How can you know if you’re truly living a life of financial stability, or if you’ve still got some work to do in the area of creating a financially stable life? The 20 signs below can help you figure out the answer to that question. Although it’s true that individually, the 20 signs don’t necessarily indicate a financially stable person (it’s easy to put your head in the sand sometimes, right?), collectively, if you can answer “yes” to a majority of the statements below, it’s a good indicator that you’ve created a financially stable money situation for yourself. Take the test below and see where you rank.

1. You’re at peace with your financial situation

If you’ve created enough of a financial cushion that money worries don’t plague you, this could be a sign that you’ve achieved financial stability. Note that we’re not talking here about a “que sera sera” type of non-worry, but a true “I’ve got things covered” confidence in your financial situation that makes you certain that you’re in a good financial place and helps you sleep at night.

2. You don’t fight about money with your spouse

If you and your spouse get in fights about money on a regular or semi-regular basis, it could be an indicator that there’s some financial instability going on. It could also be an indicator that one spouse places a higher value on money than they should. However, if you and your partner are both comfortable with your money situation, your money goals and the plan to achieve those goals, it’s likely that financial stability has already arrived.

3. You don’t use your credit cards often, or if you do, you pay them in full every month

Choosing to use credit cards every month in order to pay them off monthly and get rewards without paying interest is entirely different than having to use your credit cards every month. If your credit cards are not a necessity in your life, you’re likely in a sound financial place.

4. You’ve got a fully stocked emergency fund

Whether that’s 3, 6 or 12 months’ worth of expenses, a fully stocked emergency fund is a great sign that your finances are in order.  A plush emergency fund means you’ve taken the time to make savings a priority over spending.

5. A job loss wouldn’t mean you couldn’t pay your bills

Would a job loss put your family in dire straits, or would it simply mean implementing a slight course correction until a replacement income could be found? If the thought of losing your job doesn’t send you into a panic, but simply requires moving some money from savings, you’re on the right track.

6. Financial emergencies don’t invoke panic

In the days before we implemented a plan to get our financial house in order, a broken water heater or large car repair would have my husband and I panicking BIG time. We’d wonder: do we have enough on any of the credit cards to make this purchase? Can we handle the increased credit card payment that the larger balance would invoke? Today, financial emergencies a blip on the radar screen instead of a full-scale disaster. If you can say the same, financial stability is within view, if it hasn’t already hit shore.

7. You’re okay with spending money on special occasions

If you’re celebrating special occasions at home instead of out because you want to, that’s a great thing. But if the thought of spending extra money one month on a special occasion such as an anniversary celebration invokes fear about your finances, your financial situation might warrant a closer look.

8.The thought of being generous sounds exciting and not panic-inducing

Those with financial stability know that they have the money to give to a worthy cause if an opportunity comes up. Instead of worrying how giving away money might impact their ability to pay the bills, they cherish the opportunity to be able to help those less fortunate.

9. You’re happy about your financial situation

If the thought of your financial situation brings joy as opposed to panic and fear, you’ve likely created a stable financial situation. Those who are happy about their financial situations often report that a lack of debt and a plush emergency fund help to contribute to their financial happiness.

10. Saving money has become a habit

When saving money has become more automatic for you than spending money, you’re likely heading toward – or have arrived at – the land of financial stability. A habit of saving money means that your goals of financial comfort are being worked on and have trumped unnecessary purchases.

11. Others’ opinions about what you have/don’t have don’t concern you

If you no longer care about keeping up with the Joneses’, you’ve likely reached a place where you’re comfortable with your finances and find more security in being financially secure than in the opinions of others.

12. Paying the bills doesn’t require an in-depth plan

When we were in our financially unstable days, it required a well-thought out plan as to how we would be able to get all of the bills paid and still have money leftover for food. If your finances are in a good place, paying the bills isn’t a problem.

13. Retirement and/or kids’ college expenses are covered

If retirement or kids’ college plans are growing steadily thanks to a solid plan, you’re likely practicing financial soundness in other areas of your money life as well.

14. Your debt-to-income ratio is below 30%

The lower your debt-to-income ratio is, the more financial soundness you’ve created for yourself. Consider reducing or eliminating any monthly debt payments that are raising your debt-to-income ratio higher than you’re comfortable with.

15. You’re thoughtful about purchases

Most financially secure people don’t spend regularly on whims. Instead, they think carefully (but not obsessively) about purchases, working to determine whether or not the purchase is truly something that is important to them.

16. Avoiding/eliminating debt is a priority for you

The financially sound budget makes getting out of debt a top priority – unless they’ve got enough assets to cover the debt if it needs to be paid off immediately. Of course, there are exceptions to this rule, but financial stability and large amounts of debt generally don’t go hand-in-hand.

17. You budget or you’re so good at spending wisely that you don’t need to budget

Most financially sound people have such a clear handle on their spending priorities that either those priorities are worked into their budgets or their budgets are so clearly memorized that they don’t need to budget (See our recommended budget percentages). Another option is to use a tool like Personal Capital to keep a handle on your spending.

18. You have a plan for the unexpected

A financially stable person generally has some type of plan for the unexpected, whether that means life insurance, disability insurance or a hefty emergency fund.

19. You buy appreciating as opposed to depreciating assets

Depreciating assets such as new cars and other toys are not a priority for the financially sound person. Instead, they’re more likely to focus their money toward index funds or other wealth-building “purchases”.

20. Large purchases don’t create a damaging ding in your finances

Financial soundness means that large purchases such as autos, home repair purchases or vacation expenses don’t put a serious dent in your money situation. They simply aren’t a big deal.

Quiz Score:

  • 16 – 20: You’re kicking it! You’ve arrived at the land of financial stability and are dwelling there comfortably
  • 11 – 15: You’re doing very well! You’ve conquered most of the obstacles that prevent people from achieving financial security
  • 6 – 10: You’re off to a good start! You’ve implemented some of the factors that lead to financial stability, but there are still some factors that should be worked on to get to a more financially secure place.
  • 0 – 5: You’ve got room to grow. Use the tips on this list to help create a more financially secure life for yourself and/or your family, and watch as your peace grows along with your financial stability.

Financial stability depends on many things, however; it’s mainly about having a firm grasp on your money and where it’s going, ensuring that your money works for you instead of you working so hard for your money.

What signs do you think help determine whether or not a person is financially stable?

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