10 Signs You’re Excelling Financial Beyond the Average

In a world where financial comparisons can offer insights into our own economic well-being, understanding how you measure up to your peers can be a valuable exercise. Here, we delve into ten key metrics that can signal not just financial stability, but significant success compared to the average American.

1. Savings that Surpass $4,500

A recent Motley Fool survey reveals that a staggering 51% of Americans have $5,000 or less stored in their savings accounts, with 35% having a mere $1,000 or less saved. If your savings eclipse the median amount of $4,500, congratulations! But remember, continuous financial growth should remain a priority. Explore high-interest savings accounts to optimise your savings potential.

2. 401(k) Balance Exceeding $30,000

Vanguard’s “How America Saves 2023” report outlines median 401(k) savings for different age groups. If you find yourself in your mid-30s with over $30,000 stowed away, you’re outperforming the majority. Yet, keep in mind, this is a comparative metric – ensuring you save enough for your individual goals is paramount.

3. Credit Score Beyond 680

A credit score north of 680 places you ahead of the curve, according to Experian. With the average credit score for those aged 18 to 25 at 679, and slightly higher at 687 for those aged 26 to 41, monitoring your credit health becomes essential. Utilise free services like Credit Sesame or Credit Karma to stay on top of your credit score and history.

4. Emergency Fund Capable of Covering $2,000

A robust financial safety net is crucial. The Motley Fool survey discloses that 47% of Americans possess an emergency fund, with the median amount being $2,000. If you can comfortably cover unexpected expenses exceeding $2,000, your financial resilience surpasses that of many Americans.

5. Unperturbed Savings: No Monthly Withdrawals

Growing your savings is commendable, but true financial success lies in maintaining a well-planned budget. If your monthly savings remain untouched, except for necessary purchases, you’re exhibiting financial discipline. Ensure your budget aligns with your financial goals to sustain this positive habit.

6. Credit Card Debt Below $6,500

As per LendingTree, the average American adult carries $7,279 in credit card debt. If your debt load is under $6,500, you’re managing your finances more prudently than most. Given the escalating trend in credit card debt, minimising this liability becomes crucial, especially with retirement on the horizon.

7. Meticulous Financial Monitoring

In a digital age, staying abreast of your finances is a simple yet impactful habit. Numerous budgeting apps, such as Rocket Money, empower you to track spending, manage subscriptions, and monitor your credit score. The ability to stay vigilant about your financial inflows and outflows positions you ahead of those who remain unaware of unnecessary expenditures.

8. Net Worth Surpassing $100,000

Net worth transcends beyond the wealthiest individuals; it’s a metric for anyone aspiring to understand their financial standing. Calculate your net worth by deducting liabilities from assets. The Federal Reserve’s 2022 Survey of Consumer Finances reveals that the median net worth for Americans aged 35-44 is $135,600, and for those aged 45-54, it’s $247,200.

9. Proficient Tax Planning

While tax discussions may lack glamour, proactive tax planning can significantly impact your financial trajectory. Organising your finances throughout the year, especially around contributions to retirement accounts or health savings accounts, aids in reducing annual tax obligations. This strategic approach not only lessens tax burdens but also contributes to a healthier financial future.

10. Timely Bill Payments: A Rarity Among Many

A Consumer Finance report unveils a startling reality – nearly 80% of consumers live paycheck to paycheck. If you belong to the minority that pays bills on time every month, you’re exhibiting financial responsibility that eludes many. Regular, timely bill payments are a cornerstone of financial stability.

In Conclusion: Setting New Financial Goals

In the pursuit of financial success, comparisons can offer valuable insights, but they should not dictate your self-worth. If you don’t align with every metric mentioned, use them as stepping stones to set new, achievable financial goals. The journey to financial empowerment is unique for everyone, driven by personal aspirations rather than societal benchmarks.

Remember, it’s not about keeping up with others; it’s about enhancing your quality of life and achieving peace of mind through prudent financial management.