20 Signs You’re Financially Better Off Than the Average American

In an economy characterized by a huge rich/poor divide, recognizing one’s own financial stability compared to the broader population can bring a fresh perspective and feelings of gratitude. Here are 20 signs that suggest you’re financially privileged and significantly better off than the average American.

No Credit Card Debt

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According to Forbes, the average American household has $6,000 in credit card debt and must deal with the burden of monthly payments and increasing interest rates. If you can pay off your statement in full each month, or better yet, don’t even have a credit card, you’re one of the lucky few who have avoided the ‘debt trap.’

6+ Months Emergency Fund

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Financial advisors often recommend an emergency fund that covers three to six months of living expenses. However, Bankrate claims, “More than half of Americans don’t have at least three months of emergency expenses saved.” If your savings comfortably exceed this benchmark, you have a buffer against unforeseen circumstances that most Americans would envy.

Retirement Contributions

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Regular contributions to a retirement account indicate a healthy level of financial security. USA Facts says almost half of all American households had no retirement savings at all in 2022. If you’re fortunate enough to be maxing out the annual limits for IRAs or 401Ks, your golden years are set to be a whole lot more comfortable than the average person.

Home Ownership

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Many Americans have yet to own any property outright, without a mortgage. Axios states that only 39.3% of all U.S. homes are fully paid for, allowing their owners the opportunity for rental income and investment while reducing their monthly financial burden—not to mention the comfort of knowing their home is securely theirs.

Passive Income Streams

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Generating passive income means making money while you sleep. This can be from investments, stocks, and shares, or personal projects like online blogs and channels. Ramsey says such forms of income can be tricky to set up but can offer great financial security and independence once established.

Not Living Paycheck to Paycheck

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Brookings writes, “The research shows that around one-third of all U.S. households live hand-to-mouth.” This means they have no financial ‘breathing room’ and desperately rely on each month’s paycheck to survive. If you have even a little bit of money saved, you’re luckier or more financially astute than many U.S. citizens.

Health Insurance

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In the U.S., healthcare costs are a leading cause of bankruptcy due to the lack of a fully accessible public healthcare system. If you can afford comprehensive health insurance and don’t fear getting sick or injured, you’re at an advantage. Many Americans cannot afford such a reassuring promise of decent medical care.

Will or Estate Plan

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According to CNBC, 67% of Americans have no estate plan in place for when they pass away. If you do have one, and it’s appropriately updated, consider yourself ahead of the pack—such preparedness for the future will benefit both you and your heirs by reducing stress and ensuring your estate is distributed according to your wishes.

Travel for Pleasure

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Being able to afford regular vacations, especially international travel, indicates you are much better off than most of the U.S. population. The ability to travel far and wide for leisure without getting into debt signifies a higher-than-average disposable income, adequate time off, and enviable financial security.

No Concerns About Grocery Prices

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If you rarely worry about the cost of groceries or shop nonchalantly, chances are you can afford the increase due to an elevated level of financial ease. NerdWallet claims grocery prices increased by 2.6% from January 2023 to 2024, forcing many Americans to tighten their belts and reduce the quantity and quality of food they buy.

Other Investments

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Do you have financial investments beyond standard retirement savings? Then you’re more financially stable than the average American. Diversifying into stocks, bonds, real estate, or other forms of investment suggests your money is working hard for you, and you have enough spare cash to take advantage of such opportunities.

You Can Easily Afford Your Car

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Owning a vehicle, particularly a new one, without the burden of a high-interest loan or lease demonstrates above-average financial stability. The Street says, “A new car is out of reach financially for 78.4% of the population.” This is largely because many households earn less than a benchmark $100K a year.

Children Have Secure Education Funds

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Whether through a 529 plan or another savings type, having the means to save for your children’s education without compromising your financial well-being is a significant indicator of wealth. With education costs continuing to rise, even small American families often struggle to finance quality education for their children.

Quality Life Insurance

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According to LinkedIn, there are various valuable benefits to purchasing a comprehensive life insurance policy. While many people with dependents and loved ones fail to afford such expensive peace of mind, such policies offer financial security in the face of the unknown and the ability to plan for all eventualities.

Professional Financial Advice

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If you can afford to pay someone to tell you how to manage and invest your finances, chances are you have more than a few dollars to rub together! Employing the services of a financial advisor for personalized recommendations is something the average American may find absurd, as they struggle to afford daily expenses and necessities.

Never Use Payday Loans

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If you never need to use more predatory lending options, like payday loans or cash advances, you’re likely financially comfortable enough to absorb unexpected costs and additional purchases. Many people in the U.S. rely on such services to stretch out their finances during hard times, significantly increasing stress and dependence.

Exceptional Credit Score

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An excellent credit score is a strong indicator of lifelong wealth—it reflects a history of timely repayments and responsible credit use while opening the door to the most beneficial financial products and lowest interest rates. Americans who have struggled with debt don’t have this advantage and are often trapped in a cycle of high-interest debt and low credit scores.

No Medical Debt

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KFF writes, “Approximately 14 million people (6% of adults) in the U.S. owe over $1,000 in medical debt, and about 3 million people (1% of adults) owe medical debt of more than $10,000.” If you have no (potentially crippling) medical debt whatsoever, you aren’t in the minority, but you are luckier than many of your fellow Americans.

You Can Say No to Work

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If you’re in a position where you can turn down opportunities to earn money without worrying about the economic implications, congratulations—you’re in the financial minority! Having the freedom to decline too much work or jobs that don’t suit your interests is a luxury many people cannot afford.

You Control Your Work Schedule

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Having control over your work hours or the ability to work remotely signals that you’re valued in your field and have reached a level of financial security that doesn’t require ‘bowing down’ to the whims of others. Many workers are entirely at the will of their employers, with little flexibility to adjust their schedules for their own convenience.

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