You’ve probably heard of the “You Only Live Once” mindset. And you’ve probably heard of the “Fear Of Missing Out” mindset as well. These YOLO and FOMO attitudes can be detrimental to your financial health and stability! Fun comes before importance. Too many people follow this, and because they do, they are living beyond their means. Here are 5 ways to tell if you are one of these people.
Lack Of Savings
Life happens. Life will throw you a financial curveball or two. Have you made adequate preparations for when this happens? The time to think about what you will do is NOT when you are going through it. It is before it happens. Living in the moment and buying what you want when you want it – and neglecting your savings account – is a sign you are living beyond your means.
You should be savings at least 5% of your income – preferably more. If you cannot do this, you are living beyond your means.
Related: Should I Open A High-Yield Savings Account?
Paying For Vacations and Other Non-Necessities With a Credit Card
Paying with a credit card for extravaganzas because you do not have the cash for it is a sign you are living beyond your means. Most credit card interest rates are between 15% and 28%. How much more are you paying for that vacation because of interest?
Cannot Pay Off Balances In Full Every Month
Every month, you have a credit card bill due or a loan payment due. If you find yourself in a bind and repeatedly cannot pay off your balance in full, you are living beyond your means. This is especially true if you can only make the minimum payment. Continually using your credit card while making minimum payments will cause your balance to grow. This will hurt your credit score.
Living Paycheck To Paycheck
If you repeatedly run out of money before you run out of month, you are living beyond your means. Finding yourself paying for necessities like groceries on your credit card is a big red flag!
Related: The One Key To Getting Out Of Debt
Spend To Keep Up With The Joneses
This wraps up the above in a nice little bow. You are paying for extravaganzas with a credit card because you can’t afford to in cash. You have a lack of savings, and you cannot pay your balances off in full every month. AND if you are doing all of this because you feel you have to keep up with the Joneses, you are living beyond your means.
You may earn enough to feel justified in spending the way you do, but if any of the above are true, you are still not in control of your spending.
Related: Is Your Debt Out Of Control?
Final Thoughts
No, not everyone who has the FOMO and YOLO mindset are living beyond their means. And not everyone who is strapped for cash has this mindset. However, if you are one of the many who suffer from FOMO and YOLO, please start being mindful of where your money is going, know your priorities, and get your financial health in order.
There is nothing wrong with a little humility. If you want to hang out with friends, suggest something free or cheap to do. If need be, there is nothing wrong with saying “I just don’t have the money to do that right now. Instead, can we ______?” You must sacrifice a little in the short run to have the stability in the long run.
If you need help taking back control of your money instead of having your money control you, please reach out to us today and schedule your free initial consultation. Don’t let money stress and anxiety keep you from another sleepless night!
