There are so many choices to make for your money that it’s easy to feel like you’re doing something wrong.
But chances are, you’re doing something right, too. Maybe the good choices you’re making haven’t led to overnight millions or a cover story on Forbes, but all the same, they’re putting you ahead of pack.
Read on for seven signs you’re doing something right with your money.
You can pay your bills each month.
A 2015 survey from the National Foundation for Credit Counseling and personal finance site NerdWallet, conducted by Harris Poll, found that about a quarter of Americans aren't able to always pay their bills on time.
There are a few positive implications that go along with making punctual payments in full, without using credit cards or other forms of credit to bridge the gap:
• You have enough money to cover your bills.
• You're keeping track of the debts you owe.
• You're choosing to spend your money where it's needed rather than where you want. (After all, no one is technically stopping you from spending your utilities money on bottle service at a club).
You've given a thought to the future.
No one can predict the future, which makes it awfully hard to set aside money for things you don't know will happen, like buying a house, buying a car, having a wedding, having a baby, taking an international trip, having a medical emergency, losing your job, moving, putting a kid through college, or retiring.
If it seems glaringly obvious to you that you'll be at least in part responsible for covering some of these costs, should they arise, you're on a good path. Are you saving money with goals like these in mind already? Even better.
You're without credit card debt.
A survey from MagnifyMoney found that over 42% of Americans hold an average of nearly $11,000 in credit card debt.
Accumulating a balance like that is easier than it sounds. Many people who find themselves in credit card debt haven't turned to the cards in an emergency — just the slow creep of living beyond their means one day finds them thousands of dollars in debt.
Credit card debt is often held up as the prime example of 'bad debt' for two reasons: First, your debt doesn't build or improve anything while you hold it, and second, it's expensive. Interest rates on credit card debt can easily top 10% (in fact, that would be considered 'low'). Compare that to mortgage interest rates (currently around 4%) and student loan interest rates (they vary, but federal loan rates can be in the 4%-6% range).
If you've eliminated your credit card debt — or managed never to rack up any in the first place — you should consider it an achievement..
You've been able to manage an unexpected expense.
The Washington Post points to a study from the Federal Reserve which finds nearly half of Americans don't feel they could cover an unexpected $400 expense without dipping into credit or selling something to generate cash.
Could you? Have you?
Perhaps you lost your prescription glasses and had to replace them. Maybe your kid needed a whole new set of practice uniforms for the soccer team. You may have broken your phone and had to get a new one right away.
If you could weather an unexpected expense with just a sigh and a check, you're doing something right.
For the record, experts recommend setting three to eight months of living expenses aside in an easily accessible savings account for a potential emergency
You aren't putting all of your eggs in one basket.
You've probably heard the word 'diversification' as an investment concept, where it defines the idea of spreading your investments among a wide variety of securities and funds, just in case one (or more) doesn't do so well.
This concept also applies to your personal finances overall. Consider it not putting all of your eggs in one basket. Because what if the 'basket' drops?
Even if you don't call it 'diversifying,' trying more than one thing with your money is probably a smart move. You don't just have a savings account; you also have an investment account. You don't just have a 401(k); you also have a Roth IRA. You aren't just angling for a raise; you're also funding a side business.
The more avenues you try, the more chance one will help you build wealth -- or at least cushion the blow if another avenue drops off a cliff.