One of the factors that cause many individuals and families to fall deep in debt is that they live beyond their means.  Living beyond your means is a term used to describe a person that uses money from credit cards or bank loans to live a lifestyle that they wouldn’t be able to live without the help of these loans.  If you are living beyond your means, here are some tips on how to create a home budget and dig yourself out of debt.

We live in a consumer society, we are judged daily on what products we buy and what items we own.  It is very easy for many people that might not have a large salary or savings to use credit cards and bank loans to buy the things that they want.  Unfortunately, using credit cards or loans to purchase items that they really don’t have the money to buy usually comes back to haunt them. 

If you are living beyond your means and have several credit cards, think about closing a few accounts immediately.  This will reduce the likelihood that you continue to use credit cards to make purchases.  Many times people who live beyond their means only stop using their credit cards once they hit their maximum limit. 

If you are living beyond your means, the most important thing you can do is create a plan of action on what items you will buy during the month and be disciplined not to spend any extra money.  In a few short months, many people that are living beyond their means can get back on track with their finances and find themselves digging themselves out of debt.

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If you think you are living beyond your means, there is definitely one way to tell – create a home budget.  It is extremely easy to create a budget, just jot down all your expenses that you pay per month and total it up, jot down all your income for the month and total it up and then see the difference between the two. 

If you have a lot more income than your expenses, you are probably doing ok and at most can make sure you are putting away that extra money into a savings account or an investment, however if your expenses are more than your income, you are probably living beyond your means and need to immediately cut down on your expenses or increase your income.
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How to Create a Budget