20 Signs You’re Actually Financially Better Off Than The Average American
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Money matters can make you feel like you’re always struggling to keep up. But guess what? You might be doing better than you think! In fact, many people are surprised to learn they’re actually ahead of the game when it comes to their finances.
Let’s take a closer look at how you compare to the average American. The 2024 Report on the Economic Well-Being of U.S. Households, published by the Federal Reserve, shows some interesting trends.
It turns out that 72% of adults say they’re at least “okay” financially. That breaks down to 33% who feel they’re “living comfortably” and 39% who are “doing okay.” On the flip side, 19% of people are just scraping by, while 9% find it really tough to make ends meet.
These numbers illustrate the financial landscape in America. While many people are managing well, a significant number still face challenges. So, how can you tell if you’re in a good financial position?
This article will highlight 20 clear signs that indicate you may be better off than the average American. Each point will be supported by verified statistics and useful information to help you assess your financial health.
As you read through this list, think about how many signs apply to you. You might be pleasantly surprised to find out you’re doing better than you thought! Ready to see how you measure up? Let’s get started!
Table of Contents
You Have an Emergency Fund

Having money set aside for unexpected events is a cornerstone of financial stability. An emergency fund acts as your financial safety net, ready to catch you if life throws a curveball your way.
Ideally, you want to have enough saved to cover three to six months of living expenses. This cushion can help you handle job loss, medical emergencies, or other unforeseen circumstances without falling into debt.
According to Bankrate’s Annual Emergency Fund Report in 2023, only 44% of Americans could cover a $1,000 emergency with their savings. This means most people would need to borrow money or use credit cards to handle unexpected expenses.
If you’ve got more than $1,000 stashed away for emergencies, you’re already ahead of more than half of Americans!
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You Have Little to No Credit Card Debt

Credit cards can be useful tools when used responsibly, but they can also lead to financial trouble if mismanaged. If you’re paying off your balance in full each month or have no credit card debt at all, you’re in a fantastic position.
Many Americans struggle with credit card debt, carrying balances month to month and paying high interest rates. Data compiled by TransUnion shows that the average credit card debt for Americans was an estimated $5,733 through the first quarter of 2023.
That’s a significant amount of debt that can take years to pay off, especially when you factor in interest charges. If your credit card balance is below this average, or better yet, if you’re debt-free, you’re doing better than most!
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You Save at Least 15% of Your Income

Saving a portion of your income is crucial for long-term financial health. Financial experts often recommend saving at least 15% of your pre-tax income for retirement and other financial goals. This might sound like a lot, but it’s a
Unfortunately, many Americans are falling short of this goal. According to the Bureau of Economic Analysis, as of September 2023, the average American was saving just 3.4% of their monthly income. That’s far below the recommended 15%!
If you’re managing to save 15% or more of your income, you’re well ahead of the curve. You’re building a strong financial foundation that will serve you well in the years to come.
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Your Debt-to-Income Ratio is Below 36%

Your debt-to-income (DTI) ratio is a key indicator of financial health. It represents the percentage of your monthly income that goes toward paying off debts.
A low DTI ratio means you’re using a smaller portion of your income to pay off debt, leaving more room for savings and investments. This flexibility can make a big difference in your overall financial picture.
According to Investopedia, a good debt-to-income ratio is generally considered to be below 43%, with many lenders preferring to see a ratio of 36% or below. If your DTI is in this range, you’re in a strong position.
You have more of your income available for other financial goals, and you’re likely to qualify for better loan terms if you need to borrow in the future.
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You Own Your Home (Or Are On Track to Pay It Off Early)

Homeownership is often seen as a key wealth-building tool. If you own your home outright or are ahead on your mortgage payments, you’re in a strong financial position. Not only do you have a valuable asset, but you’re also building equity over time.
Recent data from the US Census Bureau shows that approximately 61.5% of homeowners had a mortgage on the home they owned. This means that roughly 38.5% of homeowners were living mortgage-free.
If you’re part of this group, or if you’re on track to pay off your mortgage early, you’re doing exceptionally well. You’re building long-term wealth and reducing your monthly expenses, which can free up money for other financial goals.
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You Have a High Credit Score (Above 750)

Your credit score is like a financial report card. It tells lenders how responsible you are with credit and can affect everything from your ability to get a loan to the interest rates you’ll pay. A good credit score opens the door to better interest rates, loan terms, and financial opportunities.
Scores above 750 are generally considered “excellent.” According to FICO data in 2023, the average credit score in America was around 718. If your score is above this average, especially if it’s over 750, you’re in great shape.
You’re likely to qualify for the best rates and terms on loans and credit cards, potentially saving you thousands of dollars over time.
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You Max Out Your Retirement Contributions

Consistently contributing the maximum to your 401(k) or IRA is a powerful way to set yourself up for a comfortable retirement. For 2023, the maximum 401(k) contribution was $22,500 (or $30,000 for those 50 and older).
If you’re hitting these limits, you’re way ahead of the game. Many Americans struggle to save enough for retirement. According to Vanguard’s 2024 How America Saves Survey, the average 401(k) balance among those aged 45-54 was around $168,646.
While this might sound like a lot, it’s actually far below what many retirement experts recommend for a comfortable retirement. If you’re maxing out your contributions, you’re setting yourself up for a much more secure financial future.
You’re taking full advantage of tax benefits and the power of compound interest, which can make a huge difference in your retirement nest egg.
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You Have Multiple Streams of Income

Diversifying your income makes you less reliant on a single source and adds financial security. This could include freelance work, rental income, or dividends investments. Having multiple income streams acts as a safety net, protecting you if one source dries up.
It also provides opportunities to accelerate your savings and investment goals. As of 2024, 36% of Americans have a side hustle, meaning the majority of people rely solely on their primary income source for financial stability.
If you’re among those with additional income streams, you’re ahead of the curve. You’re not only increasing your earning potential but also developing new skills and creating more financial opportunities for yourself.
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You’re on Track to Retire Age 65 (Or Earlier)

Being able to retire by age 65 is a significant financial achievement, especially considering many Americans expect to work well into their 70s due to financial insecurity. Planning for early retirement requires disciplined saving and smart investing throughout your career.
A Gallup poll found that the average retirement age in the U.S. is now 66, with more non-retired adults saying they’ll continue working past age 70 due to financial concerns. If you’re on track to retire 65 or earlier, you’re in an enviable position.
You’ve likely made smart financial decisions throughout your life, prioritizing saving and investing for the future. This early retirement goal puts you ahead of many of your peers and gives you more options for how to spend your later years.
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You Can Afford Vacations Without Going Into Debt

The ability to pay for vacations with cash or savings rather than credit is a good indicator of financial well-being. It shows you have enough discretionary income to enjoy life’s pleasures without compromising your financial health.
A 2024 Bankrate survey found that 36% of summer vacationers planned to take on debt for their travels. If you can plan and pay for your vacations without relying on credit, you’re doing better than a third of Americans.
This approach to vacation spending indicates you’re living within your means and prioritizing experiences without sacrificing your financial stability. It’s a balance that many struggle to achieve.
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You Have Adequate Health Insurance

Having health insurance that covers most medical expenses without significant out-of-pocket costs is a major financial advantage. It protects you from unexpected medical bills that could otherwise derail your financial plans.
According to new survey findings published by the Centers for Disease Control and Prevention, more than 8% of Americans did not have health insurance during the first months of 2024, which corresponds to about 27.1 million individuals.
If you have comprehensive health coverage, you’re better protected than millions of Americans. This coverage not only safeguards your health but also your financial well-being, shielding you potentially devastating medical costs.
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You Have No Student Loan Debt (Or Have Paid It Off)

Student loan debt is a heavy financial burden for many Americans. If you have no student loans, or if you’ve paid them off, you’re ahead of many of your peers. According to the Education Data Initiative, about 42.8 million Americans owe federal student loan debt, with an average balance of $37,787 as of 2024.
Being free of this debt gives you more financial flexibility. You can redirect the money that would have gone toward loan payments to other financial goals, such as saving for a home, investing for retirement, or building your emergency fund.
This freedom puts you in a stronger financial position compared to millions of Americans still grappling with student debt.
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You Invest Regularly (Beyond Retirement Accounts)

Regularly investing in stocks, bonds, or other assets outside of your retirement accounts positions you for long-term wealth growth. This extra investing shows you’re thinking beyond just retirement and are actively working to build your wealth.
Only 58% of Americans own stock, either directly or through a retirement plan like a 401(k) or IRA. If you’re among those who invest regularly outside of retirement accounts, you’re taking advantage of opportunities for wealth creation that many Americans miss.
This proactive approach to investing can lead to greater financial security and more options in the future.
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You Can Afford to Donate to Charities

Charitable giving is often a sign that you have enough financial stability to focus on causes beyond your own immediate needs. It indicates that you’ve not only met your own financial obligations but have surplus to help others.
In 2021, about 56% of Americans donated to charity, but the majority of donations came from households with incomes above $100,000. If you’re able to give to causes you care about, regardless of the amount, you’re in a fortunate position.
This ability to give back not only helps others but can also provide personal fulfillment and potential tax benefits, further solidifying your financial well-being.
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You Have Life Insurance and Estate Planning in Place

Having life insurance and a will or estate plan means you’ve thought about protecting your family’s financial future. It’s a sign of financial maturity and forward-thinking.
According to a 2024 survey, only 32% of Americans had a will or living trust in place. If you’ve taken these steps, you’re ahead of more than two-thirds of Americans in terms of financial planning.
This preparation not only provides peace of mind but also ensures your assets are distributed according to your wishes, potentially saving your loved ones stress and legal complications in the future.
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You’re Free of High-Interest Loans

Payday loans, car title loans, and other high-interest debt can quickly spiral out of control. If you avoid these types of loans, you’re in a stronger financial position than many.
The Department of Financial Protection and Innovation reports that around 12 million Americans take out payday loans annually, paying over $9 billion in loan fees. Steering clear of these high-cost loans indicates you’re managing your finances well and have other resources to fall back on in times of need.
This avoidance of predatory lending practices puts you on a more stable financial footing compared to millions of Americans who struggle with these types of debts.
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You Have a Strong Retirement Savings Balance

Retirement savings are a critical indicator of financial health. If you’re saving more than the average American, you’re better prepared for the future.
As of 2023, the average retirement savings for Americans aged 55-64 was approximately $244,750, far below the $1 million many experts recommend for a comfortable retirement. If your retirement savings exceed this average, particularly if you’re on track for that $1 million mark, you’re in an excellent position.
This level of saving indicates you’ve consistently prioritized your future financial security, putting you ahead of many of your peers in preparing for retirement.
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You Have No Car Payments (Or Drive a Paid-Off Vehicle)

Owning your vehicle outright frees up money for other financial goals. It’s a sign that you’re avoiding unnecessary debt and managing your resources well.
According to Experian’s Q3 2023 report, the average monthly payment for a new vehicle reached $726, and 85% of new vehicles were financed. If you’re driving a paid-off car or close to paying off your auto loan, you’re in a strong position.
You’re avoiding a significant monthly expense that many Americans struggle with, allowing you to direct that money toward savings, investments, or other financial priorities.
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You Can Afford To Spend on Luxuries Without Financial Stress

Being able to comfortably afford luxury items (like gadgets, fashion, or experiences) without financial strain is a clear sign of financial health. It indicates that you’ve met your essential needs and have extra for discretionary spending.
A 2024 report revealed that 65% of Americans live paycheck to paycheck, meaning they cannot afford discretionary spending without sacrificing essentials. If you can indulge in some luxuries without worry, you’re in a better financial position than most.
This ability to enjoy life’s extras without stress is a hallmark of true financial well-being.
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You Feel Financially Secure and Prepared for the Future

Ultimately, financial security is about feeling confident in your ability to handle future challenges. If you feel stable, with a plan for emergencies, retirement, and other future needs, you’re better off than many Americans.
A third (33%) of American adults in Northwestern Mutual’s 2024 Planning & Progress survey said they don’t feel financially secure, the highest measure of financial insecurity recorded in the study’s history.
If you feel confident about your financial situation and future, you’re in the minority. This sense of security is perhaps the most important sign of financial health, as it reflects not just your current situation but your preparedness for whatever the future might bring.
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Financial Strength Check

You’ve just toured 20 key indicators of financial health. How did you measure up? Remember, these benchmarks aren’t about competition, they’re guideposts for your financial journey. If you’re hitting many of these marks, congratulations! You’re on a solid financial path.
Don’t worry if you’re not there yet on all points. Each step toward better money management is progress. Use this list as inspiration. Pick one or two areas to focus on improving. The goal is steady progress, not perfection.
Financial well-being is a journey, not a destination, and recognizing where you stand is the first step toward improvement.
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AI was used for light editing, formatting, and readability. But a human (me!) wrote and edited this.