20 Clues You’re Better Off Than the Average American (Even If It Doesn’t Feel Like It)
Money stress is real. You work hard, pay bills, and still feel like you’re barely keeping up. But here’s the thing, what if you’re actually doing better than you think?
Most people don’t realize they’ve built financial security because they’re too busy worrying about what they don’t have.
The 2024 Report on the Economic Well-Being of U.S. Households found that 72% of adults say they’re doing “okay” or better financially. A third claim they’re “living comfortably,” while nearly one in five are barely getting by.
So how do you know where you stand? This list breaks down 20 clear signs that show you’re financially ahead of the average American. If most of these apply to you, you’re in a solid position. If not, you’ll know exactly what to work on.
See how many apply to you. You might be surprised at what you find.
Table of Contents
You Have an Emergency Fund
If you’ve got cash set aside for emergencies, you’re already ahead of most people. An emergency fund is like a financial seatbelt, it keeps you from crashing into debt when unexpected expenses hit.
Ideally, you should have at least three to six months’ worth of living expenses saved. The harsh truth? A 2023 Bankrate survey found that only 44% of Americans could cover a $1,000 emergency with their savings.
That means more than half of the country would have to put it on a credit card or take out a loan. If you’ve got a solid safety net in place, you’re already in a stronger position than most.
14 Costly Regrets You Can Avoid By Building an Emergency Fund
You Have Little to No Credit Card Debt
Credit cards are great when used wisely, but they can also be a financial trap. The average American carries a balance of around $5,733 on their credit cards, according to TransUnion. And with interest rates often hovering around 20% or higher, that debt snowballs fast.
If you pay off your balance in full every month or have no credit card debt at all, you’re not just ahead, you’re winning. You’re keeping your money instead of handing it over in interest payments. That’s a financial flex that actually matters.
Related Video: Credit Card Secrets According To Expert With 800+ Credit Score
You Save at Least 15% of Your Income
Most financial advisors will tell you to save at least 15% of your income for the future. Retirement, investments, emergency funds, it all adds up. The problem? The Bureau of Economic Analysis reported that as of late 2023, the average American was only saving about 3.4% of their monthly income.
That’s not even close to what’s needed for long-term financial security. If you’re consistently setting aside 15% or more, you’re not just preparing for the future, you’re making sure you won’t have to stress about money later in life.
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Your Debt-to-Income Ratio is Below 36%
Debt isn’t always bad, but too much of it can be a serious problem. Your debt-to-income (DTI) ratio measures how much of your income goes toward debt payments. Lenders typically want to see a DTI below 36%, with anything over 43% being a red flag.
If your debt is under control and you’re not spending every paycheck trying to keep up with payments, you’re financially healthier than a lot of people out there. That means more room to save, invest, and actually enjoy your money.
You Own Your Home (Or Are On Track to Pay It Off Early)
Owning a home is a major financial milestone. If you own yours outright or are ahead on your mortgage, you’re in an excellent spot. According to the U.S. Census Bureau, around 38.5% of homeowners are mortgage-free.
The rest are still paying off their loans, many of them struggling with rising interest rates and property taxes. If you’re in the group that’s built up serious equity or better yet, owns your home outright, you have a level of financial stability most people only dream of.
How To Buy a House with Little or No Money Down (I Have Done It)
You Have a High Credit Score (Above 750)
A high credit score doesn’t just get you better loan rates, it saves you thousands over your lifetime. The average FICO score in the U.S. is around 718, but if yours is over 750, you’re in elite territory.
That means lower interest rates, better insurance premiums, and an easier time getting approved for everything from rentals to credit cards. If you’ve got excellent credit, you’re not just doing well, you’ve been making smart financial moves for a long time.
Credit Score Myths vs. Reality: What Really Matters According To Credit Expert
You Max Out Your Retirement Contributions
Retirement might seem far away, but the earlier you prepare, the better off you’ll be. For 2024, the maximum 401(k) contribution is $23,000 ($30,500 if you’re 50 or older).
A Vanguard study found that the average 401(k) balance for Americans in their late 40s and early 50s is around $168,646, far below what experts recommend for a comfortable retirement.
If you’re maxing out your contributions or getting close, you’re setting yourself up for financial freedom down the road. That’s something most people won’t have.
Should I Max Out My 401k? A CFA Who Retired Young Answers
You Have Multiple Streams of Income
Relying on one paycheck is like balancing on a tightrope with no safety net. If something happens to that income, what’s your backup plan? That’s why having more than one source of income isn’t just a smart move, it’s a game-changer.
It could be rental income, dividends, a side business, or freelance work. The goal is to make money in more ways than just showing up at a job. A 2024 study found that about 36% of Americans have a side hustle, but most don’t earn enough for it to be life-changing.
If you’ve built multiple streams that bring in serious cash, you’re ahead of the pack. You’ve given yourself options, and in the financial game, options equal power.
You’re on Track to Retire at 65 (Or Earlier)
Most people think retirement is something you do at 65, then cross your fingers that you saved enough. The reality? Many Americans will work well into their 70s, not because they love their job, but because they can’t afford to quit.
A Gallup poll revealed the average U.S. retirement age has crept up to 66, with more people expecting to work longer. If your financial plan lets you retire earlier, you’re already winning.
Early retirement isn’t just about money, it’s about freedom. The sooner you get there, the more of life you actually get to enjoy.
Are You (Financially) Ready for Early Retirement? 18 Signs You’re Financially Set
You Can Afford Vacations Without Going Into Debt
Vacations shouldn’t come with a credit card bill that lingers for months. If you’re able to take trips and pay cash, it means you’ve mastered financial balance, covering your needs, saving for the future, and still enjoying life.
A 2024 Bankrate survey found that 36% of vacationers go into debt just to travel. If that’s not you, you’re financially ahead. The ability to step away, recharge, and make memories without financial stress? That’s what real security looks like.
You Have Adequate Health Insurance
Medical debt can wreck finances faster than bad spending habits. One hospital visit can set you back thousands if you’re not covered. Having solid health insurance isn’t just smart, it’s essential.
According to the Centers for Disease Control and Prevention, over 27 million Americans are uninsured. If you’re covered well enough that an emergency won’t wipe you out, you’re in a better spot than millions of others.
Health is wealth, but so is avoiding medical bankruptcy.
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You Have No Student Loan Debt (Or Have Paid It Off)
Student loans feel like financial quicksand. Millions of Americans are stuck making payments for decades, barely making a dent in the balance. If you’ve paid yours off or never had them you’re ahead of the curve.
The Education Data Initiative reports that 42.8 million Americans still owe federal student loans, with an average balance of $37,787. That’s a burden that affects homeownership, savings, and financial freedom.
If you’re not dealing with it, you’re already in a better position than most.
You Invest Regularly (Beyond Retirement Accounts)
A 401(k) is great, but if that’s your only investment, you’re missing out. The wealthiest people don’t just save, they invest in stocks, real estate, and other assets that grow over time.
Only 58% of Americans own stock, and many don’t invest beyond their workplace retirement plan. If you’re putting money into investments outside of a 401(k), you’re taking advantage of opportunities that most people ignore. That’s how you build long-term wealth.
Retirement Done Right: 20 Smart Strategies to Secure Your Future Now
You Can Afford to Donate to Charities
Giving to charity is a sign that your finances are in good shape. If you can support causes you care about without it affecting your bills, savings, or investments, it means you’ve reached a level of financial stability many never will.
About 56% of Americans donate to charity, but the biggest contributions come from those earning over $100,000 a year. If giving back is part of your financial plan, you’re in a strong position, not just financially, but as someone who understands that wealth is about more than just money.
You Have Life Insurance and Estate Planning in Place
Financially responsible people don’t just plan for their own future, they plan for what happens after they’re gone. Life insurance, a will, and an estate plan aren’t just for the ultra-wealthy. They protect your family, your assets, and your legacy.
A 2024 survey found that only 32% of Americans have a will or living trust. That means most people are leaving their families with a mess to sort out. If you’ve taken the time to get these things in place, you’re ahead of the majority.
Insurance Is Expensive: 20 Simple Tricks You Can Easily Do to Cut Costs
You’re Free of High-Interest Loans
Nothing drains your finances faster than high-interest debt. Payday loans, car title loans, and maxed-out credit cards can keep you in a cycle of paying interest instead of building wealth.
The Department of Financial Protection and Innovation reports that 12 million Americans take out payday loans every year, racking up over $9 billion in fees. If you’ve avoided these traps, you’re already ahead.
Keeping your money instead of handing it to lenders is how you build real financial strength.
You Have a Strong Retirement Savings Balance
Saving for retirement isn’t optional, it’s necessary. The problem is, most people aren’t saving nearly enough. The average retirement savings for Americans aged 55-64 is around $244,750, far below the $1 million experts recommend.
If your savings are on track or above average, you’re doing better than most. Consistently setting money aside means in the future you won’t have to stress about bills or rely on Social Security as a primary income source.
An Early Retiree’s Take on Dave Ramsey’s Blueprint To Early Retirement
You Have No Car Payments (Or Drive a Paid-Off Vehicle)
Car payments are one of the biggest financial drains people take on. The average monthly payment for a new vehicle hit $726 in 2023, and most buyers finance their cars instead of owning them outright.
If you drive a paid-off car, you’re saving hundreds, if not thousands, every year. That’s money you can invest, save, or put toward something that actually builds wealth. Owning your car outright means more financial freedom and fewer obligations.
You Can Afford to Spend on Luxuries Without Financial Stress
Having extra cash for things you enjoy, without it wrecking your finances, is a solid sign you’re ahead. Whether it’s gadgets, dining out, or experiences, being able to spend freely without stress means your financial house is in order.
A 2024 report found that 65% of Americans live paycheck to paycheck. That means they don’t have the luxury of spending without sacrificing something else. If you do, you’re in a better position than most.
You Feel Financially Secure and Prepared for the Future
At the end of the day, financial security isn’t just about numbers, it’s about how you feel. Do you worry about money constantly, or do you have confidence in your financial future? If you’ve built a strong foundation, you know that no matter what happens, you’ll be okay.
A third of Americans report feeling financially insecure, the highest level recorded in recent years. If you’re not part of that group, congratulations, you’ve reached a level of stability most people dream about.
Are You Ahead of the Game?
If most of these signs sound like you, congratulations, you’re doing better than you think. Financial stability isn’t about luck; it’s about smart decisions and consistent effort. If you’ve still got work to do, don’t sweat it.
Every step in the right direction puts you closer to long-term security. The key is knowing where you stand and making moves that set you up for success. Money should give you options, not stress.
Keep stacking wins, keep growing, and most importantly, make sure your money is working for you, not the other way around. Want more insights like this? Stick around, there’s always more to learn.
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