According the US Bureau of Economic analysis, the savings rate of common households have not been this low since the “great depression.” This is a sure sign many Americans are living beyond there means. If a emergency comes up like a loss of job or illness they will be a financial blow to them due to a lack of savings.
If you are worried about your financial situation there is no better time than now to start evaluating your situation. In this article we are going to discuss some telltale signs of living beyond your means.
Sign 1: Your credit score is below 600.
The credit bureaus keep track of your payment history to your creditors. This information is used to generate your credit score also know as fico scores. Credit scores typically range between 300 and 850. The higher your credit score the better terms on loans you get. Typically when your credit score is below 600 you are living beyond your means.
Sign 2: Your credit card balances are increasing
If you are only paying the minimum payment on your credit card balances then you are more than likely living beyond your means. You really should not charge more on a credit card than you can afford to pay off that same month. If you are charging more on a card than you can pay off soon, then you are living beyond your means.
Sign 3: You are saving less than 5% of you earnings
If you are saving less than 5 % you are in danger of having financial problems if someone in you family has a medical emergency. According to the Bureau of Economic Analysis the saving rate starting in 2005 until now has not been the low since 1933. This was during the great depression.
Sign 4: Your bills are getting out of control
Buying stuff on credit has become America’s favorite pastime. Once you rack up a bunch of credit card because you bought a new TV, furniture, stereos, etc….., you may find yourself in trouble. All of this debt adds up quick and bankruptcy could be on the horizon.
Sign 5: More than 32% of your income goes to your house payment
Most lenders like to see your payment to income around this percentage. Some like to see it around 28%, but this percentage is real conservative.
Bottom-line is tour country is in trouble with debt. If you see a problem the best thing to do is recognize there is a problem first. The second step is to stop spending and pay off your debt. If you charge on credit pay it off that month. Stay on top of your credit health and don’t live beyond your means.
CreditScoreQuick.com
