living beyond their means is spending more money than their current income allows. This immediately can put your finances at risk by increasing debt, not having enough for bills, and not being able to save any money.

1. You Notice You are Living Paycheck to Paycheck

78% of full-time workers said they live paycheck to paycheck (CNBC)

Now, this might not signal right away that you are living beyond your means. You might be underpaid, living in an expensive area, or have some other financial circumstances putting you in this situation.

However, a lot of times you may be upgrading your lifestyle or just overspending, which causes you to barely squeak by every pay period.

Take a step back, look at your paycheck and track your expenses to see where your money is going every week. You may discover that there are areas where you can spend less.

When you start to live within your means, it will help you begin to escape the paycheck to paycheck slump.

I’ve been there before and it’s not fun. Even though I was only making $36,000/year at the time, had I not been overspending on my lifestyle and started budgeting, my situation could have been different.

Extra: Are you underpaid or feel you are not making enough money? It might be time to ask for a raise. Here’s how to get the money you deserve.

2. You Have Little Saved or No Emergency Fund

One thing I roll my eyes to in most personal finance articles is when they talk about having an emergency fund. We all should know it’s important to have one and we all do typically want to save money.

Yet, as much as I did not want to include this here, it needs to be added. You might be living beyond your means if:

  • Your emergency fund cannot cover at least 3 months of expenses
  • You are not putting aside any money consistently each paycheck for your emergency fund
  • You currently do not have one


This is why it is critical to look at your overall spending, find where you are making mistakes, and start to correct those bad money habits.

Not everyone is going to be able to save a big percentage of their income, but try to find 5-10% of each pay to put aside. After one year working on your savings plan consistency, you’d be surprised how much you will have put aside.

3. You’re Carrying a Balance Each Month on Credit Cards

I’m guilty of this one in the past, but I was living beyond my means at the time. Credit cards are great for building credit, getting some rewards points, and can help you out in an emergency.

But, too often we use it to buy things that are beyond our means and impact our financial success. Now you end up carrying a balance month to month. This signals that you’re certainly spending more than you can afford.

While you may be making monthly payments, you probably continue to use that card to rack up more of a balance, and you get hit with high interest rates.

Start making double, triple, or extra payments each month to get caught up and put your credit card away to avoid use until you have a debt management plan and get your spending under control.

If you are tempted to buy a higher priced item, ask yourself if you have the cash to pay it off right away. If you don’t, keep the credit card in your wallet.

4. You Aren’t Saving For Retirement (Or Can’t)

Not everyone is able to save for retirement at certain points of their lives. Many also struggle to provide for their families and put food on the table.

So the thought of putting money aside for retirement is usually an afterthought.

But for those taking expensive vacations, always getting the latest tech, or upgrading to a luxury vehicle, but have not saved for retirement — you are living beyond your means.

I’m all for treating yourself and spending money occasionally, but only if you are already saving for an emergency fund and also save for retirement. Then by all means, upgrade to the latest vehicle and go on a vacation.

I don’t want to tell you how to spend your money either, but saving for your financial future earlier is better than the temporary satisfaction you get from possessions or a vacation.

Note: I’m all about chilling and taking a vacation, but the key is to learn about prioritization of your spending first. I recommend creating a separate vacation savings account and chip a percentage of your paychecks away for this. Try a high-yield online savings builder account with CIT Bank, which will get over 2% on your money and is FDIC insured.

5. You Worry About Paying Bills Constantly

We’ve all worried about paying bills in our lives at some point, unfortunately. It’s a part of a life.

But the goal should be that you are not losing sleep or stressing constantly about them.

If you find yourself constantly stressed out about bills or how you are going to pay them, you might be living beyond your means.

I say “might” because again, everyone’s situation that is reading this might be different.

Many might be living below their means, yet are still worried about money. I hope to provide more insight and content about those situations as well in the near future.

But, if you always have the most expensive items and are struggling to pay recurring monthly bills or get out of debt, it’s a pretty clear sign you are living beyond your means.

6. You’re Paying Too Much for Your Mortgage or Rent

Many times, we bite off more than we can chew, which can put us in some financial hurt.

When I was living on my own, I could barely afford everything including rent. I was totally living beyond my means and had no real money management plan.

For housing, just because a bank gives you a loan or says you can afford this much more, doesn’t mean you should do it. You need to be proactive and do some math yourself. (I know, I know, math?)

I’ve seen various numbers for a 30-year mortgage, but generally, you should not spend more than 30-35% of your monthly gross income. Obviously, the lower the percentage the better.

Check out this calculator on HomeLight to figure how much house you can afford.

Renting an apartment is pretty similar too, although I’ve seen this more in the 35-40% range. Again, I’d recommend keeping this closer to 30% if you can. It helps if you live with a significant other or roommate(s).

Zillow has a nifty rent calculator to determine how much you can afford based on your gross income.

7. You’re Trying to Keep Up With The Joneses

You’ve probably heard the phrase, “Keeping up with the Joneses” before.

If not, it simply means what you are try to match or surpass what your friends, family, colleagues, or neighbors have. It could be just the fear of missing out too.

This phrase has been around a long time, but with social media, we have quicker access to everyone’s possessions, homes, traveling, cars, or apartments.

Many people buy things to then post and seek validation. Thus, causing others to feel the need to keep up with what their friends are doing and buying.

But this is what gets you to overspend, start making bad financial decisions, and can put you in unnecessary debt.

When you start comparing yourself financially, remember:

  • Try to ignore what others have and stay focused on you
  • Realize that most of those people are also financially struggling or in massive debt
  • Ask yourself, “Will upgrading or worrying what others have, make me happier?”



What To Do If Your Are Living Beyond Your Means

If you are living beyond your means, don’t panic or get frustrated! I’ve been there and plenty of people have. I

t’s completely normal and the first step is realizing that you are indeed doing that and wanting to change your personal finances for the better.

Not everyone wants to admit a financial problem or take initiative to improve it. But, below are a few simple steps you can take if you are living beyond your means.

  • Dedicate time and prioritize living within your means.
  • Create a plan to reduce your expenses (cancel memberships, ask for price reductions on bills, use coupons, etc.). Be more frugal if you must.
  • Start to downsize and minimize (Save money by downsizing where you live, sell items you don’t need, buy less material items)
  • Start budgeting more thoroughly. Build a simple budget to stick to (Spreadsheets work great).
  • Start paying yourself first (automate if you need to). Meaning, when you are paid automatically send money to your savings first.


The above tips are actionable items that will depend on your mentality and patience.

You’ll have to want it bad enough to make changes and to realize changes do not happen overnight.

Final Thoughts

It doesn’t matter if you are middle class or even a high-earner, you can still live beyond your means.

How many times have we heard the story of millionaires going bankrupt? Or those who never made more than $50,000/year retire comfortably? Plenty!

Living beyond your means can grip any demographic and any level of salary, it’s your mentality that can make the difference.

If you find some or all of the above warnings a constant in your life, then you probably need to make some lifestyle changes.

Were you or are you living beyond your means? Are there other signs that may signal lifestyle inflation too? Let me know in the comments below.

This post was previously published on investedwallet.com.


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