In this age that we are living, it has become very easy to attract people to live beyond their means. Be it a car or a house, the common term that people use is EMI, and nowadays even for goods like mobiles and cameras. We all are made to think in EMI terms for everything we buy. This makes you feel that it is affordable; especially when you’re buying a car or a house the agent or broker only influences you to shell out more than you can afford. It’s just good for business.
Here are some indications to check if you’re living beyond your means.
If people who have lent you money are now raising the interest rates or if people are hesitant to lend you money:
When people become a little skeptical about a person if he will be able to repay the money he/she had borrowed, it only suggests that the person has spent money which he/she is unable to repay.
Your credit score is falling:
When there is more number of loans than which you can actually repay, it eventually brings down your credit worthiness and in turn bringing down your credit score. This denies you of any more loans or credits from banks and credit card companies.
Your saving is less than one-thirds of your salary:
It is told by financial experts that one-thirds of your salary should go towards savings, one-third towards investment and the last one-third towards your expenses. If a person is unable to meet this and his/her saving is less than on-thirds of salary, then too much is being spent on investment or expenses.
Too much from your salary is going towards EMIs:
If more than 30 percent of your salary is going towards EMI payments, the remaining earnings should be used to manage all the others, savings and expenses. This might become difficult to manage as the major part of going towards EMIs.
Having no emergency funds:
Losing a job can be one of the biggest nightmares a person can go through. In such situations, if there are no backup funds, even the smallest of expenses would become difficult to pay for.
If you’re staying in your parents home:
If you’re doing this in order to save some expenses which you might incur living independently, you should start thinking that you may be living beyond your means.