20 Signs That You’re Financially Stable

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How can you know you’re living a life of financial stability? How can you tell if you’ve got work to do in creating financial stability?

People have differing opinions on what financial stability is. However, you can watch for signs that can indicate you’ve hit the mark. The 20 signs we’ve outlined below can help you determine the answer to that question.

By themselves, the 20 signs won’t guarantee financial stability. To be sure, it’s easy to put your head in the sand at times. However, if you can say “yes” to most of the statements below, it’s a good sign. It’s an indicator that you’ve created a stable money situation.

Financial stability can be a hallmark of a peaceful life. Has your money situation ever kept you awake at night with worry? Have you been stressed as you pay the bills, wondering if you’ll have the cash to do so?

You can make some changes and get to a place of financial stability. As a result, it will help ensure you won’t have those worries any longer. Take the test below and see how you rank.

You Are You’re Financially Stable If

Many signs can give you an indicator of your financial situation. Note that answering “yes” isn’t proof positive that you’re money smart. Some people can live in denial for years and be fine with it. But if you’re honest, you’ll benefit yourself. You’ll know whether you’ve achieved true financial stability. Or are at least on the way to achieving it.

1. You’re at Peace With Your Financial Situation

Have you created a financial picture that ensures money worries don’t exist? If so, this could be a sign that you’ve achieved financial stability. Note that we’re talking non-worry based on fact as opposed to denial.

We’re talking true “I’ve got things covered” confidence in your finances. You’re certain that you’re in a good financial place. And that confidence helps you sleep at night.

2. You Don’t Fight Over Money With Your Spouse

Do you and your spouse get in money fights on a regular basis? This could be an indicator that some financial worries exist. Or it could indicate that one spouse places too high a value on money.

Conversely, are you and your partner both comfortable with your finances? Have you created your money goals and the plan to achieve those goals? If so, it’s possible that financial stability has arrived. If you’re unsure if your partner is happy with your money situation, ask.

Some people won’t say they’re unhappy until they’re at the boiling point.

3. You Don’t Use Your Credit Cards (Or You Pay Them in Full Each Month)

Choosing to use credit cards and pay them off each month to earn rewards is fine. Having to use your credit cards every month due to a budget shortfall isn’t.

If credit cards aren’t a necessity in your life, that’s a sign you’re doing great. However, if you depend on them for survival, your money plan needs help. Or you need to create a money plan. Having unpaid card balances each month is a roadblock to stable finances.

4. You’ve Got a Plush Emergency Fund Balance

People have differing opinions on what an ample emergency fund is. A full emergency fund typically covers 3-12 months worth of expenses.

Do you have an ample emergency fund balance? That’s a great sign that your money is in order.  A healthy emergency fund balance shows maturity. It means you’ve taken the time to make savings a priority over spending.

If your emergency fund is sparse, make a plan for increasing your savings rate. And work to earn the best interest rate on that savings account. Read our CIT Bank review to see how you can earn higher interest on savings. CIT Bank pays 1.55% on savings account balances.

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 mean implementing a slight course correction? Would you simply modify spending until you get a new job?

If the thought of losing your job requires a quick transfer from savings, you’re doing great. However, if a job loss means financial doom your budget needs a remodel. Start by creating an emergency fund. Sell stuff or start an automatic savings plan. Those actions will help you increase savings.

6. Financial Emergencies Don’t Invoke Panic

When our money situation was a mess, emergencies were a big deal. A broken water heater or large car repair would have us panicking BIG time. We’d scramble to see if we had enough on the credit cards to make the purchase.

Also, we’d wonder if we could handle the bigger payment the purchase would produce. Today, financial emergencies are no longer a full-scale disaster. This is because we’ve drastically reduced our debt and increased our savings.  If you can say the same, financial stability is within view. It may have even hit shore.

7. You’re Okay With Spending Money on Special Occasions

If you’re celebrating special occasions at home because you want to, great! But if the thought of spending extra money one month produces fear, look out. Your financial situation might warrant a closer look.

Money is a tool that is meant to make our lives better. Are you afraid to spend on a special occasion because of money issues? Or is it because money has become too important in your life? Either way, your financial house might need some tweaks.

8. The Thought of Being Generous Sounds Exciting

One benefit of financial stability is that you can help others. You know you’re financially sound if you have money to give to a worthy cause.

Those with financial stability cherish the chance to help others. The fear of being obligated to help others doesn’t exist. Again, having the right attitude regarding money is a factor.

Conversely, have you adapted a hoarding mentality regarding money? If so, it may be time to re-assess your priorities. Generosity has a way of coming back to you. Giving breeds peace, contentment and wisdom.

9. You’re Happy With Your Financial Situation

Does the thought of your financial situation bring you joy? If so, you may have created a stable financial situation. Unstable finances breed fear. Those who have stable finances report that money doesn’t upset them. They report that minimal debt and an emergency fund help them feel at peace.

Work to get your money in a place that breeds peace. Pay off debt, build savings and minimize financial waste.

10. Saving Money Has Become a Habit

Has saving money become automatic for you? Are you on “set it and forget it” with your savings plan? If so, you’re heading toward the land of financial stability.

A habit of saving money means that you’re working on your financial goals. It may mean you’ve conquered a habit of making too many wasteful purchases. A plush savings account means no more money struggles. Start on your savings habit today if you haven’t already.

11. Others’ Opinions of You Don’t Concern You

This is one of my favorite parts of financial soundness. My family and I moved from the city to the country in 2012. And we began a plan for financial stability. Along with that plan came the abandonment of what others thought of us.

Have you stopped caring about competing with others for possessions? If so, you may have reached a place of comfort with your finances. Or at least with your financial plan. You’ve found security in being money smart. You no longer care to keep up with the Jones’.

12. Paying the Bills Doesn’t Require an In-Depth Plan

When we were struggling with money, it required a detailed plan to get the bills paid. Creative financing was a must every month.

Today we pay the bills as they come in and don’t give it a second thought. If your finances are in a good place, paying the bills isn’t a problem. It’s just another everyday task you complete.

13. You’re Contributing to Retirement and/or Kids’ College Expenses

Are you on track for a plush retirement savings account? Have you implemented a plan to help your kids with college expenses? Are retirement or kids’ college plans growing? If so, you’re learning the importance of practicing financial soundness. Welcome to financial stability.

14. Your Debt-to-Income Ratio (DTI) is Below 30%

The lower your DTI, the better your financial situation is. Eliminate debt payments if possible. Work to ensure your DTI isn’t higher than what you’re comfortable with.

This could mean paying off debts. It could also mean reducing other regular expenses. Try using a Challenge Everything Budget. It will give you additional money each month for reaching financial goals.

15. You’re Thoughtful About Purchases

Notice I said “thoughtful” and not “paranoid.” Most money-wise people don’t regularly spend on whims. Instead, they’re thoughtful regarding purchases. They work to determine whether the purchase will add value to their life. This is Value Based Spending.

16. Avoiding and Paying Off Debt is a Priority For You

The smart budget makes getting out of debt a top priority. Of course, there are exceptions to this rule. You might be carrying some “good” debt such as student loans. But debt freedom equals financial stability. Financial stability and large amounts of debt don’t go hand-in-hand.

17. You Budget or You’re So Good at Spending Smart That You Don’t Need to Budget

Most money-wise people have a clear handle on their spending priorities. Those priorities exist in their budgets. Or they’ve memorized those priorities so that they don’t need to budget.  (See our recommended budget percentages). Another option is to use a tool like Personal Capital. They have free tools to help you keep a handle on your spending.

18. You Have a Plan for the Unexpected

A person with stable finances has some type of plan for the unexpected. That might mean a plush emergency fund or life insurance policy. Disability insurance and other backup tools are important too.

Unexpected events such as job layoffs and injuries do happen. Make sure you’re practicing financial stability by having a plan in place. You’ll want to be able to cover those unexpected events.

19. You Buy Appreciating as Opposed to Depreciating Assets

Assets such as cars that decrease in value aren’t important to the wealthy. Instead, they focus their money toward index funds. Also, they buy other wealth-building “purchases” such as real estate investments.

Real estate investing is available to everyone these days. This is true even if you don’t have a lot of cash. Companies like Fundrise help you invest in real estate for as little as $500. 

20. Large Purchases Don’t Create a Damaging Ding in Your Finances

Financial soundness means that large purchases such as home repairs don’t worry you. They won’t put a serious dent in your money situation. In other words, they aren’t a big deal. They’re a non-issue to deal with, and you don’t lose sleep over them.

All right – you’ve answered all 20 questions. How did you score? Check out the scoring chart below.

Quiz Score

  • 16 – 20: You’re kicking it! You’ve taken up residence in the land of financial stability.
  • 11 – 15: You’re doing great! You’ve conquered most of the obstacles that prevent people from building wealth.
  • 6 – 10: You’re off to a good start! You’ve implemented some of the factors that lead to financial stability. However, there are ways you can increase financial stability,
  • 0 – 5: You’ve got room to grow. Use the tips on this list. They will help create financial security for yourself and your family. Watch as your peace grows along with your stabler money situation.

Financial stability depends on many things. However, it largely rests in having a firm grasp of money management. Also, you need to ensure your money is working for you. This is key to helping get the maximum benefit from your money.

What signs do you think help determine whether a person has stable finances? How can you improve your financial situation? Are there signs on this list that you feel you need to work on? Share your thoughts by leaving a comment in the comments section. 


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24 COMMENTS

24 responses to “20 Signs That You’re Financially Stable”

  1. SavvyJames says:

    This is a great list … and an even better feeling knowing that I land squarely in the 16 – 20 range.

    • Laurie @thefrugalfarmer says:

      Congrats, James! Although I’m not surprised. 🙂 It must be awesome knowing that you’ve turned your financial life around and gotten to a really great place, my friend. 🙂

  2. Claudia @ Two Cup House says:

    Thanks for this excellent post–it helped me put in perspective what we’ve accomplished so far and what’s still left to achieve. Being more thoughtful about purchases is one of the areas we’ve made significant changes in that we’re proud of. 🙂

    • Laurie @thefrugalfarmer says:

      Claudia, huge congrats on your achievements to date! I think that learning to be more thoughtful about purchases is one of the very good signs that you’ve made real progresses in money management. Keep us updated on your progress!

  3. Brian @DebtDiscipline says:

    I love the list and the feelings I have with a high score. Once we got our finances in order it reduced a lot of stress and second guessing.

    • Laurie @thefrugalfarmer says:

      Brian, your story inspires me every day – every time I get discouraged and every time I think we’ll never be debt free. You and your family have accomplished big things, my friend!

  4. Paul Moyer @SavingFreak says:

    This is a great list! In everyday life, those of us who are actually financially stable can use these reminders that we are doing pretty well even when times are rough. In the last six months I have had an unexpected kitchen remodel (water damage) and two car repairs and we didn’t even touch our emergency fund. That kind of stability gives you the ability to think much more clearly.

    • Laurie @thefrugalfarmer says:

      Paul, what an AWESOME testimony! I’m SO happy for you guys that you are truly financially stable. What a great place to be!

  5. Thias @It Pays Dividends says:

    I love lists like this because it helps provide some reassurance that we are on the right track with our finances! We just need to make sure we keep working and don’t get too comfortable. There are always improvements that can be done.

    • Laurie @thefrugalfarmer says:

      Thias, it’s SO true that improvements can always be made. It sounds like you guys are on the right track and moving forward, though. Congrats!

  6. Abigail @ipickuppennies says:

    I hit a few of these, but we have too many priorities right now to say that we’re financially stable, especially with a $25k medical bill coming ’round next year. That’ll set us back to square 1. Then we can start building actual financial stability.

    • Laurie @thefrugalfarmer says:

      Abigail, I have no doubt whatsoever that you’ll get there. Commitment is half the battle. Keep up the great work!

  7. TheMoneyMine says:

    Hi Laurie,
    I like the format of your post. It rapidly creates a connection with the reader. Finding out that I get 20 is very satisfying. You made my day. Thank you. 🙂
    Nick

  8. Nate M. says:

    There is definitely room to improve in my world, but at least we are getting close.

  9. Alan H says:

    “You don’t fight about money with your spouse.” That’s perhaps the best sign. =)

    “A job loss wouldn’t mean you couldn’t pay your bills.” That’s exactly my goal. Being financially independent can help with achieving it provided that the 2nd job brings enough money at the end of the month.

  10. Scooze says:

    I was directed to this site by the Enemy of Debt link. It’s a great list – I scored a 20.

    I sold my car over four years ago. I would say, for me, it was a combination of #11 – I just don’t care what anyone thinks of the fact that I don’t have a car (I take the bus daily – I have much poorer friends who shudder at the thought) – and #19 – there is so much more I can do with that money. I have never thought of it in the terms that you listed, so thanks for the list!

  11. Adam @ AdamChudy.com says:

    Laurie, you know everybody is a sucker for a good quiz. I’m pretty happy with where I landed, right up there about 20.

  12. Heather @ Simply Save says:

    I had to put #5 to the test this summer and because I have most of the other items in order, it was actually ok! I’m even more grateful I have my finances in order now that I lost my job, and it’s motivating me to keep them in good shape!

  13. Kurt says:

    These are really good! I had a thought for one more: you don’t suffer from “stuff envy”. For example, when you visit middle income friends’ who have all granite, BMWs, Apple Watches, expensive vacations, etc. etc., instead of wanting the same you think, “I wonder what their credit card balances look like”.

  14. Ilse says:

    This is such a great tool! I’m at the beginning of my budgeting, which is very scary. I took the time to take your test and will do so again in three months. I would like to translate it in French if that’s ok with you so I can blog about it. Weirdly enough, there are absolutely no finance blogs in France, or at least not kept by common people. Only very professional blogs which give you tips and tricks with too high a gradient for people to feel comfortable with. So, I am giving it a shot. 🙂

    So, congrats on this list! It’s very useful and scary indeed!! 🙂

  15. Steve @ ThinkSaveRetire.com says:

    This is an interesting list, and I’m pretty much there on every one of these. I’m about 1.5 years away from retiring in my 30’s. I better feel comfortable with my situation and avoid debt…or I’d be in some serious trouble. I would say #1 and #9 are awfully close to one another, though. 🙂

  16. Mr. Crackin' says:

    This is an awesome article. Wow! I’m in the 16-20 range. That’s unexpected. Go Mr. Crackin’! *Dances in circles* I’m not sure about the kids college fund. They might pay for their school on their own. Maybe paying for it will teach them not to waste so much time partying.

  17. Elle @ New Graduate Finance says:

    This is great stuff! I definitely have several things to work on, like feeling comfortable spending on special occasions. There’s always room for improvement.

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