There’s plenty of signs that you're not earning enough money, and learning how to recognize these signs is one of the first steps to getting your money on track. Maybe you want to reach goals and improve your financial outlook. Low earnings can be frustrating, but you can change the situation. Here are seven signs that you're not earning enough money.
1. Using Credit Cards Every Month
If you're using a credit card to make ends meet, this is one of several signs that you're not earning enough. Using a credit card is okay, as long as you can afford the items you buy. For that matter, money experts recommend only using a credit card if you can pay off the balance in full within a month. But if you're using a credit card for essentials like gas and groceries, and you're carrying this balance from month to month, chances are you're not earning enough.
2. Using Savings Regularly to Pay Bills
Savings accounts are supposed to grow, not decline. So, if you're going into your savings account every month in order to make ends meet, you're probably not earning enough money. You need to take a look at your budget and consider ways to trim expenses. It might be as simple as reducing how much you spend shopping each month, or you might have to take a drastic approach and downsize.
3. Borrowing Cash
Needing an occasional loan isn't a terrible thing. But if you're always asking your parents or siblings for cash to pay rent or utilities, there's probably not enough money in your budget to make ends meet.
4. Negotiating Due Dates with Creditors
If you know you're going to pay a bill late, it's always best to call creditors and negotiate an extension. But if you're doing this on a monthly basis, there's a bigger problem. People who earn enough money usually have cash available to pay bills on due dates. If not, this can indicate more expenses than income.
5. You Don't Have Insurances
Many people think insurance is a necessity. But if you're living paycheck to paycheck, it might be a luxury. Health insurance, auto insurance, renter’s insurance and life insurance are important. You may recognize the importance of these coverages, yet you can't afford the premiums. Earning more may put important insurances within financial reach.
6. You Don't Have a Savings Account
If you don't earn enough to cover your monthly expenses, then you probably don't have money in a savings account. You can't save what you don't have. But given the importance of a liquid emergency fund, it's time to brainstorm ways to improve your finances. Reducing expenses is always a good start, but also explore additional ways to make money on the side, such as freelancing.
7. Constantly Worrying about Money
People who have money, or at least enough to make ends meet, probably don't lie awake at night obsessing about finances. It's a different story for people who barely live paycheck to paycheck. But worrying isn't going to fix your situation. You have to get proactive and creative and find ways to drum up extra cash each month. Work longer hours, compare the cost of utilities to save, reduce your transportation budget or go on a spending diet.
If you don't earn enough money, your options are limited. But the situation today doesn't have to be a permanent problem. Create a budget and spending plan to assess how much you're bringing in and how much you're spending. Sometimes, cutting cost in areas like housing, transportation or entertainment can free up cash and help you get ahead. What are other signs you're not earning enough?