Do you feel financially stable? I have a lot of friends that tend to worry about paying their bills and it made me ponder about what makes a person feel financially stable. What are some of those important signs that indicate you are on the right track? Today I will discuss 10 signs that may show you are managing your money correctly.
- You Never Lose Sleep Over Money
You have enough money in the bank to make you sleep like a baby at night. If an emergency occurs, you know that you have sufficient resources to alleviate the problem. For example, if your car broke down tomorrow and the mechanic told you it would cost $600 dollars, this problem would not impact your lifestyle that much. The key to sleeping well at night is knowing you have enough money to weather a potential financial storm.
2. You Always Have Money In Your Checking Account
If you always have enough money in your bank account you are probably financially stable. For example, if you can go grocery shopping and not have to worry that much about the price, you are doing fine. I personally use to worry about those issues, but that does not seem to be a major concern now. I still budget, but I do not worry if I go over a little. Also, a person that is having to pay overdraft fees or has less than a $100 dollars in the bank account is probably struggling to get by.
3. You Have Very Little Credit Card Debt
I cannot really discuss this too much because I have never had a credit card. If you have multiple credit cards and your paying one credit card with another you are not financially stable. You should also not be using a credit card everyday to pay for things. Also, if you are using credit cards as a way to extend your paycheck because you are out of money, things are not going well. If I do not have the money to purchase something, I go without. That has worked for me so far.
4. Your Not Too Concerned If you Lose Your Job
I think most of us are concerned about having a job, but if you lose your job tomorrow can you survive for at least 6 months without having a paycheck? If not, you are not financially stable. Basically, if you are living paycheck to paycheck, you will have a difficult time making it if you lost your job.
5. You Always Pay Your Bills On Time
If you pay your bills almost immediately when your bill is available you are doing just fine monetarily. If you are worried that your electric will be shut off because you are late on paying the bill (this happened all the time when I was growing up) you are not financially stable. One of the main reasons I sleep well at night is I know I can pay all my bills.
6. Everyone Comes To You For Financial Advice
You are the one that everyone comes to for financial advice. They are always asking you questions about investing, saving and planning for retirement. All those years of being frugal has helped you build a reputation and everyone wants your knowledge. Well, maybe not everyone, but a lot of people ask you financial questions.
7. You Save More For Retirement Than Others
If you are steadily saving money back each month for retirement you are doing well. A person should save at least 10% to 15% of their income each month for retirement. I typically save around 40% of our net income each month, but I am also trying to retire early. If you really want to retire early, a person has to save a lot more than just the average amount.
8. You Are Great At Saving
If you are great at saving money back you are on your way to financial independence. Saving money back is a way of life and you have been doing this for along time. I have always enjoyed saving and I get more pleasure saving than spending. It seems like I always find a way to save money even when times are difficult. I just find ways to cut.
9. Your Net Worth Continues To Grow Each Year
Each year your net worth continues to grow. The idea is to have more money each year. Last year, I was able to add a little over 39,000 dollars to my overall net worth. I am hoping this year will be even better, but the goal is to always have more money. If it starts going in the opposite direction, “Houston we have a problem.” Growing your money is the key.
10. You Live Beneath Your Means
If you are saving like crazy, you are probably living beneath your means. When others are living paycheck to paycheck you are stock piling your money. I have lived below my means for most of my adult life and I doubt that will ever change. Even if I was rich, I would still live cheap. I have trained myself to think like that. This does not happen over night, but anyone can do it.
If you cannot check all of these boxes, it is not the end of the world. Becoming financially stable takes time and you have to create a system that works for you. Finding ways to cut back each month is the first goal. You might not be at a point in your life that you can do this. It is hard to cut back when you do not have money. The idea is trying to make smart money choices, but not beating yourself up if you make a few mistakes along the way. We are all human and life does happen. Just get up each day and try to make that day a little better than the last.