I just got paid, and I'm already broke! I'm pretty sure there are plenty of individuals who feel this way, but why? The average American is struggling to make ends meet each month, with 59% of U.S. adults saying they live paycheck to paycheck, according to a recent survey from Charles Schwab. Honestly, living paycheck to paycheck could be one issue as a result of why you are already broke after getting paid, or it could be that you are living above your means. You may be asking then, Janee, "How do I know if I'm living above my means," Well, let's break it down.
You know you are living above your means when;
You received your paycheck, and more than 70% of the monthly income is going towards bills or some other expense, (rent, utilities, shopping, etc.)
Your bank account is in the negative after paying bills.
You're continually using overdraft protection to cover expenses.
You routinely need a payday loan to hold you until the next paycheck
You are spending more than you're saving
You are having a hard time finding out how you're going to pay the necessities of life
With just a little attention to your budget ratios, you can prevent this from being your story too. Because here is the reality of life; unexpected events WILL happen. When that unforeseen event occurs, your tire blows out, and the check engine light comes on, or maybe you have to travel for the passing of a loved one, you want to be in an excellent position to handle these responsibilities without the added stress of lack of finances. Ask yourself, "would I have enough income or enough in savings to be able to cover that?"If the answer is "no," this may be a sign that you are living above your means.
Now listen, there is nothing to be ashamed about because I've been in a few of these categories. I think we've all been their, right? But now we know that there is an excellent opportunity for you to balance out your budget ratios; so you can live the life you have always wanted. It is time to reestablish our mindsets, start putting some things in motion so that we don't have to rely on "systems" like ODP and PayDay loans, that are set up to keep you in a systematic poverty-stricken routine. Struggling and living above your means doesn't have to be your story anymore!! Until next time,