10 Signs You're Doing Well Financially
You might be doing better financially than you think. These are some signs you’re doing well financially even though you may not be exactly where you want to be quite yet.
You might very well be on the path of financial wellness and you didn’t even know it. Here’s how I see it.
1. You live like you have no money
You live like you don’t have any money even though you actually do have money. This is something I’ve always tried to do. Just because I make a little more money doesn’t always mean I should be spending it. I try to make sure my spending stays the exact same.
So if you’re doing that and you don’t spend an extra $100 or an extra $1,000 just because you have it, that’s a sign that you are practicing delayed gratification. This means you’re not tying your happiness to your stuff.
2. You pay your bills on time
About 32 percent of Americans have paid their bills late in the past six months. So if you are consistently paying all of your bills on time and not incurring any bad debt, then you are in a good spot financially.
If you can continue to raise your income and lower your expenses, then you’ll be able to start saving money and progressing in your financial journey. You’re probably also avoiding the secret inflation which I’ll discuss later on.
3. You don’t impulse buy
If you have stopped yourself from impulse buys or upgrading on a whim to a new phone, laptop, car, clothing, or any other frivolous thing you can buy that’s new and improved, then you are on the right track financially.
That is the first step in frugal living and this has made a big impact in my life.
4. You follow financial creators
If you follow, obsess, and study financial creators, content, podcasts, and books, like I did when I was at the beginning of my journey, you’re on the right track.
As long as you start to take action on what you’re learning, you will start progressing.
5. You have an emergency fund
An emergency fund is such an important thing to have. So many people do not have one. If you have a fund that has at least one to six months worth of living expenses and you’re currently working on that, it takes a huge amount of stress off your shoulders.
You know if something bad happens to your car or whatever happens, you have a buffer and you’re not going to get into debt over it.
6. You have an investing plan
Even if you’re not investing right now, maybe you have a plan. Maybe you’re saving money with the goal to start investing. I started saving up for a couple of years to buy my first rental (see image) so I was saving to start investing.
Once, I made that investment it started to compound and I was able to get more rental properties.
7. You talk about money
Most of us spend our time working for money but we never talk about it. It seems like we’re ashamed about it.
But, if you surround yourself with people who you can talk to about money and who you can ask questions and learn from their mistakes, and they can learn from yours, then you are in a good spot.
When I found a group of people who I could talk to about the FIRE (financial independence, retire early) Movement and financial independence, it really motivated me to learn and do even more.
8. You bought your car in cash
Cars are one of the biggest wealth killers out there. Avoiding car payments and leases by buying a car in cash is one of the smartest financial moves you can make. My rule is that if you couldn’t buy it in cash then you probably shouldn’t buy it.
9. You’re working towards a 50 percent savings rate
This is much higher than what most people recommend, which is anywhere from 15 to 20 percent. If you’re saving or working to save 50 percent of your income, which I know is possible since I’ve been able to do that on a below-average income, it will have a huge impact on your financial future.
If you play with an early retirement calculator you will see how much your savings rates matter in order to allow you to retire a lot sooner. Lowering expenses and raising your income helps. This is something that about 90 percent of people will never try to do.
It’s been one of my goals for the past five years to save at least half of everything I make.
10. You avoid lifestyle inflation
This is the biggest wealth killer for most people. When people make more money, they make bigger purchases – a better car, better clothes, a bigger apartment. It’s extremely tempting. Everytime you get more money, you think why not go out to dinner more often or get a better home.
There are people who make a ton of money who live paycheck to paycheck. It’s because you think that the more you make, the more you have to show others that you’re successful with things.
But if you’re okay being the millionaire next door and not having to show off for anybody, then you’re in a good spot financially.
Signs you're doing well financially
Those are my 10 signs of financial wellness. Even though we might be doing the right things financially, we can feel like we’re behind. In reality these are the signs you're doing well financially.
Let me know what you think about these financial wellness tips. Do they apply to you, do you agree with them, or have one to add to the list? Comment here!
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