The media can sometimes make you feel like you are not doing so great in the finance department. However, did you know that if you have more than $8,000 in your savings, you are saving more than the average American?
Don’t fret — here are 13 other ways you are doing better financially than you think.
Financially well-off individuals know that the first step to a healthy financial life is being debt-free. If you’re actively working toward paying off your personal loans, student loans, and high-interest consumer debt like credit card debt, you’re ahead of most Americans. The average American household carriesmore than $6000 in credit card debt—so as long as you’re plugging away at your debt without actively purchasing more, you’re on the right track.
Inflation has made making bill payments on time more difficult for the majority of Americans with a recent study suggesting that 45% of the population has paid at least one bill late in the last 12 months and 29% admitting to doing so in the last six months. If you’re consistently paying your bills on time, you’re ahead of at least half of Americans right now.
Creating a budget is arguably the single best thing you can do for your financial life — and if you’ve already made and stuck to a budget for some time, you’ll see why. Knowing exactly where your money is coming from and going to every month allows you to better understand your financial picture and make adjustments to ensure there’s always enough.
Albert Einstein called compound interest the eighth wonder of the world, citing that he who understands it, earns it and he who doesn’t, pays it. If you’ve started investing even a small amount of money into the stock market and you have time on your side, you’re well on your way to a healthy financial life.
You wouldn’t dream of making big purchases just to fit in or show off to your neighbors. Instead, you live below your means and think critically about all the purchases you make. Living for yourself — and living below your means — is empowering and allows you to achieve financial peace of mind, knowing that you always have enough to cover the bases.
The fact that you’re reading this article shows that you’re doing better financially than you might think. People who are actively working on their financial literacy are growing and learning day after day and are working on growing their financial muscle. Working on your financial literacy — whether it’s reading articles, self-help books, YouTube videos, or whatever your medium of choice — will allow you to make the best financial decisions for yourself and your family, putting you ahead of most people no matter what your income level might be.
Financial experts suggest that everyone — no matter your employment status or financial situation — have an easily accessible emergency fund in a high-interest savings account. Certain experts suggest starting with $1000, or enough to cover an unexpected expense, while others suggest saving 3-6 months of your total cost of living. According to a recent study, 42% of Americans couldn’t cover an unexpected $1000 expense without using credit, so if you’ve got at least $1000 saved, you’re ahead of the rest.
Financially responsible folks know that relying on one stream of income can be risky — and that taking on a side hustle or working toward a passive income stream is a great way to create a financial safety net. This could look like monetizing your passions, starting a YouTube channel, and of course, investing in the stock market.
A recent survey showed that 42% of Americans don't check their bank account balances regularly because they fear what they might see. If you’re checking your bank accounts and investment accounts daily, or at least multiple times per week, you’re going to be better off financially than those who don’t. This is because when you know exactly where your money is going, and you face that reality head-on, you’ll make smarter financial decisions overall.
It doesn’t matter how much money you’re bringing home — if you understand that money is a means to an end, you’re ahead of the majority of Americans. People who seek more money just to be able to consume more will never feel satisfied and will always seek more. However, those who understand that money means freedom, and who amplify what they have and live frugally to work less and live more, use money as a tool and are much more careful with where their dollars are going.
Likewise, if you understand that time is money, you’re doing better financially than you might think. This could look like calculating your per-hour rate and thinking about how many hours of work a given purchase would cost you. For example, if you’ve calculated that you make $25 per hour and want to order $50 Uber Eats delivery, is the convenience of fast food delivery really worth two hours of your time?
Being financially healthy doesn’t mean foregoing every little pleasure — but rather knowing the pleasures that you believe are worth it to you personally. If you recognize the treats that make the biggest impact in your life (perhaps it’s concert tickets once a quarter or an annual vacation) and you don’t feel guilty when you make the purchase because it’s already built into your budget, you’re ahead of most Americans.
The cost of living crisis makes achieving a healthy financial life more difficult right now — but it’s not impossible. If you have a positive mindset and can truly rely on yourself to figure things out, you’re doing much better than folks who have fallen into a victim mentality.