Do you ever think about your money and doubt that you’re doing well because you’re not where you want to be? Your finances might be in a better place than you think. Here are eight signs you’re doing well financially.
You could survive a few months on your savings if you had to.
If you lost your job today and couldn’t get another right away, do you have enough money in savings to last you two or three months? Your job may not provide a severance package and unemployment probably won’t be enough to cover your expenses.
You’re saving for retirement.
Regular contributions to retirement savings ensures you’ll have a source of income when you decide to stop working. It’s better to save early and give your money a chance to grow, rather than waiting closer to retirement age.
You’re debt free - or at least actively working to pay off your debt.
Getting rid of your high interest rate debts, like credit card balances, is one of the best things you can do for your finances. You’ll save money on interest and free up money that you can put into savings.
Your monthly spending is less than your income.
Living below your means is one of the keys to financial success. If you’re spending more money than you make, it’s a sign that you’re headed for trouble. You’re either borrowing money or dipping into savings - neither of which is good for you financially.
You can afford to save money each month.
Being able to put money into your rainy day fund, retirement fund, and child’s college fund are signs that you’re living below your means and making wise financial decisions.
You don’t pay overdraft fees.
Skipping out on overdraft fees means that you’re managing your checking account well. Not only that, avoiding overdrafts means you’re saving money, possibly hundreds of dollars each year.
You can afford to pay your bills on time.
Having enough money to pay your bills on time indicates shows you’re living within your means and managing your money well. By paying your bills on time, you avoid things unnecessary expenses like late fees and increased interest costs.
You have a good credit score.
Your credit score is based on how well you’re managing your financial obligations, particularly your debt obligations. A good credit score shows that you’re paying your bills on time and limiting the amount of debt you’re carrying. With a good credit score, you’ll be able to borrow money at a lower cost, which leads to a lower and more affordable monthly payment.
You can afford to be charitable.
When you get to a place that you’re making all your financial goals - saving money, spending well, paying off debt - AND you can donate to charity, it’s a sign that your finances are in a great shape.
If all of these don’t apply to you right now, make it part of your financial goals to get there.