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Money Minute
Quick Tips
Living Within Your Means
Money Minute
If you’re living paycheck-to-paycheck, you may be living beyond your means.

You might have a budget, and you might even have an emergency fund, but despite this it may still feel like you’re living paycheck-to-paycheck. If this all sounds a little too familiar, you may be living beyond your means. Here are a few warning signs to look for.

  • If your credit score is low, it may indicate you’re over-extended. Typically, scores can range between 300 – 850. However if your score in below 580, this can be considered to be in the lower range. Credit scores factor in many things, including whether or not you can pay bills on time, as well as how much credit you’re using. If you have a history of late payments, or if you’re using a large percentage of your available credit line, this might mean that you’re over spending.

  • Consider whether or not your housing expenses are reasonable. Some experts suggest keeping overall housing costs below 30% of your take-home pay. This includes not only your mortgage, but also property taxes and homeowners’ insurance. If you’re beyond your limit, it might be worth considering a less expensive housing option.

  • If you are living within your means, you should be able to set aside some money regularly for savings and retirement. But if you’re struggling, it may be time to relook at your budget and consider some disciplined cost cutting. Ultimately, this may require some significant changes to your lifestyle.

Be honest with yourself when it comes to what you can comfortably afford. If your goal is to live within your means, you don’t want to stretch too far.

The information on this page is provided for educational purposes only and is not tax, legal, financial planning or investment advice. Neither the information nor any opinion expressed in this section constitutes an offer to buy or sell any securities or advisory products. The information provided is general and is not information reasonably sufficient upon which to base an investment decision and should not be considered a recommendation to purchase or sell any particular security. You should not regard this information as a substitute for the exercise of your own judgment. Investing involves risk.

Past performance does not guarantee future results. © Ariel Investments, LLC. This website and all of its content is for informational and educational purposes only and should not be considered to be investment advice or a recommendation to buy or sell any particular security. The mutual funds offered by Ariel Investment Trust are distributed by Ariel Distributors, LLC, a wholly-owned subsidiary of Ariel Investments, LLC. Use of this website is subject to our Terms & Conditions. The Ariel mutual funds referred to in this site may be offered only to persons in the United States. This web site should not be considered a solicitation or offering of any investment products, funds or services to ineligible investors, investors for whom such products, funds or services are not suitable, or investors outside the United States.

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