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33 Signs You’re Financially Stable


Staff member
Dec 14, 2023
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I remember the trip to Target like it was yesterday. My wife and I were trying to decide between dental floss and aluminum foil. As newlyweds who were still paying off my debt, we had no breathing room.

We were not the picture of financial stability. Being financially stable means one thing – having peace of mind.

We did not have peace of mind in Target that day. We were at a dead end and had no idea how to improve our situation.

Fast forward nearly 20 years and a lot has changed for us. We max out our retirement accounts every year, pay off our credit cards in full each month, and spending just to spend holds no value to us.

What Does it Mean to be Financially Stable?​

Becoming financially secure means you have no high-interest debt and paying all of your bills each month while still having money at the end of the month. This gives you the ability to reasonably do what you want by not having to worry about not being able to handle it financially.

A financially astute person looks not only at the short-term impact of their decisions, but the long-term as well. They actively save money and invest at least five percent of their income each month. By giving each dollar a purpose, they create freedom for themselves.

What are Signs You Are Financially Stable?​

There is not one single trait that makes you financially secure. As anyone who is interested in personal finance knows, it’s the whole picture that determines whether or not you’re in good financial shape.

We all have different journeys, so every situation is unique.

Review the following signs and use them as a starting point to gauge your financial stability.

1. You Can Handle an Emergency​

One of the first signs of being financially comfortable is having a well-stocked emergency fund.

Emergencies happen all the time. Unfortunately, many people don’t have emergency savings in place.

Most experts say you need to have an emergency fund that covers six to 12 months of living expenses. While it may feel overwhelming to save that amount, don’t get discouraged.

Start with a goal to save $250 and build from there. Maybe you can set aside $50 from each paycheck to reach your goal. Eventually, you will have several months of expenses in your emergency savings.

If you’re trying to figure out how to become financially stable and are not currently saving, pick an online savings account with no fees. CIT Bank is a great option since it pays interest and you can automate transfers.

You only need to deposit $100 to open a high yield savings account or money market.

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2. You Have No Problem Splurging on Yourself​

Splurging has a lot to do with financial security. If you can splurge, it means that your budget can withstand a special purchase without hurting your financial health.

Keep in mind that using your credit card without knowing when you’ll pay it off is an entirely different thing.

Try setting aside cash each month for planned large purchases. You can also wait at least 24 hours before making an expensive impulse purchase.

3. You Invest Every Month​

Not investing every month was a financial mistake I made for far too long. I thought I needed to have a lot of money to start investing, so I held back.

It is easier than ever to invest small amounts of money. Many brokerages now let you buy fractional shares of stocks and funds with as little as $5 per trade. You don’t pay trade commissions either.

Investing regularly helps grow your wealth and allows you to be financially comfortable in retirement.

Whether you invest in a 401(k) plan, an online brokerage account, or some other account, you’re actively looking for ways to make money in your sleep.

Regardless of your choice, investing is the best choice to improve your net worth.

If you don’t have a lot to start with, SoFi Invest can be a good option. The site has no account minimums and there are zero trading fees.

4. You Have A Low DTI​

DTI, or Debt-to-Income Ratio, measures your monthly debt obligations against what you make. Therefore, a lower DTI is better.

You can get a mortgage with a DTI as high as 43 percent, but that would be a poor choice for several reasons.

If your DTI is half of that, then you’re much closer to being financially sound because you will have more money to work with each month.

Having a low DTI can also help you when applying for jobs. While it may seem weird, some employers want to make sure you can handle money before they give you a lot of responsibility.

5. You Use Credit Cards Wisely​

Credit cards can be divisive, but I love them. Between the two of us, my wife and I have close to 40 cards. We pay our active ones off in full every month so we don’t have debt hanging over our heads.

Credit cards can be a terrific tool when you use them wisely. However, those who aren’t financially responsible may use credit cards to finance the kind of life they want but can’t afford.

The sky-high credit card interest rates they face as a result can make it difficult to pay off debt.

You’re probably financially secure if you use a credit card for convenience, to stretch your budget, or to earn rewards. Just make sure you don’t overspend thanks to the convenience of not having to pay off the balance immediately.

6. You Pay Off Your Credit Cards Each Month​

See the above. Paying off your credit cards in full every month is a good indication you’re doing well financially.

I can tell you from experience that the stress of not paying off your cards each month isn’t worth it.

Credit cards have some of the highest interest rates around. A small balance can quickly turn into a large monthly expense if you’re not careful.

Thankfully, there are ways to refinance credit card debt or get a lower interest rate.

7. You Don’t Fight with Your Partner​

Finances are one of the biggest reasons for divorce in America. Whether it’s due to financial infidelity or some other reason, money problems can wreak serious havoc on a marriage.

Make sure you and your spouse are on the same page when it comes to finances. You might want to schedule money dates to start working towards shared financial goals.

8. You Can Sleep at Night​

Being able to sleep because you don’t have money stress is the best part of managing your finances. Before we reached a moderate level of security, I couldn’t sleep at night.

I was fearful of many things, including:

  • Handling an emergency
  • Saving enough for retirement
  • Paying all of our bills on time

Now, I have peace of mind instead of unease. Peace of mind is an indicator of financial stability.

One quick way to reduce your money stress is by cutting your monthly expenses. Canceling unwanted services and renegotiating bills can require some upfront effort.

However, seeing how much extra cash you have each month can help you rest easy.

9. You’re Not Underwater on Your Car​

According to Edmunds.com, more than 60 percent of car loans are over five years in length. Additionally, the average car payment is over $500 per month.

A financially wise person sees cars as a depreciating asset. As a result, it doesn’t make sense to owe more than a car is worth.

Not being underwater on your car means you don’t extend a car loan for so long that you owe more than it’s worth. It doesn’t necessarily mean you’ve paid off your car.

Instead of buying a brand new car, consider purchasing one that’s one or two years old. Even though it might not have the new car smell, the car is likely several thousand dollars cheaper, has low mileage, and is mechanically sound.

You can even buy a car with cash if you want to avoid a loan at all costs.

10. You’re Not Scared of the Future​

A financially sound person smiles when they think about the future. They’re excited about opportunities and what they may bring.

On the other hand, financial instability stokes fear. You might worry about what retirement may look like or if you’ll be free of debt. It’s easy to become paralyzed when you feel afraid.

While no one can predict the future, have confidence as you learn from your mistakes. If necessary, talk with a friend that you trust to help you plan your future.

11. Killing Debt is Your Top Goal​

Attacking debt is the top goal of those seeking financial stability. Debt enslaves you to someone else and restricts your freedom. Your monthly expenses are also higher, leading to more stress.

A wise person has a plan to eliminate debt or is already debt-free. If you have debt, consolidating it to a lower interest rate and paying it off is the best way to get rid of it.

12. You Live Below Your Means​

Many economically stable people are great about spending less than they earn. This is by no means scientific, but I’d say saving at least half of your income is a good place to start.

For instance, if you earn $4,000 per month, you might keep your monthly expenses below $2,000. It becomes easier to live below your means as you pay off debt and avoid unnecessary purchases.

This can even be done on a variable income. Essential to this is creating a budget so you can identify areas to cut back on so you can optimize your spending.

13. You Track Your Spending in Some Fashion​

Budgets don’t work for everyone. However, that doesn’t mean you shouldn’t track your spending. Being financially independent means you know where your money is going and how it is working for you.

Writing each expense on paper or browsing your monthly bank statements might work for you.

Try a tool like Tiller if tracking your spending is overwhelming. Tiller pulls all of your banking information into a Google Sheet so you can see all your spending in one place.

The app costs $7 per month after a free 30-day trial.

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14. You Can Handle Large Purchases​

Large purchases are expensive and can include anything from buying a new-to-you car or replacing the air conditioner in your house.

Regardless of what it is, you’re able to make large purchases (most likely because you’ve planned for them) with no sweat.

Consider putting money into a sinking fund for a specific expense. Even if you only have a small income, these special funds can help you afford large purchases.

15. You’re Financially Naked with Your Partner​

Remember the section about not fighting with your partner? Being financially naked with your significant other is a big part of that.

A responsible person shares all things financial, good and bad, with their partner.

Being honest can hurt at times. However, total transparency can lead to a stronger relationship because you’ll be financially comfortable with each other.

16. A Job Loss Isn’t the End of the World​

Losing a job can be traumatic. Being financially astute allows you to roll with the punches of a job loss thanks to an ample emergency fund and other savings.

This allows you to take your time and find the right job for you instead of jumping blindly at the first opportunity that comes along.

Read our guide on what to do if you lose your job and need to learn what steps you need to take.

17. Invest In Yourself​

Whether you’re in between jobs or are happy with your current employer, you should always try to improve your skills. Investing in yourself can increase your income potential at work or allow you to have multiple income streams.

Another option is learning how to complete your own home and car repairs. Your new skill will reduce your unplanned expenses when something breaks.

18. You Make Extra Money on the Side​

Making extra money can mean many different things. For instance, it may mean you actively take on new roles in your day job.

It may also mean starting a side hustle to earn a few extra bucks in your free time. If you use the money to kill debt or invest, even better.

Read our guide on the top side hustle apps you can use to earn money if you don’t know where to start.

19. You’re Not Underwater on Your House​

Remember the section on car payments? Similarly, a financially wise person isn’t going to be underwater on a home. This means your mortgage isn’t more than your house value.

If you are underwater on your home, that’s typically a sign of buying too much house or not planning properly. While houses aren’t investments in many cases, you want to build equity on your home right away.

20. You Take Care of Your Health​

A financially stable person sees the impact health has on their finances. Medical bills can quickly erode the hard work you put into becoming financially secure.

This is the main reason why I lost 100 pounds on Nutrisystem. It’s important to acknowledge that health and finances are often intertwined.

Read our Nutrisystem review to see how you can find success on the plan.

Your doctor’s advice about having a sound diet and regular exercise may sound boring. However, these two factors are the best ways to control your health and reduce stress.

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21. Your Net Worth Goes Up Each Year​

The ultimate goal of becoming financially independent is being able to grow your net worth year after year.

While some aspects of growing your net worth are out of your control, for example when you invest in the stock market, there are things you can control.

If you’re avoiding debt, saving more, and building streams of mailbox money via passive income apps, you can create an upward trajectory for your financial future.

Read our guide on how to double your money to identify ways to increase your net worth.

22. You Control Your Finances – Not the Other Way Around​

What do your finances look like? Are you in control of them or do they control you?

You can manage several different savings and deposits products from multiple financial institutions within a single account through Raisin.com.

Take advantage of high-yield savings accounts, money market accounts, and CD’s to earn more with less hassle.

Financial stability means you get to decide where your money goes instead of living paycheck-to-paycheck.

23. You Can Buy What You Want​

Financial stability provides the freedom to buy what you want. You are free from the fear of how you’re going to afford your purchase because you’ve saved the money you need.

If this describes you, then you’re economically stable. This doesn’t include using BNPL financing to purchase items. Read about the dangers of buy now pay later apps to learn why you should avoid them.

24. Spending Money Just to Spend Doesn’t Appeal to You​

This is the opposite of the above. In short, spending doesn’t appeal to you (even if you can afford it) because you see ways to put your money to better use.

25. You Automate Savings​

Automating my saving was one of the first times I felt confident with my money. Before, I was worried I’d need the money for debt payment.

Now I see it as a bill to my future self that works even while I sleep.

If you have automated your savings, then you’re doing a great job of figuring out how to be financially stable. Just make sure to pick a bank that pays more than .001 percent on your cash.

26. You Have Plans​

A financially wise person makes financial decisions to improve their future. This can involve planning for many things, such as:

  • Saving for retirement
  • Buying life insurance
  • Saving for their children’s college education

The amount you save towards each of these is personal, but financial stability means you plan for them all. Start by saving for your most important goals.

Then, allocate other cash for your secondary goals.

If you want a life insurance policy that adjusts with your needs in life, Everyday Life is an excellent option.

Fabric by Gerber Life is another great choice if you want affordable life insurance tailored to meet your specific needs.

27. You Get Rid of Bad Habits​

It’s crazy how much we spend on our bad habits. We’re all prone to them. However, a financially stable person actively seeks to cut those bad habits to save money every month.

Instead of wasting money, opt to grow your money.

28. Start a Cheap Hobby​

Having fun doesn’t have to be expensive. There are many cheap hobbies you can try today. For example, start a neighborhood league instead of buying season tickets.

It’s okay to splurge from time to time. But remember that having fun with friends doesn’t require spending lots of money each weekend.

29. Your Credit Score Doesn’t Scare You​

Credit scores aren’t perfect by any means, but I remember what my credit score was when I paying off debt. It was scary.

A credit builder loan from Self can boost a low credit score. Paying your monthly loan payments on time and keeping a low credit utilization ratio can help too.

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*Related: Do you need to buy life insurance? Check out our review of the best companies to get term life insurance without a medical exam for coverage options.*

A financially stable person has a good credit score. When they need to borrow, they get the best rates possible. However, you should pay with cash when possible to avoid paying interest.

30. Paying Bills Doesn’t Scare You​

Does the thought of paying your bills every month make you break into a cold sweat?

Trim can potentially negotiate lower rates for your recurring bills such as cable TV and your cell phone. This service can also help find discounts for your medical bills.

When you are financially stable, you can pay your bills each month with little stress because there are no surprises. Also, you should still have money left in your bank account after all your bills are paid.

31. You Can Give Without Fear​

A financially independent person can give without worry. They also make a plan to give.

Perhaps someone helped you become financially stable and you want to return the favor.

When you’re financially comfortable, you can give with ease and not fear what it could do to your finances. You might perform random acts of kindness, for example buying lunch for someone.

Or, you can schedule monthly payments to your favorite charity to help others in need.

One of the most exciting times to give is when charities have matching fundraising drives. For every dollar you give, another donor matches your donation.

32. You Don’t Bounce Checks​

This is one of the few things I didn’t do when I was in debt. A financially stable person doesn’t bounce checks. Mistakes can happen, but make sure you’re not actively bouncing checks all over town.

A financially confident person knows what they have in their bank account so they don’t watch their checks bounce like rubber balls.

Sometimes, money mistakes happen when you least expect. This is why several banks, including Chime Bank, offer free overdraft protection when you accidentally overdraft.

33. Missing A Paycheck Doesn’t Scare You​

Running our own business has helped me be more comfortable with missing a paycheck since clients sometimes pay late.

Financially stable people have funds in place to deal with temporary blips like this. And, this doesn’t include using an early wage access app to get the money you need.

Just make sure you replenish the funds in your savings account when you do get paid.


It’s important to remember that none of us are perfect. We all make mistakes and have hurdles to overcome. Financial stability is an ongoing long-term journey, not a destination.

The goal of that journey is to grow your financial knowledge and well-being. Both serve to help you live a life of freedom, not one of enslavement to others. This allows you to make choices that benefit you in the long run and lets you live the kind of life you want.

What are some other signs of financial stability?

*Chime is a financial technology company, not a bank. Banking services provided by, and debit card issued by, The Bancorp Bank or Stride Bank, N.A.; Members FDIC.

SoFi Invest refers to the three investment and trading platforms operated by Social Finance, Inc. and its affiliates (described below). Individual customer accounts may be subject to the terms applicable to one or more of the platforms below.

1) Automated Investing and advisory services are provided by SoFi Wealth LLC, an SEC-registered investment adviser (“Sofi Wealth“). Brokerage services are provided to SoFi Wealth LLC by SoFi Securities LLC.

2) Active Investing and brokerage services are provided by SoFi Securities LLC, Member FINRA/SIPC, (“Sofi Securities”). Clearing and custody of all securities are provided by APEX Clearing Corporation.

3) SoFi Crypto is offered by SoFi Digital Assets, LLC, a FinCEN registered Money Service Business.

For additional disclosures related to the SoFi Invest platforms described above, including state licensure of SoFi Digital Assets, LLC, please visit SoFi.com/legal.

Neither the Investment Advisor Representatives of SoFi Wealth, nor the Registered Representatives of SoFi Securities are compensated for the sale of any product or service sold through any SoFi Invest platform. Information related to lending products contained herein should not be construed as an offer or pre-qualification for any loan product offered by SoFi Bank, N.A.

The post 33 Signs You’re Financially Stable appeared first on Frugal Rules.
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