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More signs you may be living beyond your means

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Laura KampsLast week we shared five signs you may be living beyond your means. Here’s a few more scenarios to look for that may mean it’s time to take a good look at your spending habits.

  1. I have paid late fees more than once in the last year.
  2. I spend more than 28% of gross income on housing. Some lenders may allow their customers to borrow as much as 35% of their income, but historically, 28% has been the rate at which the average person can make their payments and still enjoy a reasonable standard of living.
  3. I have bad credit or have been denied credit. A low credit score signals to lenders that you’re in over your head. Even if you’re approved for new lines of credit or a home mortgage, your future interest rates will be much higher. A poor credit score can also affect your insurance rates.
  4. I have used my savings to pay off debt.
  5. I pay my bills with credit cards. If you’re using credit cards to pay off basic bills like utilities, groceries, or worse, other credit cards, take action right away. You may need to reevaluate your spending habits, get an additional job, and/or seek help from a trusted advisor to make a plan. For credit counseling services, visit the National Foundation for Credit Counseling (www.nfcc.org) to find a member agency.

By taking control of your spending you can enjoy peace of mind and financial happiness. What steps have you taken to make sure that you live within your means?

Laura Kamps, RIS Specialist