If you’ve clicked on this link then chances are you’re already worried that your spending is out of balance. And if you’re worried, then you’re probably right.
It’s not rocket science. If you’re the kind of person who pulls out the credit card and grabs those impulse purchases without a thought, then you probably are spending too much.
Want to take a good hard look at yourself and your habits? Here are a few red flags for you to think about and measure yourself against.
1. Are you earning good money but your savings are zilch?
You know what you are! Sometimes when your income starts to increase you automatically adjust your standard of living up. And up. Before you know it, whether you are earning $500 a week or $5000, your savings are still a big fat zip.
The trouble with this way of life is that your income doesn’t always stay up there. Stuff happens – job losses, illness, children, changed circumstances – and it’s very, very difficult and quite painful to adjust that standard of living back down.
2. Do you pay for necessities on credit?
Are you buying food and necessities every month on your credit card, because you’ve already spent all your cash? Bad idea! You really should be covering off all your essentials within your budget.
3. Are you late paying bills and finding that they mount up?
Last thing you want is to risk losing those necessities, like power, phone and internet, because you’ve already been out for a big night and now can’t meet your financial obligations. We’ve all seen plenty of people who do this. Can’t pay the rent but somehow manage to outlay a small fortune for that new dress. Hmm definitely not in balance.
4. Are you only ever making minimum repayments?
So your safety net is your credit card, and that is gradually (or maybe quickly) climbing up and up. Each month, all you can do is meet the minimum payment. Well guess what, over time that card is going to cost you a small fortune. You will be paying maximum interest. You are way better off clearing the card each month and taking advantage of the interest-free period. If you can’t manage that, at least bring it down as far as you can each month.
5. Do you come home from a night out, or a shopping spree feeling anxious?
About how much money you’ve spent? Anxiety in this case, is your conscience giving you a kick in the pants. Maybe it’s time to listen. Think about what is really a necessity and what is just a feel good purchase.
6. Are you always trying to keep up with your mates?
Be very careful about trying to keep up with the Joneses. You don’t have the same income, the same goals or the same commitments. Don’t compare. Just make sure you are living within your means.
7. Are you a shopping addict?
Do you take yourself on a little shopping spree just to make yourself feel better? How many of the same items do you have in your wardrobe? How many things do you have hanging in there that still have the price tag on them?? Do you really need more outfits than there are days in the month? Be real and honest with yourself and understand that hiding behind these kind of habits is just going to make life harder and you more miserable in the long term.
8. Do you waste money on dumb stuff?
Smokers I’m talking to you! Or maybe you drink a bit much, or overindulge in other ways. Maybe you love to eat out, but every time you do that you can kiss a good percentage of your budget goodbye. I’m not saying don’t do it,but definitely have some level of control over how much you do it. Takeaways will smash your budget. Shop frugally and cook your own meals. Your body will love you and so will your wallet.
9. Are you living within your means?
Be honest, do you take care of your financial commitments each month and come out with savings at the end? Or is every month seeing you with zero savings and a higher balance on the credit cards? If that’s the case, you need to fix it. You have two courses of action. Only two. Earn more or spend less. That’s it folks at the end of the day. The alternative is mounting debt and stress. Yuk. Don’t take the alternative!