Sometimes, it’s challenging to keep your financial situation in perspective. After all, how do you know how “well” you’re doing if you can’t directly compare your situation to other people? Thankfully, I’m here to help. There are many signs that you’re better off financially than the average American; it’s all about knowing what to look for.
If you’ve been wondering if you’re financially well off, today’s the day to determine if your suspicions are correct.
1. You Have an Emergency Fund
For millions of Americans, an emergency fund is a pipe dream. With the average cost of living rising seemingly every year, anybody with a solid emergency savings account should pat themselves on the back.
If this describes you, then congratulations are in order. An emergency fund is the best way to protect yourself against unexpected expenses and unforeseen financial circumstances.
2. You Contribute to Your Retirement Accounts
According to recent reports, nearly half of all American families don’t have a savings account specifically dedicated to retirement, which is an alarming statistic.
I know it’s easier said than done, but planning for your eventual retirement in the far-off future requires diligent planning today. Every day that passes without beginning to save for retirement puts you behind the metaphorical eight ball.
3. You Have a Financial Advisor
Sometimes, you make enough money that organizing it yourself feels intimidating and arduous, so you hire a financial advisor to help relieve the pressure. That’s a good sign for your financial future.
There’s no shame in hiring somebody to helm the financial planning aspect of your life. Most Americans do not have the luxury or means to do so. If you pay money to have somebody else manage your money, you must be doing something right.
4. You Have Passive Income
Passive income is the key to true financial success. There’s nothing better than the feeling you get by making money by, well, doing nothing. Owning property, being a landlord, or owning a successful business is a great way to enjoy a passive income stream.
Earning money isn’t necessarily about grinding, hustling, and working 40 hours weekly. The savviest men and women allow money to come to them without them lifting a finger.
5. You Have Zero Credit Card Debt
As millions of Americans will attest, drowning in credit card debt is no fun. Suppose you are one of the lucky few not to have any credit card debt. In that case, you’re head-and-shoulders in a better financial position than millions of men and women. Be proud of that; it’s easy to abuse credit cards in 2024.
I remember nearly crumbling financially and emotionally when I was younger and found myself struggling with credit card debt. Needless to say, I’m glad those days are over.
6. Your Vehicles Are Paid Off
It’s shocking how much of my monthly income is eaten up by a car payment. Although I currently enjoy a relatively small car payment of less than $300, there have been times when I’ve paid over $600, which significantly impacted my spending habits.
According to recent studies, a jaw-dropping 15% of all new car loans have monthly payments north of $1,000. That’s a shockingly high number. I can’t imagine you’re financially well off if that’s how much you’re paying for your vehicle, even if it’s a high-end luxury car.
7. You Have Health Insurance
Health insurance is prohibitively expensive these days. I don’t blame young men and women for passing on health insurance due to its cost. However, anybody middle-aged or older is rolling the dice by not having it.
It’s a sad state of affairs when something as simple as health insurance is a luxury. Still, in today’s America, it’s something reserved for people who are financially responsible and more well-off than others.
8. You Make Philanthropic Contributions
Having so much money that you regularly give it away to charities and similar organizations is one of the clear-cut signs that you’re better off financially than the average American.
I can’t argue with that logic. I’m one of the most frugal people on the planet, and I cringe just thinking about giving away any of my hard-earned income. Perhaps one day, I can be more philanthropic, but I’m guarding my money like my life depends on it.
9. You Own a Home
For generations, there’s been one defining sign of being well-off financially, and that hasn’t changed in 2024: being a homeowner. Purchasing a home is one of the bucket list items for millions of Americans, but not everyone can afford it.
I have yet to own a home of my own, but I’m hoping to one day move past the endless cycle of paying rent for an overpriced apartment I’ve been in for the past two decades. All I’m waiting for are these pesky mortgage rates to come down.
10. You Have a Diverse Portfolio
Investment portfolios can be the difference between living a comfortable life in retirement and being forced to work well into your 70s and 80s. Diversity is vital to any investment portfolio. Americans who boast such a financial asset are in better shape than others.
Retirement income in stocks, bonds, ETFs, money market accounts, and other sources shows dedication and responsibility, equating to a highly comfortable retirement.
11. You Take Vacations
Believe it or not, some Americans simply cannot afford yearly vacations. While many of us take an annual vacation for granted, millions of men and women aren’t well-off enough financially to do so.
Recent studies show that 17% of American families don’t plan to take a vacation due to more pressing issues, such as their financial situation or personal matters. Think about that the next time you’re sipping a cool, frosty beverage somewhere tropical.
12. You Have a High Credit Score
A healthy credit score is not only a sign of having creditworthiness in the eyes of banks, credit card providers, and other lenders; it’s also a sign you’re financially better off than other Americans.
Climbing your way up to a high credit score is one of the most challenging aspects of financial success, but it’s worth it in every way. With a high credit score, doors are opened for you in many ways, like lower interest rates and more upscale credit card opportunities.
13. You Have Many Income Streams
Although I mentioned the importance of passive income earlier (and how it’s a sign of financial success compared to the average American), the only thing better than one income stream is many income streams.
You deserve all the credit in the world if you have successfully set up multiple revenue streams to further cement your financial stability. One income stream is tough enough to get off the ground, and having many quickly makes you the envy of most people.
14. Your Children’s Future Is Secure
Securing your financial future is difficult enough, so conventional wisdom suggests that ensuring your children are set up for financial success is nearly impossible. If you’re one of the few parents with college savings accounts set up for your kids, you’re going above and beyond for your family.
I hope to provide for my children’s futures one day. That should be the primary goal of any parent.
15. Your Student Loan Debts Are Paid Off
Like credit card debt, student loan debt can make you feel like you’re drowning under the pressure of paying it back. It’s crazy when you think about it. As teenagers, millions of Americans willingly go into debt (which can easily top six figures) for the privilege of getting a better education.
Unfortunately, that privilege comes at a cost: paying back your student loans at a snail’s pace over the better part of your life. If you don’t have student loan debt, you’re officially better off financially than the average person.
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