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Are you living beyond your means?

Just because you haven’t had to declare bankruptcy doesn’t mean you’re good with your money. Here are some telltale signs you’re living beyond your means.

Couple discussing finances

You support your lifestyle and never have a problem paying for anything, but you could still be living beyond your means. And if you don’t get a handle on your finances, they could spiral out of control. Here are some big signs you’re spending more than you should.

You count on overdraft protection

Your monthly expenses are all taken care of, so everything’s A-OK, right? Not really if you rely on your bank account’s overdraft protection to cover your expenses. Don’t consider that money as yours to use. Plus, you are charged for using it. You should be able to pay your expenses based on your net income.

You hide purchases and lie about what you spend

There’s a reason you feel guilty and the need to lie about what you spend: Deep down you know you’re spending money you shouldn’t or spending too much money on non-essential items.

You’re not putting any savings aside

You should be able to put aside at least 5 to 10 per cent of your net income so you have an emergency fund for unexpected costs. If you’re living from paycheque to paycheque, look for ways to cut down your living expenses so you can have some extra money to put aside for peace of mind.

Your credit card debt keeps growing. And growing

The last time you looked at your credit card statements, the balances weren’t as huge as they are now, and the balances keep ballooning. Sort through your recent statements to see where you’re charging up a storm, and cut back on those purchases. Perhaps you’re dining out more than you used to or adding more clothing and shoes to your wardrobe. It’s easy to convince yourself you must buy that item that’s on sale because it’s such a great deal, but consider how much you’re actually paying for the item by the time you pay it off on your credit card after it’s racked up tons of interest!

You’re not paying your bills on time

Your cash flow is such that you have to pay bills late. This will damage your credit score, and your interest rates will increase. Get a handle on your bills by going through them and noting when and how much is due each month, then make paying them on time a priority. A bad credit score could haunt you down the line when you want to buy a house or need a loan for other purposes.

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