In our spend-now-worry-later society, even people earning a comfortable income can fall into living paycheck to paycheck.
Living without enough security to cover bills or emergencies if your income stops is a common problem for people across all income levels, according to a 2017 study by CareerBuilder. The study found 78 percent of American workers are living paycheck to paycheck.
With high housing, child care and other costs, making it until payday can be a challenge. And in a society driven by debt, there's constant temptation to live beyond your means.
But Brian Ramsay, a financial adviser with WealthSpan Partners in Davenport, said developing new money habits can make a difference in reaching financial security, no matter your income level.
Here are some signs you may be living beyond your means and tips on rethinking your money habits.
You're not saving
If you reach the end of the month and haven't found extra cash to put aside in savings, it's possible you're living beyond your means.
Without a financial cushion, losing a job or source of income can be detrimental, especially for low-wage workers. And while saving can seem nearly impossible, especially for those surviving on minimum or low wages, Ramsay said there are ways everyone can cut back and save.
Financial advisers suggest saving around 15 percent of your income, whether it be for retirement or in separate savings accounts. If you can't afford to save 5 percent of your income, it's time to consider cutting expenses in your budget.
Spend the time to create a budget to track your money coming in and going out. Once you've realized your money habits and spending patterns, look at where you can cut on expenses, whether it be going out to eat or impulse purchases.
Ramsay said everyone should "pay yourself first," meaning you should budget to save at least 5 percent before any other expenses.
Your housing costs take up too much of your income
The high cost of housing stretches the paychecks of even high-wage workers.
It's easy to fall into a trap of overspending on housing, especially in areas where affordable, convenient housing is difficult to find. But financial advisers suggest housing costs — including rent, mortgage payments and insurance — should not exceed 30 percent of your take-home pay.
If you're spending half of your income on housing, it's time to find ways to earn more money or adjust your living situation, such as finding a roommate.
You don't have an emergency fund
A major red flag signaling you may be financially insecure is you don't have money set aside for emergencies.
In 2017, the Federal Reserve Board found around 44 percent of households could not cover a $400 emergency expense. If you're in that group, car problems, medical expenses, the loss of a job or any other emergencies could cause you to go deep into debt.
Advisers have said an emergency fund should be separate from other savings accounts. If you can't build up an emergency fund — start with $1,000 and then work up to a few months' worth of expenses — then look at your budget and figure out where you can cut costs.
You spend for entertainment
If you're guilty of impulse shopping or "retail therapy," it's possible you're overspending.
Ramsay advises consumers to ignore fads and the temptation to "keep up with the Joneses."
"The main thing is don't develop bad habits. Do you really need those high-end, brand-name things?" Ramsay said. "People think they need the newest BMW or whatever it is. But I think those brand name things can hurt you over time."
Ramsay also suggests looking at your budget to see how small expenses, such as that cup of Starbucks every day, adds up. And, check yourself when thinking about major purchases or going on vacation. If you can't cover the costs immediately, the debt burden might not be worth the trip.
"I think the key to managing your cost of living is having good habits in the very beginning," Ramsay said. "The more frugal you teach yourself to be, the more prepared you're going to be as you progress in your career. And, unfortunately, when people do get a raise, they often find something new to spend their money on. Instead, take that higher wage and apply it toward savings or an emergency fund."