How do you feel about your finances? In your opinion, are you making the progress you want to make, or do you think you’re not where you should be with your finances? I ask this because we often don’t realise how much progress we ARE making. And in reality, we’re better off than we think!
Let’s look at several situations that will help us measure whether we are on the right track.
These points may not all apply to you, but if at least a few do, it’s a positive sign that you’re on the right track.
You have a good credit score :
Financial institutions consider a score of 680 or higher to be good. If your credit score is in that category, it indicates that you use your credit responsibly and that you consistently pay your bills on time. This gives you many benefits when applying for a loan or acquiring services for the first time, where they will be much more flexible and favourable with the required deposits if you have a good credit score.
You live without using your savings:
When you can make ends meet on what you earn, without using money you have in a savings account, it’s a good sign that you’re living within your financial means.
You regularly allocate money for savings and investments :
If your monthly budget includes regular contributions to savings and investment funds, it is a sign that you are not only living within your means but also building prosperity for your future self.
If you do not have a clear concept of how to make and carry out a budget in a simple way, I invite you to take my Simplified Budget course, where I explain in an enjoyable way how to organize your finances today, for a comfortable present and a prosperous future.
You use credit cards for convenience, not to finance purchases :
There are many benefits to using credit cards and I am one of those who rarely pays cash, I pay for everything with cards. But it is very different when we resort to using credit cards because we do not have the money to pay for the things we need. If you have the money to pay your financial responsibilities every month, that is a good sign.
You can fulfil your obligations :
If we take out a student loan, or a loan to buy a car, for example, and we pay the full amount on time, not just the minimum amount allowed, paying the minimum amount means increasing our debts and paying more interest than necessary. Responsible use of credit is an indicator that we are doing things right.
You have an emergency fund:
The vast majority of Americans do not have an emergency fund that would cover a $2,000 emergency. It is estimated that only 35% have at least three months’ worth of emergency expenses saved. If you are in the group that could pay that $2,000 in the event of an unforeseen event without resorting to loans or credit cards, that indicates that you are in a select minority and that is something to be proud of.
You can take vacations:
If you have the means to take a few days or a week off every year, it’s also a sign that you have a solid financial foundation. Sometimes we take it for granted, but in reality, many people cannot afford to go on vacation somewhere else, and pay for a hotel, meals, transportation, etc.
I have dedicated my professional life to tourism and I love travelling, I believe it brings multiple benefits, and that’s why I encourage people to take that much-needed recreation, but to do so you have to plan your finances. So, if you can afford to spend your vacation without going into debt, I congratulate you, it’s another sign that you’re doing very well!
Money is no reason for conflict:
If your finances are in order, money issues probably won’t keep you up at night or cause frequent arguments with your partner. This is important because our rest is sabotaged if we spend the night thinking about how we’ll pay the next rent or grocery shopping. When there are constant arguments about money, the integrity of the relationship is put at risk, and this is one of the main causes of divorce. Having our finances under control has economic benefits, but it also brings a lot of peace to our daily lives.
There will always be differences of opinion with our partner, and some months there may be more expenses than normal and we may have to think harder about how to resolve it, but this doesn’t have to be our natural state. Many times we don’t realize the progress we’re making and these situations are a way to evaluate how we’re doing. We all have the possibility of living a life free of financial shocks, we just have to make the goal of achieving it.
