Tuesday, July 23

Are You Ahead of the Average American? 10 Financial Signs to Check

These are the financial signs to check and see how you’re doing in this inflation: 

“Money, money, money / Must be funny / In the rich man’s world” there go the lyrics from the famous band of the 70’s, Abba. And they’re 100% relatable to today’s world. I know that we talk a lot about money on this website but don’t be so quick to dismiss this article yet! Trust me, it’s full of uplifting content that you won’t want to miss.

While a lot of Americans are worried about their finances and that they won’t be able to retire comfortably, and pay the mortgage, rent, or other monthly expenses, there are some financial signs that you should be looking into to see how you’re doing. Who knows, maybe you’re ahead of the average American!

financial signs
Photo by Inna Dodor from Shutterstock

1. You own a house

One of the financial signs that shows you’re in a good place right now is if you own a house. If your mortgage has been paid off, you’re in a very fortunate financial situation. Having your own house gives you security and drastically lowers your monthly costs. This means you can put aside money for other expenses or even for the emergency fund.

I know it’s sad to say this, but in today’s world, not many Americans can accomplish this milestone. So if you can check this off the list, then consider yourself lucky!

2. Your emergency fund is secured

One is financially secure beyond the average American if they have an emergency reserve large enough to cover three to six months’ worth of living costs. There are always going to be unforeseen circumstances in life, and sometimes these might result in unforeseen costs.

Keeping up such a fund separates you from many others who live paycheck to paycheck by showing your goals and disciplined saving practices.

3. Your retirement savings look good

Congratulations if you have already started saving for retirement! It’s a wise financial decision. Having a generous retirement fund is one of the financial signs you’re probably doing better than you thought!

The use of compound interest, which may greatly increase your savings, is one advantage of starting your retirement fund early. Your retirement years will be more comfortable the earlier you start, so don’t waste time. Every buck counts!

4. You’re able to afford health insurance

Are you able to afford health insurance? That’s amazing because this is one of the financial signs you’re doing great, and you’re better than a lot of Americans at this moment. A lot of people are struggling with getting a decent program for a little money, so if you can afford this without worrying too much about it, you’re better off than many.

5. You’re paying off debt and avoiding accumulating new debt

If hearing the word “debt” scared you a lot in the past and you did your best to get rid of it, then you’re great! What is with this debt burden? Well, your financial stability can be severely impacted by debt, particularly if it keeps piling up. But if you managed to pay it off, you’re definitely headed in the right direction if you’ve also been able to quit the habit of taking another one.

Saving money and having quite a bit of financial stability is vital, especially during this inflation. But can you do that if your wage isn’t that big and you’re also not willing to sacrifice the little things in life? Well, it is hard indeed, but it’s not impossible! If you want to save a bit each month without impacting your lifestyle too much, check out this amazing book.

How to Save Money: 25 Step-by-Step Tips on How to Save Money by Cutting Unnecessary Expenses Without Sacrificing the Quality of Your Life is available both in audio format, which is easier to listen to everywhere and in Kindle format for less than $5. 

financial signs
Photo by Vitalii Vodolazskyi from Shutterstock

6. You have a fund for your children’s college years

It is a sign of financial stability to have a college fund for your children. The expense of education puts a heavy strain on many American families. The fact that you can save for this indicates that you are more financially secure than other people.

7. You’re following a budget

Financial success depends on having a budget, but building and sticking to it is the key to success. You understand the significance of wise money management if you have a budget that you regularly follow.

As long as you are proactive and aware of this, you should be OK, even if you periodically need to make adjustments to your budget to account for unanticipated costs. In those cases, when you really need some extra cash, it’s ok if you take some from the emergency fund. After all, it’s an emergency! Just remember to put them back.

8. You have multiple sources of income

One of the best ways to guarantee financial stability is to have several sources of income. It demonstrates that you’re not only depending on one source of money if you’ve made the effort to develop many revenue streams.

Multiple sources of income can come from a side job, a freelancing project, or various investments. A variety of sources of income can help you boost your earning capacity and withstand financial storms. In addition to your main source of income, having a side business, investment income, or rental income indicates that your finances are in good shape.

Having an additional source of income besides your pension, salary, or social security puts you ahead of the average American.

9. Your credit score is pretty good

If you can brag about your credit score by saying that you don’t have any late payments and that you don’t max out your credit cards, then you’re awesome. It means you’re super responsible from a financial point of view.

10. Your financial goals are on point and your main focus is to reach them every month

Setting a clear financial goal helps you see the big picture and make the most of your money. While it can be challenging at times, it’s important to be consistent and add money, no matter if it’s less than the previous month in your economy account.

Depending on what you want to achieve, financial goals are long-term, like saving $1 million for retirement or a new vehicle, and short-term, like saving for the emergency fund. Other objectives can include saving for your children’s or grandchildren’s college or paying off your home. Congratulations if you believe that you’re making progress toward these objectives!

Conclusion:

While financial stability can take time, it can be very satisfying when you reach the goal. If you’re a beginner in this field, start everything with baby steps; set goals; don’t try to rush things; and most importantly, be patient! If you can proudly check off at least four of these financial signs, then congratulations! You’re clearly heading towards financial success.

Are you kind enough to share your financial journey with us in the comments section below? If so, feel free to do it because we’re all eager to hear it.

You may also want to read: 6 Simple Budget Tips for People Who Don’t Make Enough Money

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