Surprisingly it is incredibly easy to end up having a lifestyle that exceeds your financial means. If you don’t watch yourself, you will spend money that you do not own and this will end up becoming a disservice of sorts to your future financial well-being.

Below I’m going to go over some signs that indicate that you are living well above your financial means.

1. You Are Easily Pressurized Into Going Out For Parties And Celebrations

Peer pressure is a real thing, and many people feel forced to attend events they do not want to attend simply because they cannot say no or talk about their financial circumstances.

While many other people are living above their financial means, it doesn’t mean that you should riddle yourself with debt. Rather you should think of ways through which you can politely say no if you’re not comfortable disclosing your financial situation to everyone.

2. Your Savings Are Less Than 5% Of Your Income

No matter if your job pays you peanuts or gold coins, there should be a certain percentage of your salary going into your savings every month. Ideally, your savings should be at least 20% of your income, but if they are less than 5% of your income, it signifies that you are overexposed to any emergency like a job loss or a health problem.

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Every kind of savings counts, no matter if you make a cash or a 401k saving. It is best to save as much as you can in whatever way you can.


3. You Have To Pay An Overdraft Fee

An overdraft fee is another sign that you are spending a lot more money than you have. It is best to divide expenses into categories that make sense to you and create a small budget of sorts for every major expense you have to take.


4. You Have Never Had A Budget.

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If you’re someone who doesn’t run by the budget and then finds themselves in a huge mound of debt towards the end of the month, I have some news. You will most likely never achieve your financial goals if you do not change your approach to managing money.

Making a budget in writing and living by it is essential in helping you realize where your money goes and it also helps you create long-term financial plans. Budgeting is a very useful exercise that can help you realize where you stand. Once you become more aware of your spending patterns and habits, you can effectively break free of them.


5. You Have No Emergency Fund

I’ve said this again and again, that you ought to have emergency funds saved somewhere.

It is very vital to have funds set aside as it will aid you in solving predicaments that may arise in the future. it means that you will not have to borrow money or go into debt to remedy whatever situation you may have found yourself in.

Talk about settling medical bills, car repair, and so forth.

when the Covid 19 Pandemic struck, many people lost their jobs, the economy sunk deep, some guys went into depression as a result of that, businesses weren’t doing quite okay. For those who were clever enough to set aside funds meant for an emergency before, perhaps they didn’t feel as much heat as compared to those who had no funds set aside for an emergency.

If you haven’t learned anything from this pandemic, then you should.

6.  More Than 50% And 30% Of Your Income Goes Towards Paying Your Bills.

If we go by the 50/30/20 budget rule, it states that 50% of your income (after tax ) should go towards paying for necessities /needs. These are things you can’t live without, like for instance, rent/housing, health, food, water, transportation.

30% allocated to wants. these are things you can live without. They make your life more pleasurable, talk of monthly TV subscriptions, smoking, constant shopping, drinking beer.

20% allocation is for savings and debt management/clearance.

Talk of contributing towards savings for an emergency fund, retirement.


7. You Are Overly Dependent On Your Credit Card For Everything.

Now, spending with your credit cards is cool if you know your limits, in return, you get cash backs, reward points, and bonuses.


then again, spending with your credit card may be tempting if you don’t know your limits. You may overspend on things you don’t  need. Keep in mind that nothing is free because, at the end of it all, there will be interests incurred if you exceed your limits on credit cards.


 8. Your Credit Score Is Below 600

Your credit report is a running record of your routine payment history and your outstanding credit balances. A score below 600 is a good score; however, when you get into a car accident and need to buy a new car, the options will be very limited.

With a credit score below 600, an unexpected expense can easily become a great stress source






9. You End Up Settling For a High-Interest Rate Loan.

Here, we talking about interest rates you end up having to take in cases where you need to take out loans on big items like cars, mortgages, college education, and so forth. Well, the peak in interest makes a noticeable difference here.

You ought to be sure of how you are going to utilize the loan. You must ask yourself questions like,

Is it for investing? or you are only going to add more liabilities

what are the risks involved?

Is it worth it?

I’ve witnessed folks taking out high interests loan, they go on to purchase a car just because they noticed someone close to them driving a new car.

Later on, they regret their decisions as a result of expenses that comes with servicing the car loan as well as the car. If you can settle for a low-interest loan, the better.


10. You Spend Most Of Your Month Anticipating When Your Next Salary Will Come In.

In other words, this means you are living paycheck to paycheck.

Honestly, I’ve been in this situation too, you kind of find yourself paying all the bills and debts you have incurred over the past month and remaining with nothing at the end of it all. This is barely 3 days after you have received your monthly paycheck. You’ve exhausted all your cash until you have nothing set aside for any unforeseen events, no savings, no investments.

Then when all of sudden an emergency occurs, you have to borrow money from financial institutions, family, or even friends to remedy your situation, thus plunging into more debt.

You wait for the next payday to pay debts, you borrow again and the cycle continues that way.

The solution to this,

You need to avoid unnecessary spending as in spend on things you need, more so, use cash if possible and avoid credit cards.

Using cash means you will spend within limits or you spend the cash you have while using credit cards means you may be tempted to spend more than the cash your credit holds. This creates more debts that you have to pay later.

Another solution is to get a side hustle if it’s possible, expand your sources of income, and invest so that you aren’t dependable on your monthly salary.


11. You Are In Debt For A Task You Could Do Yourself.

ln life as human beings, we possess numerous skills and talents that if put to the test, may be beneficial for us.

Some of the skills are either learned in schools or on the streets, and no one can snatch that away from you.

For instance, let’s talk about the closest person to me, my wife. She’s got the skills of preparing special dishes for special events like birthdays, weddings and so forth.

Now, since she’s able to cook these kinds of dishes, is it necessary to hire someone else to get the job done?  No!

Therefore, no need to pay for this service, and no need to get into more debts. she can use these skills to her advantage, like for example, she can start a side hustle, take on some gigs out there like baking for a fee. Proceeds from these gigs may be used to pay a debt, save and invest.

Talk of other skills like painting, cleaning. if you can do this by yourself, then theirs no need of hiring someone else.


12. You Live Close To Work, You Can Walk, Yet You Spend Money On Gas.

Now, don’t get this the wrong way, some guys who ain’t in debt, live close to work, they still drive to work. Am not talking about them, am talking about those guys who are in debt, they live close to work, they can walk, and yet they still spend money on gas by driving to work/hiring a taxi.

Look, you need to sit down, calculate how much money you are spending on gas each day,  compared with how much debt you owe.  Use that money spent on gas to clear your debts, and even save and invest.

In a nutshell, there are many benefits of living close to where you work, like for instance,

  • You get to work on time.
  • Boasts your productivity
  • You get to spent more time with your family thus improving your relationship with both your family and your employer.
  • You save money on gas.


13. You Often Have To Ask Your Family And Friends To Pitch In With Your Bills.

Well, unfortunately, am guilty of this too, and trust me, man, it’s not fun especially if you are borrowing constantly from family and friends.

l really can’t despise the fact that you may have friends and family who are well off financially, but just keep in mind that it will reach a point where they will ignore your apatite for borrowing to support your lifestyle.

Do not wait till that day, you ought to take control of your finances right now.


Living above your financial means is very common nowadays,  it can happen to anyone predominantly in this evolved world.

The same can be said about living below your financial means. it’s not rocket science, you can manage it if you are committed by having some kind of laid down strategy.

  • Talk of setting aside some cash for an emergency
  • Talk of getting out of debt, saving, and investing.
  • Analyze your spending habits, see where you can squeeze some cash, and don’t spend on unnecessary things.

In the financial world, theirs what we call good debt and bad debt.

Good debt is where you borrow money to fund a project like real estate or business which in the long run generates some income, while 

Bad debt is where you borrow money to purchase liability, talk of assets that depreciate over time. 

talk of:-

  • Vehicles
  • Electronics
  • Furniture
  • Clothes

Just note it is wise to purchase these kinds of things with cash, low-interest loans than high-interest loans.

Recently, my colleague advised me that l should make sure the money that enters my pocket is more than the money that comes out of it.

Trust me, I’ve seen some of my superiors who earn thousands and thousands of cash per annum, drive fuel guzzlers, constantly go out for a weekend to party, and yet they still complain of having money problems.

The opposite can be said for some of my colleagues, who earn less, drive fuel-efficient cars, some ride motorbikes, bikes while some even don’t own these, they use public means of transport, yet I’ve never seen or heard them complain about money.

It doesn’t matter how much you earn, if you want to live below your means, take control of your finances.

It begins with you.

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