Lots of people spend more than they earn. It’s very easy to get sucked into living a lifestyle you can’t afford, especially when the people in your social circle are all high-earners. If you do, though, the penalties are huge.

Here are some signs you are living beyond your means. Ignore them at your peril.

You Pay for Groceries on a Credit Card

There are some good reasons to put everyday expenses like groceries on a credit card. For one, some credit cards pay loyalty points for every pound you spend, so it makes sense to use your credit card for everything and then pay off the balance in full the following month.

The same applies to a short-term loan to cover an emergency. If handled correctly, a short-term loan is cheaper than an unauthorised overdraft. For example, there’s Cash Lady who offer short-term loans for people with bad credit. They work with established FCA regulated lenders for your peace of mind. It’s cheaper than paying astronomical bank charges.

However, if you are putting everyday expenses on a credit card and only ever paying the minimum balance, it’s a red flag warning sign. Repaying the minimum balance means your debt mountain is growing higher by the day, especially if you keep spending like there’s no tomorrow.

Your Mortgage/Rent Payments are Astronomical

An Englishman’s Home is his castle. It’s only natural to want to live in a nice house or flat, but if you’re spending way over the odds to live in a veritable palace when your income is peanuts, it won’t be long before the bottom falls out of your world.

Most lenders won’t lend more than four times your salary, so your mortgage is no more than 25% of your income. This is sensible. These days, tough new lending criteria mean it’s very difficult to find a lender willing to lend above that, but if you are stuck with mortgage payments of 50% or more than your income, the situation is unsustainable, and you need to move somewhere cheaper.

You Can’t Afford a Holiday, but You Book One Anyway

Holidays are great. It’s a chance to kick back and chill for a week, away from the pressures of life and work. Unfortunately, however, they are an expensive luxury, even in the modern age of package holidays and budget flights.

A family package holiday to Spain for two adults and two kids can easily set you back £2500+ if you go all-inclusive. That’s a lot of money for one week. In the old days, our parents saved up all year for a holiday. And if they couldn’t afford one, they stayed at home. These days, we are more apt to splurge on a holiday to the Caribbean, putting the whole lot on a credit card. Not sensible.

Rein in the Spending

Create a budget and start looking at ways to cut back. If you are a spendthrift, there are probably numerous things you can save money on. Reduce your monthly expenditure and try and consolidate your debts, thereby reducing the monthly payments. With a change of attitude towards spending, you can turn your life around!