1. You're carrying a credit card balance from month-to-month
If you have a high credit card balance and pay just the minimum each month, you can take this balance for years while spending a lot in interest. You might also want to make more purchases on this card since it already has a balance.
The fix: Try to make double payments and stop using the card until the debt is gone.
2. You stress about bills
Monthly bills should be standard and fixed into your budget. You should be able to pay them easily without any stress.
The fix: Look at your monthly budget and find ways to cut back.
3. You can't save 5% of your monthly income
If you can't save at least 5% of your monthly income, you're living beyond your means.
The fix: Trim your expenses and restructure your budget to include at least 5% for savings.
4. You don't have emergency and rainy-day funds
Ideally, you should have an emergency fund to cover major unexpected expenses and a rainy-day fund for small expenses you can anticipate.
The fix: Start building your funds by putting away as much as possible each month.
5. Your mortgage payment eats up more than 30% of your monthly income
Most financial experts agree that your monthly mortgage payment should not exceed 30% of your take-home pay.
The fix: You have two choices here:
- Find ways to boost income. Seek a raise at your current job, freelance for hire, or find another side hustle for extra cash.
- Scale back your mortgage payments. Consider refinancing. [Speak to a home loan counselor at Elevate Credit Union to see if this is right for you.] If your mortgage is crippling your budget, consider downsizing to a smaller and less expensive place.
6. You lease a car you can't afford to buy or finance
Can you afford to pay for or finance your vehicle? If the answer is no, you're in financial trouble.
The fix: Downgrade your vehicle to a vehicle you can afford. It might be a little tight at first, but it is temporary. Remember, once you are back on track, you can save for what you want.
7. Your friends' spending habits influence your financial decisions
Thanks to the hyper-sharing culture of social media, the pressure to keep up with the Joneses is stronger than ever. If you make financial decisions based on your friends' choices, you're likely spending more than you can afford.
The fix: Stop looking over your shoulder and keep your eyes on your life and wallet.
If you're over your head or need more guidance, we can help! Stop by today, and we will be happy to guide you from any financial stress or get you to a point where you can be pleased with your budget. We help people in all stages of their financial lives. Set up your appointment today here: Free Budget Counseling.