Here are 5 signs that you may or may not feel financially healthy in America — how many do you show?
If you’re feeling uneasy about the state of your finances, you’re not alone. A 2024 Gallup poll found that 36% of Americans consider their financial situation “only fair,” and 17% rate it as “poor.”
But while you may be inclined to view your financial situation in a negative light, you may actually be in a stronger place than you think. Here are a few signs that you are in good financial health despite having some stressful times.
The Federal Reserve found that by 2023, 37% of Americans could not cover $400 in unplanned expenses in savings. If you have an emergency fund, you’re in a better position to deal with unexpected debt or unemployment, which puts you in a better position overall.
Financial experts generally recommend building an emergency fund to cover three to six months of expenses. If you are the sole earner in your household, the higher end of that range may be the best fit for you. If you have a spouse or financial partner, you both probably have a three-month emergency fund, because it’s unlikely you’ll both lose your jobs at the same time (even if you work in the same field or employer, a six-month emergency fund might be better).
It is not unusual for the cost of living to rise. If there’s room in your budget to handle a rent increase, or a higher cable bill when your introductory rate runs out, then you’re in a good place. A good budgeting rule is 50-30-20 – put 50% of your money towards needs, 30% towards wants, and 20% towards savings.
Being able to manage the increase in expenses means that you are not increasing your income every month, but rather, you are living below your means. So while you may not be happy about the increase in your essential expenses, just the fact that you can handle it without moving, canceling service, or dipping into your savings means you’re doing a good job.
Read more: 5 ways to improve your net now – easily increase your money game without changing your daily life
Housing may be your biggest expense. And because of that, it’s important not to get in over your head.
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