4 Signs You’re Doing Well Financially, Even If It Doesn’t Feel Like It Yet
The indications that you're doing well financially aren't nearly as flashy as you'd expect them to be.
DukiPh | Shutterstock In our culture, we tend to focus on outward symbols of wealth. They are the status symbols that rich people love to show off, like luxury cars, designer clothes, and fancy vacations. But this is rarely, if ever, a true sign of how well a person is doing financially. Sure, a person might have a nice house, but they could have gone into major debt to buy it.
Real signals of financial health are usually quieter. They may not even be known by other people at all. A financial coach named Dave knows this better than anyone. “Some of the most wealthy people that I know don’t flex their wealth at all,” he said in a TikTok video. To prove his point, Dave shared four different signs that you’re actually doing really well financially. They may not be fancy or ostentatious, but they can provide you with the peace of mind you need or be goals you can work toward in the future.
Here are 4 signs you’re doing well financially, even if it doesn’t feel like it yet:
1. You live below your means
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Living below your means is not easy, something that Dave acknowledged. “Unfortunately, this is not the norm for most Americans,” he said. Instead, a study by Market Watch found that 57% of Americans actually live paycheck to paycheck, meaning they have nothing extra left over. But, as Dave pointed out, having even the smallest amount of money left over after you’ve paid for all of your necessities and a few wants as well allows you to save for the future.
NerdWallet’s Jeanne Lee noted that living below your means doesn’t have to be big. It can be something as simple as having $500 left over when the month is over. But the benefits of saving that extra money are huge and can even help you achieve some of the other things Dave shared.
It can be tempting not to live below your means purposefully. After all, it’s your hard-earned money, and you deserve to spend it, right? While you could make this argument, wouldn’t it be even better to put your hard-earned money into savings so that you can use it for something even better in the future? Of course, this isn’t possible for everyone, but it’s a goal you can work towards.
2. You’re debt-free
If you just cringed when you read that, you’re not alone. Dave once again said this is “not the norm for most Americans.” Megan DeMatteo from CNBC Select reported that the average American is in $90,460 of debt. That’s nearly six figures of debt that have to be dealt with at some point. DeMatteo noted that people often fall into debt after trying to keep up with what they saw around them. They wanted the nice car and house that everyone else who was supposedly wealthy had, when the reality is they probably went into debt to pay for it, too.
Of course, one of the most pervasive forms of debt comes from student loans. It’s certainly one of the most discussed forms of debt. According to the Pew Research Center, Americans owed a collective $1.6 trillion in student loan debt in June 2024. That’s an unbelievable amount of money and shows just how out of control education costs have become. Many people would be doing much better financially if they could get out from under their student loan debt.
Being debt-free is another elusive financial goal, but it’s a goal nonetheless. It is possible to pay off your debt and live debt-free if you implement the right strategies and save properly. And, really, there’s no better feeling than knowing that you’re free from the constraints of debt.
3. You have an emergency fund
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Dave recommended that your emergency fund be able to cover three to six months of your usual expenses. This offers a layer of protection in case something unexpected happens, like losing your job or falling ill. Chances are, if you’re already living below your means, you’ve got at least the start of a decent emergency fund saved up. This is exactly the kind of thing you can save for with that extra money.
Writing for NerdWallet, Margarette Burnette noted that an emergency fund can actually keep you from falling further into debt. “Emergency funds create a financial buffer that can keep you afloat in a time of need without having to rely on credit cards or high-interest loans,” she said. “It can be especially important to have an emergency fund if you have debt, because it can help you avoid borrowing more.”
Burnette agreed with Dave’s estimate of having three to six months of expenses saved up, but also noted that the exact amount you need is unique to each person or family. It’s important to keep in mind, of course, that even if you can’t save up those three to six months of expenses right now, something is better than nothing. Don’t let falling short of the goal stop you from trying at all.
4. You’re investing for retirement
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This can feel absolutely daunting, especially when you have debt you’re trying to pay off and an emergency fund to save for. Plus, investing isn’t exactly easy math to do. Oftentimes, if you want to make smart investment choices, your best bet is to work with a financial advisor, which costs even more money. But, as Dave pointed out, the whole point is to work towards not having to work one day. Think about how nice it would be to achieve that.
Investopedia said that it is never too early to start thinking about investing for retirement. It may seem far off, but it will come up faster than you expect, and it takes time to save the kind of money you’ll need. Investopedia noted that Social Security Administration payouts are only meant to supplement other money you have, and make up about 40% of a retiree’s income. Because of that, it’s best to save 60% to 80% of the income you make before retirement if you want to continue living the same kind of lifestyle.
It’s important to remember that you don’t have to make big, bold investments. There are ways to do it that present less of a financial risk and don’t require putting as much money into it in the first place. For example, James Royal, PhD, made a list of the lowest-risk investments for Bankrate. It included things like high-yield savings accounts and certificates of deposit (CDs). It’s good to invest, and it doesn’t have to be scary.
Real indicators of financial success tend to have nothing to do with visible status symbols. You never know how someone is really doing, even if they have expensive things. Instead, it’s more important to focus on getting your financial affairs in order behind the scenes so that you feel confident about where you’re at and where you’re going. These are signs you’re really doing well financially, even if you don’t think you are.
Mary-Faith Martinez is a writer with a bachelor’s degree in English and Journalism who covers news, psychology, lifestyle, and human interest topics.
