Here are some signs you are living beyond your means

  • If you can't sock away at least 5 percent of your pay and build an emergency fund to cover at least six months' worth of expenses, you're overspending.
  • Pay off credit cards every month; high interest rates are a long-term budget-buster.
  • If you run out of cash before each payday, consider cutting back.

Apparently, living beyond your means isn't that hard to do these days.

It seems more and more we are living in an age of consumption and "stuff" and YOLO ("you only live once") and FOMO ("fear of missing out") attitudes. And although it is very easy to live beyond your means, it can be really difficult to dig out from the damage you'll do to yourself by living this way.

Here is a list of five ways you may be living beyond your means.

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Living beyond your means?

1. You are not saving at least 5 percent of your income. You should save more like 10 percent to 15 percent or even 20 percent of your income. But if you can't save at least 5 percent, you're likely living beyond your means.

2. You use your credit card but don't pay it off in full every month. It's so easy to swipe that plastic without realizing how quickly the balance is growing. Even with small purchases, the balance will continue to creep up. Then, when the bill comes and you've charged more than you can afford to pay off, you're paying interest on money you've already spent. You're using the credit card to "afford" things you really can't.

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3. You have no emergency fund. If you can't afford to save enough money to build up a fund of at least six months of your spending needs in case of a job loss, then you are living beyond your means and need to cut back and get the emergency fund set up.

4. You use your credit card for vacation because you don't have the cash to pay for it. Then you're paying off your credit card over the next several months after you've returned from vacation. If you can't afford to pay for it up front, you are living beyond your means.

5. You run out of money before your next paycheck. You "float" your lifestyle on your credit card until you get paid. You need to make your lifestyle fit your paycheck or do something to get a paycheck that will fit your lifestyle.

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There is really just one way to fix these problems: sacrifice and delayed gratification. It's not easy, but all of these problems are fixed with sacrifice. You give things up in the short term to be successful in the long term.

Just look at each one of the above. If you cut back each month and don't go out to eat or to the movies, or you spend less on a hobby or whatever it takes for you to spend less, you will have more that you can save to:

  • Invest for your future.
  • Pay off credit cards.
  • Build your emergency fund.
  • Pay for your vacations before you go.
  • Have enough cash to last until your next paycheck.

(Editor's Note: This column originally appeared at

— By Ed Snyder, president of Oaktree Financial Advisors

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