Ten ways to know you're living beyond your means

Do you get that sinking feeling just before payday when you find that you are down to your last fiver? Are you relying on the trusty overdraft to finance your living costs towards the end of the month?

Do you get that sinking feeling just before payday when you find that you are down to your last fiver? Are you relying on the trusty overdraft to finance your living costs towards the end of the month?

If you’ve answered yes to either of these questions and it is happening frequently, you could overspending without even realising.

32% of the 96,334 clients counselled at CCCS in the first half of this year had no "appropriate" solution to repay their debts, meaning that they were in a “deficit budget” situation. This means that there is more money going out each month than coming in.

You could find yourself in the same situation if you constantly bury your head in the sand and keep overspending.

Before you get to this point, quiz yourself on these common traits we see at CCCS when counselling clients, to find out if you’re living beyond your means:

Checklist

Not knowing where your money has gone

This is easily done if you don’t stick to a budget. For budgeting help, use lovemoney.com’s free online banking service, so you can track everything you spend whenever you visit lovemoney.com to read this blog. Alternatively, use the CCCS MoneyMatters tutorial to get help tailored for your money needs.

Behind on priority bills

Do you find yourself paying off the credit card bill before making sure that the priorities are up to date?  Make sure that bill such as mortgage/rent, council tax and utilities are paid before unsecured debts and non essentials. Snowballing may be helpful if you are trying to pay off debt.

Visiting the cash machine to withdraw money from your credit card

There is usually a fee for doing this so not only do you have to pay back what you have spent but interest and charges on top of this. Read up on ways to Stretch your salary by £500 this month instead.

Not opening statements

You go to open the kitchen drawer and a pile of unopened envelopes fly out! It might be hard to stomach at first, but start opening and reading the statements. Believe it or not, there are reasons to rejoice in opening bills!

Up to the limit on your credit cards

You get to the checkout and your credit card is rejected - you hadn’t realised that there was no credit left. As above, if you don’t read your statements, you know less about your financial wellbeing.

Scared to check your bank balance

You’re reluctant to check your bank account because you’re hoping it’s not bad as you think. Ask for a mini-statement from a cash machine or keep on track with online banking.

Living in your overdraft

You may think that because you pay it off each month that it doesn’t matter – but could you live without it? Try to reduce it a bit each month. One easy way to do this is to stop paying interest on it and put the money you would have paid in interest towards paying off your debt. Read 5 ways to get an overdraft for free to find out more.

Only making minimum payments on credit cards

If you’re doing this it could take you years to repay what started off as a small debt. As we mentioned last time, a £1,000 debt could take you more than 33 years to clear.

See it, want it, buy it!

Is your wardrobe bulging with purchases you have never worn and will never need? You just can’t resist a bargain!  Be ruthless and have a clearout. You could get some extra cash by selling on auction websites.

Not shopping around for the best deals

Do you automatically renew your insurance policies without checking to see if you can get it cheaper elsewhere? Follow these Two simple rules for cheaper insurance.

Finding a solution

If you think you might be in a deficit each month and would like some budgeting advice you can visit our charity’s online advice facility Debt Remedy.  Alternatively you can call our free helpline to speak to one of our trained debt counsellors on 0800 138 1111. Lines are open Monday to Friday, 8am – 8pm.

Tell us your own tips

If you have any tips on how to get out of a deficit budget or you’ve managed to reform your spending habits we’d love to hear from you. Feel free to post your thoughts.

More: The hidden costs of your food bill | Credit reports explained