Stop living from paycheck to paycheck and start living within your means.

Are you living from paycheck to paycheck and spending more than what you realistically bring in each month? According to the data collected by the Federal Reserve Board, about 6% of Americans who are using their credit cards are spending more than they can afford. Are you one of these people? Here are some telltale signs that may help you determine if you are among those who are living beyond their means. 

You can’t survive for six months without your job’s income. If you don’t have enough savings stashed in your emergency cash reserve fund to tide you over for six months without your job’s income, then you are definitely spending more than you can afford. 

Your mortgage payment is more than a week’s salary. If you are paying more than a quarter of your monthly salary for your mortgage, you really can’t afford it. The same holds true if you can only afford to pay for your home based on a 30-year fixed mortgage scenario.

You can’t pay for your car within three years. You’ll know that you are buying a car that is way out of your budget if you can’t pay for it in full within three years. In the same manner, if you are refinancing your car loan to reduce your monthly payments, then you have purchased a car that is way beyond your budget.

Your credit card balance remains the same for over a year. Considering the fact that credit card debt is very expensive, maintaining the same balance for over a year is a clear indication that you are spending more than you can afford. 

You use one credit card to pay for another card’s balance. Using a new credit card to pay for another card’s balance and yet failing to get out of the rut you are in is another sure sign that you should take a more in-depth look at your spending habits. 

You pay an overdraft fee every three or four months. Have you ever been charged with overdraft fees on your checking account simply because you do not have sufficient amounts to cover a check or debit card payment? If you have been routinely charged with such fees, then you are in serious trouble.  

Living from paycheck to paycheck is not a fun way to live. Take a more honest look into your finances and spending habits and make the necessary changes to break your bad money habits. Do it before it’s too late.