Thrifty Thinking: Signs You're Living Beyond Your Means

I was recently out with some guys when someone noticed how expensive the food was, then one of the guys said, "Ballin' ain't cheap." I wondered at that moment how many people say this to themselves in order to live beyond their means. The other guy said, "Yeah - you only live once!" Well all that may or may not be true but if you are living beyond your means - you are going to pay a very painful price for doing so in the not so distant future. My father use to tell me, "Either practice discipline or the world will discipline you!" Here are some signs that you could be living beyond your means.

 

Your Savings Won't Last 12 MonthsWe all underestimate the reality that bad things happen to good people. We have a hard time thinking that it could happen to us. While most recommend having 3 months of savings I would suggest you have at least one year and preferably 3 years of funds that you could use to live life without income.

 

Your House Payment is Only Affordable on a 30-year TermMost people only look at a 30-year term in understanding what they can afford for their home. Start with a 15-year term when considering where you are going to live. If you can't afford the 15 years you probably can't afford to buy the house. There are 15-year fixed mortgages available for under 3%. The difference in monthly payments is only about $400 between that and a higher rate on a 30-year. If the $400 makes the house too expensive what are you going to do when you need a paint job?

 

Vacationing on Credit
This is a tell tale sign that you are living above your means. If you cannot pay cash for the vacation, despite the fact that you deserve to go on it, it means you are living beyond your means - don't do it.   

Make sure you pay the balance down before you’re charged a dime of interest and be realistic about all the “extras” that can add to the cost of a trip, like tips, parking, and baggage fees.

 

Stretching the Term to Afford Car PaymentsI love cars as much as the most enthusiastic but if you have to stretch your term beyond 36 months for a lease or 48 months on a purchase you are buying a car beyond your means. It is not the car dealer’s job to make the car affordable it is your job to pick a car you can afford. By stretching the terms, the bank is the winner and you are the loser.

 

You Paid Over Draft Fees in the Last 12 MonthsIf money is so tight that you have to rely on overdraft protection in order to float your lifestyle, you’re living beyond what you can afford. You probably already knew this one - sorry just keeping it real.

 

You Exceeded Your Credit LimitExceeding your credit limit doesn’t just cost you in over-limit fees. Because your credit score is based largely on your debt-to-utilization ratio, which is the difference in the amount of available credit you have to what you’ve used, your credit score is lowered when your credit balances are high and it signals to lenders that you’re in over your head. If you are approved for new lines of credit - including a home mortgage, your future interest rates will be sky high.

 

You Pay Someone Else to Do Jobs You Could DoYou are without money but you pay someone to do those jobs you don't like to do like clean your house, wash your car, manicure your nails, or mow your lawn. While I think we should all have someone do these things it is only because I would prefer to have you out in the marketplace earning money rather than mowing your lawn. But those that are living beyond their means are watching a ballgame while they pay someone to mow the lawn...

 

You Think a Lower Paying Jobs is Below You or Won't Consider Second Job
If you know you need the money yet you say to yourself, "That job is beneath me" as a justification not to take or consider the job I would bet money you are living beyond your means and most likely need to take this job.  Regardless of what has happened to you in your life there comes a point where we all have to make the difficult decisions and do the difficult task.

 

Other Signs You May be Living Beyond Your Means
You say things like, "If so and so can do it I should be able to" or "everyone else borrows money to do these things" or "I deserve it - I work so hard" or "this is what I work for" and the smack daddy of Pretender Ballers, "we are already so far in debt what's a little more."  

 

Ballin' ain't cheap and the reality is "real" ballers have money stacked away so regardless of what you see them waste in one night or over a weekend it has no effect on their finances. Most people have not used discipline and paid the price over long periods of time or have been involved in enough big deals to accumulate, save and then invest the money wisely so they could roll with swag like a real baller and purchase the front row seat, fly private, or take the last minute vacation to the islands.

Live within your means until you no longer have to worry about it.

 

Grant Cardone is a New York Times best-selling author, star and executive producer of the reality TV show Turnaround King, host of the Cardone Zone radio show and is regularly seen on Fox Business, NBC and Business Insider. He was named the Top Sales Expert and a Top 10 Business Coach to follow on Twitter. He is a regular contributor to a wide variety of publications including Huffington Post, Entrepreneur, Business Insider, and INC Magazine.

A self-made multi-millionaire that literally created himself from nothing, Mr. Cardone is the founder and CEO of three multi-million dollar companies who first hit the sales scene in the car industry by revolutionizing automotive sales and marketing training approaches and dealership processes. He quickly expanded his business consulting and sales training services to a wide range of organizations including Fortune 500 companies, small and medium-sized businesses as well as success minded individuals and entrepreneurs.

Mr. Cardone has written five books (Sell to Survive, The Closer's Survival Guide, If You're Not First You're Last, The 10X Rule, and Sell or Be Sold) since the 2008 financial crisis which provide the principles and techniques individuals must follow to flourish and win. Follow him on Twitter @grantcardone.