Signs you're living beyond your means

Hi guys. Hope everyone is doing okay and those of you up north are staying warm with the snowy weather. You guys have gotten stingy with your comments on randoms :(. Yes, I'm pouting like a baby! I look forward to getting other pov's on some randoms and I get a big fat nothing. Wah!

Hehe, anyways money is a major source of wahala for almost everybody. Thought I'd share this list (and some excerpts) I came across on Yahoo.

1. You couldn’t survive financially without your job’s income for at least six months.

• In its 2012 annual financial literacy report, the National Foundation for Credit Counseling (NFCC) found that two out of every five adults (40%) said they were saving less than the prior year, and 39% didn’t have any nonretirement savings. 
• Generally, cash reserve need is based on how long you expect to be unemployed if you lose your job. Three months of expenses is reasonable, six months is ideal – particularly for self-employed people and those with volatile incomes
• “Bottom line, based on your skills (presuming the individual is not already retired) how long would it take in this market to find another position with similar income,”

2. You’re saving less than 10% of your pay. 

•  This is a general guideline. “If you haven’t been saving at least 10% of your income for retirement since age 25, you’re not saving enough,” Garrett says. And if you’re over 35, you should tuck away more than that.
•  Assuming a 4% withdrawal rate during retirement, someone who starts saving at 25 and retires at 70 needs to save 7% of earnings to achieve an 80% replacement rate at retirement. But if you’re planning to retire at 65, you’d need to save 15% of your income.

3. Your mortgage/rent payment is more than one week’s salary.

• The one-week salary figure is a rough guide and “means that your mortgage payment would not be more than one-quarter of your income
• Another way to think about this one is you’re probably living above your means if more than 35% of your income (a more-forgiving number) goes to into your home (rent, maintenance, upkeep, mortgage)

4. Your credit card balance has remained the same for the past year.

• Simply holding your own (where your balance remains the same) is a good sign you’re living beyond your means, and if your balance grows each month, you’re way out of bounds.

5. You buy big-ticket items through interest-free, deferred-payment offers because you think you’ll be able to afford it next year.

• These retailer deals involve no monthly payments for a certain period of time (usually a year) or no interest on payments made during the promotional period. But if you fail to pay for your item in full by the set deadline, you’ll get hit with sky-high interest charges. And it’s common for interest to be charged to your account from the date of purchase. If you can’t afford to buy it now, will you be able to later?

6. You use one credit card to pay another credit card’s balance.

7. You pay an overdraft fee on your checking account every three to four months or more.

• One-off overdraft situations aren’t necessarily an indicator [of living beyond your means]. It’s the ongoing, repetitive nature of overdraft fees that will signal a problem

8. Before buying something, you often think, “I know I shouldn’t, but…” 

• "I know things are tight, but I need to take that vacation, it's for my mental health," or “I work so hard, I deserve that new flat-screen TV.” Sound familiar? “That's really rationalizing what you know is not a good idea for you… Like a spa day or expensive dinners out. I don't often hear that from people who are comfortable financially, but more so from those who are struggling,” Baehr says.

Any of these helpful?

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Have a wonderful weekend!