by Ann E. Smith

Created on: August 20, 2009

In today's society, many people live far beyond their means. Bachelorette parties entail full days at the spa. Vacations are spent at the most luxurious hotels. Teenagers' closets are lined with luxury jeans.

But these things are not bought the old fashioned way - by planning, saving and paying in cash. Instead these people charge all kinds of things on their credit cards, including basics like groceries.

And then they pile up debt, as they cannot afford to pay off what is charged each month. This scenario is a classic example of how people live beyond their means.

Are you guilty of such behavior? If so, are you living in denial? Below are a few ways to tell if you are living beyond your means. And if you fit this profile, it's never too late to do something about your situation and turn your life around!

* Spend more than what is earned

Simply put, people who live beyond their means spend far more than they earn. They may have all kinds of excuses, but the bottom line remains the same - they cannot afford the lifestyle they have adopted.

Oftentimes, people start getting in trouble when they have kids. They want their kids to have all of the things the others have, regardless of their means to accommodate this desire.

No matter how it starts, though, once people get behind due to splurging too often, they find it very difficult to stop. Things snowball and debt can grow quickly.

* Borrow from Peter to pay Paul

When a person gets in debt, he faces many challenges. Instead of paying off this debt and making sacrifices to do so, he often continues spending more and more.

Soon he is putting a second mortgage on his house to pay off his credit card balances. In essence, he is borrowing from Peter to pay Paul.

Instead of solving the problem, he is letting it snowball. This pattern occurs frequently for people who are living beyond their means. They often get caught up in short-term thinking instead of addressing the real issues and doing what it takes to stop the cycle of overspending.

* No nest egg

People who are fiscally wise save up for a rainy day. They not only put money into retirement funds, but they also put aside monthly money for a nest egg.

Those who live beyond their means fail to save in this way. Instead, they live in a state of chaos - always trying to catch up from behind. Or they live in denial. They fool themselves into thinking they will one day win the lottery or make lots more money, and then their increasing debt problem will be solved.

Some people just refuse to think about it, until things are totally out of hand. They spend and then spend some more, and continue on a downward spiral toward financial disaster.

If any of these scenarios describe you, then your lifestyle may need some major changes. If you are stuck in the cycle of living beyond your means, your best bet is to seek professional help and try to stop the cycle. It is not going to disappear, so the sooner you take action to face it, the better.

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