8 Signs You Are Financially Stable

Alix Tucker, CEO of Finance with Alix

Did you know that 90% of Americans stress about their financial situation? Most people dream of achieving financial stability, a state where they have control over their money and can meet their financial needs without that constant worry. 

It's fascinating that taking charge of our finances can lead to a happier, more balanced life. When we do so, we can focus on things that truly matter, like spending quality time with loved ones or pursuing our passions, all while leaving our money-related stress behind. 

As someone who's been through the ups and downs of personal finance, I want to share my journey and the signs that helped me realize I was finally financially stable. My goal? To help you identify these signs in your own life and inspire you to take control of your finances. 

So, would you consider yourself financially stable yet? Let’s find out.

You Follow a Budget

One of the first signs that I was on the path to financial stability was when I started following a budget consistently. I remember feeling overwhelmed by my finances, unsure of where my money was going each month. I decided to create a budget to track my income and expenses and quickly realized that a lot of my spending was unnecessary.

Following a budget allowed me to regain control over my financial life. By allocating a specific amount for each category, I was able to make conscious decisions about my spending and ensure that my money was going toward my financial goals. If you're consistently following a budget, it's a good sign that you're financially stable or well on your way to achieving it.


You Save 20% or More of Your Income Consistently

As I continued following my budget, I realized the importance of saving money. Financial experts often suggest saving at least 20% of your income, and I made it a priority to reach that goal. This meant cutting back on non-essential expenses and finding creative ways to save, like starting DIY projects and doing no-spend weekends.

Consistently saving 20% or more of your income is a strong indicator of financial stability. It shows that you're living within your means and prioritizing your financial future. More importantly, having a healthy savings account can provide a sense of security, knowing that you have money set aside for emergencies or future goals.

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You’ve Paid Down Your Debt

Debt can be a huge burden during a recession, as interest rates tend to rise and make monthly payments more challenging to manage. One of the best moves you can make right now is to prioritize paying down high-interest debt, like credit card balances, to avoid getting caught in a debt spiral. You might even want to consider refinancing your mortgage or student loans for more favorable rates if possible.

Of course, while you won’t be paying off everything overnight, having a plan in place can really make a difference.

Bills are Paid On Time

In the past, I occasionally found myself scrambling to pay bills at the last minute or even incurring late fees. I began making a conscious effort to stay organized and pay my bills at a set time each month. This not only improved my credit score but also helped me avoid unnecessary stress.

Paying your bills on time shows that you're responsible with your money and able to manage your cash flow effectively. It's also an essential habit for maintaining a good credit score, which can impact many aspects of your financial life, such as your ability to secure loans or rent an apartment.

Clear Financial Goals

Setting clear financial goals gave me a sense of purpose and direction as I made decisions about my finances. Whether it was saving for a down payment on a house or investing for retirement, having specific goals helped me stay focused and motivated.

These goals almost acted like a road map, where I could have a solid plan in place to make my dreams a reality.

Invest Consistently

Investing used to intimidate me, but especially after being in debt, the importance of investing in the stock market dawned on me. I started putting a portion of my income into low-cost index funds and contributing to my retirement accounts.

Consistent investing means you’re thinking long-term. As your money grows, it can help you achieve your financial goals faster, whether it's retiring comfortably or funding your child's education.

You Have Insurance

When you have proper insurance coverage, you’re essentially protecting yourself and your assets from life’s unexpected twists and turns. Whether it’s health, auto, or life insurance, having the right coverage will help you prevent your finances from going off the rails if anything should happen.

You Don’t Have Worries About Money

Finally, and arguably most importantly, my worries about money greatly decreased as I became financially free. While I still have concerns and uncertainties from time to time, I don’t have to experience the constant anxiety that once plagued me.

If you find that money worries aren't consuming your thoughts as much as they used to, it's an excellent sign that you've achieved financial stability. It's a testament to your hard work and dedication to taking control of your finances, and it means you can focus on other aspects of your life with a sense of inner calm.

Embracing the Journey: Reflecting on Your Path to Financial Stability

Achieving financial stability is a journey that requires discipline, persistence, and a healthy dose of curiosity. As you spot these eight signs in your own life, you'll be able to see how far you've come and keep pushing forward toward that secure financial future. The journey to financial stability is unique for everyone – but with commitment and determination, you can create a financial life that brings you confidence, security, and freedom.

If you're looking for more advice and insights on how to become financially stable, be sure to let us know in the comments below!