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!
