Many of you will remember comedian Jeff Foxworthy and his famous, “You Might Be a Redneck If….” bits. Here are a couple for old time’s sake:
“If you own a home with wheels on it and several cars without, you just might be a redneck.”
“If you have a complete set of salad bowls and they all say Kool Whip on the side, you might be a redneck.”
Here is my not-so-funny list of “You Might Be Living Beyond Your Means If….”
You are not saving at least 5% of your income. You should save more like 10% to 15% or even 20% of your income, but if you can’t save at least 5% you’re likely living beyond your means.
You use your credit card but don’t pay it off in full every month. The balance will continue to creep up. You’re using the credit card to “afford” things that you really can’t.
You have no emergency fund. If you can’t afford to save enough money to build up a fund of at least six months of your spending needs in case of a job loss, then you are living beyond your means and need to cut back and get the emergency fund set up.
You use your credit card for vacation because you don’t have the cash to pay for it. Then you’re paying off your credit card over the next several months after you’ve returned from vacation. If you can’t afford to pay for it up front you are living beyond your means.
You run out of money before your next paycheck and have to “float” your lifestyle on your credit card until you get paid.
There is really just one way to fix these problems:
Sacrifice and delayed gratification. It’s not easy but all of these problems are fixed with sacrifice. You give things up in the short term to be successful in the long-term. Just look at each one of the above. If you cut back each month and don’t go out to eat, or to the movies or you spend less on a hobby or whatever it takes for you to spend less, you will have more that you can save to:
Invest for your future
Pay off credit cards
Build your emergency fund
Pay for your vacations before you go
Have enough cash to last until your next paycheck