There is so much stigma around money. A 2018 Capital Group survey reported that people are more comfortable talking about race, sex, politics and mental illness with their friends than they were talking about their salary, debt and retirement savings. These feelings around money can make us feel like we have no sense of right and wrong around finances. We feel it’s not appropriate to talk about money, so we have no idea how our situation compares to others’. The good news is that there are signs you can look for to indicate exactly how good you are with money. If you’re doing these things, you’re actually doing pretty great at budgeting and don’t need to worry.
You Have a Budget
Obvious answer, but 20% of Americans don’t have a budget. Making a budget makes you aware of how much you have, what you’re spending it on, and gives you the power to curb any bad money habits. It also gives you a plan so you make financial goals, and see how long it will take to achieve them. If you have a budget, you’re on the right track to making sound financial decisions.
You Aren’t Overdrawing
When you pay for stuff, is your debit card always going through? That’s a sign you’re good at budgeting. This might seem simple, but it means you’re not spending above your means. You know how much is in your account and you only spend what you have. Overdrawing your account is not only a sign that you aren’t managing your money well, but it can cost you even more in fees. Staying in the black shows you can afford everything you’re buying.
You Pay Bills On Time
If your bills are paid in full and on time every month, that shows you budget enough money to afford your necessities. You know when bills are due and are always prepared with the money to pay them. Bonus points if you have calendar reminders set for the exact date bills are due, or automate your bill payments.
You Have Savings
A recent survey showed that 25% of people have no savings whatsoever. If you have a savings account with cash in it, you’re already managing money better than one out of four people. The recommended savings goal is to have three months of living expenses saved up. If you have that in your account, you’re doing better than 51% of Americans. You’re not spending all of your money as soon as you get it, but rather you’re planning smartly for your future.
You Don’t Have Credit Card Debt
The average American owes $6,194 in credit card debt. If you don’t have any credit card debt whatsoever, you’re doing really well. A recent GOBankingRates survey found that 30% of Americans have between $1,001 and $5,000 in credit card debt, 15% have $5,001 or more in credit card debt and about 6% have more than $10,000 in credit card debt. Not having consumer debt means you don’t buy things you don’t have the cash to pay for, nor do you make impulse purchases that end up coming back to bite you later. You set aside cash for the things you really want, rather than relying on credit.
If You Do Have Debt, It’s Going Down
Having debt of any sort, whether it be student loans, mortgages or credit cards, is a normal part of the American experience. Knowing your credit score and making steps to improve it shows you’re invested in your financial future. If you’re budgeting well and making over the minimum payment required, you’ll start to see your debt decrease. As long as your debt is shrinking, rather than growing, you’re making smart financial decisions.
You Don’t Worry About Money That Often
Of course all of us have moments where we’re concerned about our financial future, but if you’re not constantly stressing over how much things cost and how much money you have, it’s probably a sign that you’re managing money well. If you were constantly missing payments or not being able to afford the items you needed in life, money would dominate your thoughts. Having it only be a passing concern shows you know what you’re doing.
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Original source: GoBankingRates
