It was not that long ago that the prospect of any major purchase, be it a new home or car or even a television set, was a major consideration for the average American.
Savings, careful budgeting, and sacrifice were the name of the game.
Then came credit and everything changed.
Today, wanting something new is and having it is as easy as pulling out a small plastic card and worrying about the repercussions another day.
It's a slippery slope however and habitually buying that which you cannot afford has a major psychological effect on a person who soon becomes "unable" to cut back on their style of living.
We've all heard the term "champagne taste on a beer budget," but how do we tell if that is the case for us? Here are five hints to help you find out: You Know What an Overdraft Fee Is Because You Routinely Pay It There is really no excuse to overdraw on your bank account.
If there is no money there, then don't use it.
However, if you have absolutely no idea how much money is in your bank account and/or cannot get through another billing cycle without taking the risk that there won't be any money, it's probable that you are living beyond your means.
You've Had to Skimp on Essentials Ever eaten Ramen for a week straight because you didn't have the money to buy food until your next paycheck? What about choosing between paying the rent and paying for your car? These items need to be the first on your list of bills and yet when people saddle themselves with too much credit card debt they are the first to go.
Your living expenses need to be covered before any luxuries and if you still cannot afford them, then it's clear you need to reevaluate your lifestyle choices including the car you drive or the place where you live.
You Cannot Remember the Last Time You Used Cash for a Purchase If every pay check you get is already spoken for, that is, there is no cash left after all the bills are paid, then you have a problem.
Not only are you failing to save for your distant future, but in the event of an emergency you are dooming yourself to just take on more credit card debt.
You Use Debt to Pay Debt While credit card companies make it alluringly easy, using cash advance or balance transfer on a new credit card to pay other debts and bills is rarely a good idea.
Not only are the interest rates on these methods much higher than even normal credit cards, there is often a fee to even access the money.
Though these methods take the immediate burden of bill paying away, they bite you in the end.
There Are Some Credit Cards You Cannot Even Use If you have maxed out even one of your credit cards, you are obviously living beyond your means, but there are other consequences, too.
Aside from the fees that you pay a credit card company anytime you charge over your limit, you hurt your credit score incredibly since your available credit compared to your debts directly impacts FICO.
This not only limits your ability to get a loan, but any loan you do get will likely have interest rates that are through the roof.
Fixing the Problem Though living beyond our means is epidemic in American culture, there are some real, actionable steps that you can take today to decrease your own tendency to do so.
First, make paying down debt a priority.
Think of it before you consider saving and before you purchase anything you don't need.
Next, consolidate your debts.
This is different than using debt to pay debt.
Instead, it is systematic, often part of a greater plan and condenses all the little bills you have into one, big chunk which reduces the likelihood of missing a payment and may actually reduce your interest rates compared to all the loans on their own.
Finally, get help when you need it.
Financial planners and/or debt councilors are there to help you and may even be available for a free consult.
It's always best to look at your specific situation before making any rash decisions and they are the best people to give you this specific advice.