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5 Signs That You Are Living Beyond Your Means

EH Law Group Aug. 9, 2023

Today, many Americans now have access to credit cards, personal loans, and payday loans. While these tools can be a lifesaver during emergencies, many people end up overspending without thinking about what they can actually afford. Unfortunately, living beyond your means can make you rack up debts and put you into financial instability. 

According to a new CNBC Your Money Financial Confidence Survey, nearly 58% of all Americans are currently living paycheck to paycheck. If you're concerned about the disparity between your income and expenses, consulting with a practiced California bankruptcy attorney may be beneficial to get experienced financial advice. 

At EH Law Group, we're committed to offering reliable advocacy and personalized legal counsel to clients in debt relief and bankruptcy-related matters. Our dedicated legal team can assess your unique financial situation, determine whether you are living beyond your means, and offer you some insightful tips to help control your spending. We're proud to serve clients across San Mateo, Oakland, Daly City, South San Francisco, and Santa Clara County, California. 

5 Signs That You’re Living Beyond Your Means 

A person may be said to be living beyond their means if they are spending more money than they are actually earning. Essentially, many people are able to live beyond their means by relying on personal loans, prior savings, and credit cards. Here are some signs that you may be living beyond your means: 

You Are Not Contributing to Savings or Retirement 

One of the obvious signs of living beyond your means is your failure to save out of your income or contribute to retirement savings. Unfortunately, not having any savings can put you into financial hardship anytime you experience life's financial curveballs. An unexpected job loss, medical problem, or emergency situation can disrupt every aspect of your life, including your family. 

You Are Making Minimum Payments on Debts 

Generally, the credit provider expects you to make minimum payments on time in order to maintain good standing. Unknown to you, your interest charges will cause more debts to accumulate in your account. In the long run, you will be trapped in a debt cycle. This will ultimately hurt your credit rating. 

Your Credit Score Is Dropping 

Furthermore, your credit score will keep dropping if you fail to pay your bills on time or incur a lot of expenses. This shows that you're living above your means and unable to repay your debts. However, lenders will check your credit rating to determine whether you're creditworthy and if you'll repay the loan before approving your credit application. If you have a poor or bad credit score, getting future loans will be extremely difficult or almost impossible. 

You Exceed Your Budget Regularly 

Having a budget is a good financial habit that allows you to monitor your spending decisions. This is why it is often advisable to make and follow a budget. If you fail to create a budget, you may be unable to track your expenses or even put any money aside as savings. Likewise, if you exceed your budget regularly, it will only be a matter of time before you experience financial hardship. 

You've Been Hit With Overdraft Fees 

However, when you don't have a sufficient amount in your account to cover your debit card payment, you may be charged an overdraft fee. Repeated charges for overdraft fees may be an indication that you're living beyond your means. This might be a great time to monitor your spending and improve your financial habits. 

An experienced attorney can examine your unique financial circumstances to determine if you're living beyond your means and educate you about the next steps to take to improve your situation. Reach out today and get our support.  

What You Can Do 

If you are concerned that you may be living beyond your means, you should take the following steps where possible: 

  • Look for spending patterns that may exceed your budget. 

  • Set a budget and stick with it. 

  • Determine where you can cut back on your expenses and spending. 

  • Eliminate any additional or needless expenses. 

  • Make certain lifestyle changes. For instance, spend less and save more. 

  • Make saving part of your income or putting into your retirement accounts a priority. 

  • Consolidate any loans, if possible. 

  • Pay down your debts. 

  • Get a side hustle or seek additional sources of income. 

  • Live below your means. 

  • Set financial objectives for future success. 

  • Consider filing for bankruptcy or speaking with an attorney to understand your options. 

A knowledgeable attorney can determine the right steps to help take charge of your finances and help you make informed decisions. 

Ready to Take Back Control?

When feeling overburdened with debts or concerned that you're living above your means, getting knowledgeable financial advice is crucial to take back control of your finances. With over 30 years of combined experience, we have the diligence and expertise to advise and guide clients in their financial matters. As your legal counsel, we can craft a solid plan to improve your financial situation or explore your other possible options to achieve debt relief, including filing for bankruptcy

Contact us at EH Law Group today to schedule a simple consultation with reliable bankruptcy lawyers. Our dedicated legal team can offer you the brilliant advocacy and personalized legal counsel you need to make intelligent decisions about your finances. We're proud to serve clients across San Mateo, Oakland, Daly City, South San Francisco, and Santa Clara County, California.