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8 Signs You’re Living Beyond Your Means
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8 Signs You’re Living Beyond Your Means

by programmerAugust 10, 2015

Saving up is hard. Money dwindles the moment you receive them, one portion to loans, one portion to rental, one portion to parents, and so on, until what you’re left with is a small fraction of your total salary.

You may feel justified to spend it all, but don’t do that. Live within your means with the aim to become debt-free someday. Are you spending beyond your means? Check out these warning signs below and decide for yourself.

1. You Don’t Have Any Savings Account

The lack of a financial cushion is one of the biggest signs that you’re living beyond your means. In the event of unemployment, sudden emergency or unexpected illness, money in the bank can be used to sustain you and your family.

savings account
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But many people tend to spend all their money instead of saving up. So break this habit immediately to free up cash, no matter how small the amount, for a financial cushion.

2. You Can’t Pay Your Bills On Time

Forgetting to pay for your bill is one thing and can be forgiven, but not having enough money to pay your bills on time means you are financially overextended. Examine your spending habits closely and make necessary adjustments to solve this problem. Maybe you shouldn’t be making weekly visits to salon and spa for massages.

3. Housing Expense Ratio is Above 28%

housing loan
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The percentage of your income spent on your rent or mortgage is referred to as your housing expense ratio. Your monthly mortgage payments should not 28% of your monthly income when you live within your means. Based on this, if your monthly income is RM5,000, your mortgage payments should not exceed the amount below:

Monthly Salary (RM5,000) x 0.28= RM1,400

Of course, you can get still cut back elsewhere and get by a higher ratio percentage. That’s a dangerous line to walk, though, so exercise caution.

4. You Borrow Money All the Time

savings account
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If you are living within your means, you should be able to support your lifestyle without asking for hand-outs from parents or borrowing money from siblings or friends. When you are constantly asking for money from other people, it is time to adjust your lifestyle to suit your income without going into debt.

5. You Use Credit Cards to Pay Other Credit Cards

When you are using credit cards to to pay off household bills and utilities, or even worse, another credit card’s bill, that’s a huge red flag. Transferring balances from one card to another does not reduce your debt simply because you are not actually paying anything down.

6. You Only Pay the Minimum Monthly Payment

savings account
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If you only pay the minimum due on your credit card every month, or if you only send in a small contribution towards the principal balance, you are most probably in over your head. In this situation, take it easy on the credit cards.

Even if you can’t afford to pay off the balance entirely, try your best to put a dent in the total balance. Paying only the minimum will not do you any good, as you will be paying hefty compounding interest rates.

7. You Buy Things You Can’t Afford

It’s normal to want nice things. But when you are spending all your money on the things you want and not need, you risk end up living paycheck to paycheck. When you have to dig into your pockets to afford basic necessities like food, that’s really tough. So always have a budget when you want to buy something.

If you can’t afford it, save up first or simply don’t buy it. A good rule to stick with is that if you can’t afford to pay cash for it, you shouldn’t buy it.

8. You Spend More than 25% of Your Income Eating Out Each Month

Malaysians love their food whether it’s street food or restaurant experience. Have you calculated how you spend on eating out every month? If the amount is more than 25% of your monthly income, you are definitely living beyond your means.

savings account
Image via Flickr


A super busy schedule doesn’t mean you can’t cook a simple meal at home, or prepare healthy snacks that are quick and easy. Having a proper meal planning can save you a lot of money in the long run.


Do any of these signs ring a bell for you? If they do, it’s time for you to change your lifestyle before it’s too late.

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