10 Part Series on “Leading A Debt Free Life & Marriage” Part 3 (Continued…) - 6 Ways To Know If You Are Living Beyond Your Income

  

Marriage Alive Digest 10 Part Series on

“Leading A Debt Free Life & Marriage”

Part 3  (Continued…)

6 Ways To Know If You Are Living Beyond Your Income 

Unnecessary debts put a man in bondage and restrict the free spirit you need to excel in life and marriage. In continuation of part three of this series, you can tell if you are indeed living beyond your income by asking the following:

3.       Are You Craving For Credit Regularly?

Credit has become so easy to get to that even student and children are joining the bandwagon. This way, so many people without a means of steady income are bombarded with offers of buy now pay later and easy money.

·        Do you have a rotating balance on your credit purchase?

·        Are you using one credit to pay off another one?

·        Is your monthly credit balance growing instead of reducing?

If the answer is yes, then you are most likely financing living a “beyond your means” lifestyle.

You need to sit and begin to consider your credit purchases and observe exactly what you are buying.

Perhaps it is costly clothing? Maybe it is time to move to a cheaper clothing line.

Have you fallen for the buy now and don’t make any payments until who knows when promos and offers? Now that the payment time has come, are you struggling?

Whatever it is that making your debts to mount, by buying on credit, make a determine decision to quit credit buying.

Draw up a realistic debt repayment plan and do not pick up any additional item on credit until you have paid your balances off and are ready to be an accountable consumer.

4.       Are You Saving?

Saving is truly the foundation of healthy finances, yet so few of us actually save. One of the most common excuses for not saving is, “I have too much debt.”

What people don’t realize is that, unless saving is prioritized, debt will always be an issue.

Our goal should be to set aside at least 10% of gross annual income. Portion of it may go into a retirement fund while the rest to a regular savings account.

While setting saving goals, focus on both short-term as well as your long- term goals. Short-term should include having an emergency fund, 6 months of living expenses, a vacation fund, a Christmas fund, etc.

Your long-term goals should focus on retirement, car replacement fund, and college funds for your children, etc.

5.       Do You Spend More Than 25-30% Of Your Income On Housing?

Buying more home than or rent more than you can afford has been a common trend in amongst people in recent times.

Today, there are schemes where you apply for a land or housing and you pay in installments. This has leads to purchases or borrowing more than can be afforded, and coupled with a stagnant job market, many families are repeatedly thrown into debts.

·        Are you counting on more than one job or two incomes in order to make your mortgage payment or rent?

·        Are you spending more than 35% of your gross income just to pay your monthly note?

·        Would you be in deep trouble if you experienced a reduction in income?

If the answer is yes, you may be paying for more home than you can afford. Here are two simple rules to follow in regards to mortgage payments:

·        Stay within 25-30% of your gross income

·        If you are you a two-income family, buy as if you had just one income. This way you are creating margin in case of a job loss

6.       Are You Afraid To See Your Credit Level?

Do you know what your credit score is? If your number ranges from 500’s-

600’s you have some work to do.

There are multiple behaviors that drive your credit score down, but some of the most common ones are: late payment on credit, mortgage or utilities; using too much of your available credit; and defaulting on your payments.

In order to start repairing your credit you need to stop the harmful behaviours that pushed you to those issues in the first place.

·        Is it habitual overspending?

·        Lack of personal discipline?

Whatever that is, find-out your key reasons and deal with each issue one at a time.

Make up your mind today to be free from the grip of debts. It might look tough; but we can indeed achieve it!