1. You are not saving at least 5 percent of your income. You should save more like 10 percent to 15 percent or even 20 percent of your income. But if you can’t save at least 5 percent, you’re likely living beyond your means.
2. You use your credit card but don’t pay it off in full every month. It’s so easy to swipe that plastic without realizing how quickly the balance is growing. Even with small purchases, the balance will continue to creep up. Then, when the bill comes and you’ve charged more than you can afford to pay off, you’re paying interest on money you’ve already spent. You’re using the credit card to “afford” things you really can’t.
3. You have no emergency fund. If you can’t afford to save enough money to build up a fund of at least six months of your spending needs in case of a job loss, then you are living beyond your means and need to cut back and get the emergency fund set up.
4. You use your credit card for vacation because you don’t have the cash to pay for it. Then you’re paying off your credit card over the next several months after you’ve returned from vacation. If you can’t afford to pay for it up front, you are living beyond your means.
5. You run out of money before your next paycheck. You “float” your lifestyle on your credit card until you get paid. You need to make your lifestyle fit your paycheck or do something to get a paycheck that will fit your lifestyle.