CHICAGO, IL--(Marketwired - Apr 18, 2013) - As part of BMO Harris Bank's ongoing commitment to financial literacy and Making Money Make Sense, BMO Harris is providing weekly financial tips. This week's tip helps you identify if you are living a lifestyle you can't afford.
Many people are living just one crisis away from financial disaster. For some people it's because they live paycheck to paycheck or just don't have enough put away in savings. But there are others who live beyond their means and carry an overwhelming amount of debt, which could eventually spell disaster.
BMO Harris Bank gives you the five signs you may be living beyond your means:
You're not saving enough. If you find that you're consistently saving less than 5 percent of your take-home pay each month, you need to look at how you can change your spending and saving habits. It's important to have money put away in savings -- for peace of mind, and so you can avoid resorting to credit during an emergency.
Your credit card balances are rising. If you can only pay the minimum balance, yet you continue adding to your debt, there's a good chance you're in over your head.
Your credit score is dropping. If your once near-perfect credit score has dropped to a 680 or below, something isn't right. Did you skip a few bill payments? Or, has your debt-to-credit ratio recently increased? Whatever's behind the shift, it's important to start making changes to get your credit score back in the healthy range.
You can't afford essentials. When groceries, basic household items and gas are suddenly a financial burden, it's a sign you're overextended. Working with a budget can help you track your income and help you understand how you're spending your money.
You have to use a new loan or credit to pay off old debts. It's a major red flag if the only way you can pay off your loans or credit is by taking on additional debt. However, there is one exception to this rule -- taking out a home equity loan or line of credit to consolidate credit card debt may actually help your finances. You may be able to get a lower interest rate on the loan than what you're currently paying on your credit cards.
If one or more of these scenarios sound familiar, you may want to get back on track financially.
Put yourself in a comfortable place and get started with helpful steps.
The Learning Center is brought to you by BMO Harris Bank, WGN, CLTV, WGN AM 1070, Chicago Tribune, RedEye and Hoy.
About BMO Harris Bank
BMO Harris Bank provides a broad range of personal banking products and solutions through over 600 branches and approximately 1,300 ATMs in Illinois, Wisconsin, Indiana, Kansas, Missouri, Minnesota, Nevada, Arizona and Florida. BMO Harris Bank's commercial banking team provides a combination of sector expertise, local knowledge and mid-market focus throughout the U.S. For more information about BMO Harris Bank, go to the company fact sheet. Deposit and loan products and services provided by BMO Harris Bank N.A. Member FDIC. BMO Harris Bank(SM) is a trade name used by BMO Harris Bank N.A. BMO Harris Bank is part of BMO Financial Group, a North American financial organization with approximately 1,600 branches, and $542 billion in assets (as of Jan. 31, 2013).