You may not know it, but you
may have already started to live beyond your means. You always have that
notion that you are earning something relative, that should be able to
pay for the bills, buy food and purchase the things that you want. But
you may already be living beyond your means and already walking towards
bankruptcy.
But if you are really not sure you are
overspending, here are indications by experts that could tell you that
you are not spending your money wisely.
Experts say there are tendencies you are
over spending when at month end you have maxed out all your credit cards
and your salary is all busted on those goodies you have been buying on
credit prior to month end. Now, it’s time to borrow from close friends
and family members for some extra cash- you know you have been “sucked”
low once you’ve reached this level. On the other hand if friends and
family members have either cut off the purse strings or refuse to take
your calls, then they’re tired of lending you money. You’re probably
just as tired of asking and guilty of over spending.
Experts also predict that if on a regular
basis you observe that when you withdraw money intending to use it for a
specific purpose and before the due date you notice the money has
either “evaporated” from your wallet or reduced, unless you are being
beset by a persistent pickpocket, it is likely you have lost a grip on
your spending. Whenever you are in a position where you do not know
where your money is going, whether it is a bank balance that seems to
drastically drop over a matter of days, or cash you withdraw that seems
to evaporate, you need to take a long, hard look on your spending.
If you are spending all your salary
every month, it is a sign that you are living beyond your means, experts
say. It could even be possible that you are spending part of your
savings. Check your budget and calculate how much you spare for your
savings account. If you realize it is less than five percent, better cut
costs on different things especially on luxurious spending. You are
equally expected to set aside at least 10-15 percent of your gross pay
for retirement.
Equally, experts say you may soon run
into financial crisis if you spend 25 percent your salary on outstanding
debts. Spending more than 25 percent of your salary on debt means you
are either cutting costs in other things or just spending more money.
Unfortunately, the latter always happens.
Recognizing the difference between
spending on needs and wants is equally vital in taking control of your
spending. Experts say spending money on something you do not get any use
out of, is the same as throwing money in the bin, but in fact most
people do this on a regular basis without even knowing it. Most people
have set up direct debits or standing orders long ago with good
intentions, for example a gym membership, health plan, or cinema
membership, but have never got to utilize these amenities to the full
benefit. For example you might have gone to the gym for the first few
months but then let it go by the wayside – but there’s still a regular
amount coming out of your account every month to pay for these amenities
you do not utilize, then evidently you are over spending.
ODINAKA MBONU
No comments:
Post a Comment