Improving your personal finances, buying only what you can afford and cutting out unnecessary expenses is very important.

It’s very easy for people to live a lifestyle beyond their means, especially since we live in a time of doing almost everything online and making fast decisions because #YOLO!

Many of us want to have things that we are not able to pay for because we want to live a lifestyle we can’t afford. Unfortunately this will not just leave you with lots of crippling debt, but it will also damage your overall well-being.

Here are 5 red flags that you’re living a lifestyle you can’t afford:

1. FOMO dictates your spending 

If you always feel the need to buy stuff you can’t afford or don’t even need because you want to fit in or because you don’t want to miss out then I’ve got news for you; you are living beyond your means! 

"If you have to hide or lie about your spending habits, it means you are spending over your limit."

2. Your credit card balances are rising

If you only afford to pay the minimum payment due on your credit card balance and you end up taking longer to pay off your debts, then you should know there is a problem. Ideally, you should only buy what you can afford at the end of each month.

There is definitely no harm in owning a few credit cards, but if you have high outstanding balances, then you are in trouble. 

Read more: 9 small ways to save your hard-earned money

3. You hide what you buy 

I hate to admit it but I've been guilty of this... I have bought new shoes and bags and then hid them so my family wouldn't know because I knew I didn’t need and couldn’t afford them. 

If you have to hide or lie about your spending habits, it means you are spending over your limit.

"Always set up a budget and follow it."

4. You don’t have money left at the end of the month 

According to Totallymoney.com, you can avoid this by following these few steps:

- At the beginning of each month pay some money into your savings account as if you’re paying any other bill. You'll never save if you wait until you have money left over, since you'll never have money left over.

- Keep a diary of where your money goes each month. This will help you cut on unnecessary spending

- Try to spend money on necessities only for a whole month and cut out everything else 

Read more: Can you actually survive on a minimum wage of R3 500?

5. You’ve never set a budget

Budgeting is important because it allows you to  create a spending plan for your money. It also gives you control over your money and keeps you focused on your financial goals.

If you don’t budget it becomes difficult for you to keep track of your spending and you can end up spending more than you make and rely on debt to cover necessary expenses. Always set up a budget - AND THEN FOLLOW IT.

Read more:

5 things you should stop wasting money on

4 types of people you should never lend money to