14 Signs That You Are Better Off Than The Average American

Rebecca Holcomb

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If you're an American with an emergency fund, you can count yourself among the majority. However, that doesn't mean that the US economy is booming. In 2021, inflation started to eat away at most paychecks as everything became more expensive. 

Speaking financially, most Americans want to do well, but gauging that criteria can be difficult. If you've wondered how your status stacks up against the average American, we're here to help you. We've curated several common signs that you're doing just fine.

1. Your Emergency Fund is Good

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Statistically, nearly four out of every ten Americans lack the funds to cover a $400 emergency. If you've worked to save until you can cover three to six months' worth of bills, you're doing better than nearly 40% of Americans. 

It doesn't mean you have everything under control, but at least you're moving in the right direction. Keep building that emergency fund by paying yourself first and paying any outstanding debt. 

2. You've Gained the American Dream

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In a time when most people can't even articulate the American dream, home ownership puts you in a rare category of Americans. It's the quintessential marker of success. Only 36% of Americans believe their family has achieved the financial success contained in the American Dream, while 46% believe they're on the way to attaining it. 

However, in 2015, the Economic Policy Institute said that the bottom 99 percent of workers earned an average of just $50,107 per family, while the top 1 percent earned at least $421,996 before taxes. This gap shows the disparity caused when CEOs (Chief Executive Officers) make 271 times the average worker's. 

3. Money Management Options

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Some people are great at managing their money. Others, like me, need help, and hiring a financial planner can offer that help. Unfortunately, this untapped resource often goes unnoticed, with only 38% of Americans taking advantage of the help a financial planner can offer. 

If you're looking to boost your savings, invest in new markets or tools, or need a little financial support, finding a great certified financial planner.

4. Travelocity Doesn't Have a Thing on You

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Whether you prefer staycations close to home or the excitement of world travel, being able to afford any vacation assures you are doing well financially. Affordability is one milestone of the current vacation market, and Americans are taking advantage of it. 

NerdWallet reports that nearly half (45%) of Americans have vacation plans that involve airfare or a hotel stay in 2024, and 91% are taking steps to save on their expenses, especially transportation—still, at least 20% plan to go into debt to fund their vacations this year. 

5. Credit Extended

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Your credit score is one easy identifier that you're doing well with your money. Paying down your debt and paying your credit card balance on time can exponentially boost your credit score, making qualifying for a mortgage or new auto loan much easier. If you run a business, it can also affect your ability to pay your employees. 

Keeping your credit score in solid standing is just one more sign that you're better off than the average American. 

6. You've Insured Your Health

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Some countries strongly believe that health insurance is a universal right, so they've adopted a nationwide or “universal” healthcare system. In these countries, everyone has access to healthcare; however, the execution of these systems varies on the quality and quantity of healthcare providers, hospitals, etc. 

Whether or not you believe that healthcare should be universal, being able to afford the monthly costs in the US is not a given and is a stable marker of your financial status. 

7. Diversity is Friendly to Your Investments

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Having an investment portfolio is a sign that you're on the right track financially. A solid portfolio with a diversified set of investment tools means that you are actively investing, adding stock to your nest egg, and well on your way to attaining financial freedom. 

This instance is also where a certified financial planner can make a huge difference in how well your money performs to help you grow your net worth. 

8. Charity is Your Middle Name

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In general, people enjoy donating to charity. Often, one or more charities will grip your heart and become the beneficiary of your gift-giving. You can even include those charities in your living will. 

However, being able to give to a charity is a great place to be, financially speaking. The number of households donating to charities saw a decline in 2021, sliding to 49.6%. While most families try to donate at least once a year to a charity they support, regular giving is struggling. If you can regularly donate to a charity you love, consider yourself financially secure. 

9. Your Vehicles are Free and Clear

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Most adults know that the minute you drive a car off the lot, it depreciates. Auto debt accounts for $100 million American loans. Paying cash for your dream car is certainly not feasible for the majority of Americans, but it can be seen as a step up financially if you can. 

Ownership of your vehicles is the only way to make the purchase worth it. Otherwise, you'll spend years giving the dealership what is essentially free money. You pay interest on the loan, and they sit back and collect. It's an all too common occurrence and one that should be avoided at all costs. 

10. Debt Free Living 

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In America, we've gotten so used to living in debt that we grow up not knowing what it's like to live debt-free. It is considerably liberating for those who've dug themselves out of the abyss. Teaching others to live debt-free can often be exhilarating. So, if you can pay off those student loans, pay off your credit card statements, and live your best life without taking on new debt, consider yourself in the rare minority. 

As of 2023, 77% of Americans carry some form of debt, and the personal debt of everyone in the nation stands at an incredible $17.5 trillion with a T. 

11. Your Money Works for You

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Making your money work for you is one beautiful step in gaining the financial future you want for yourself and your family. If you're already investing your hard-earned income, congratulations. Sixty-one percent of Americans own stocks in the DOW, the S&P 500, the NASDAQ, or some other stock exchange. The top 1% own 49% of stocks, while the bottom 50% of earners own only 1%. 

A relatively wealthy person can essentially live off the dividends and interest earned when their money is invested wisely. So, if you're looking at a well-diversified stock portfolio that's earning you money while you sleep, you're doing better than the average American. 

12. Your Estate Plan is Solid

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In 2023, estate planning saw its first dip in asset allocation, with a 14% increase in those who claimed a “lack of assets” as a reason for not creating an estate plan. However, having a last will is more than allocating assets. 

It offers your loved one peace of mind and lets them know your last wishes. You can also detail how you'd like to be taken care of when it comes to your burial or cremation and other essential details that you wouldn't want to burden your loved ones with. A solid estate plan puts you in the severe minority of 32% of the adult American population. 

13. You Never Take a PayDay Loan

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Going back to taking on debt, Americans who are doing well financially never take a PayDay Loan on their paycheck. The Federal Reserve estimates that 11 million Americans use payday loans to make ends meet, expending more than $500 in fees annually. 

These legal loan sharks prey on desperate Americans who aren't earning enough to cover their expenses. Getting your finances in order so that you never have to use these sorts of loans is essential to keeping yourself above the average American when it comes to money. 

14. Your Money Makes Money

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Along with investing in the stock market, creating multiple passive income streams can help propel you past what the average American is making. The beauty of passive income is that it occurs without interacting with you. Setting up passive income streams is the easiest way to make money without lifting a finger. 

Whether you publish books on Amazon's Kindle Direct Publishing (KDP) or have rental properties that you pay a manager to oversee, creating a way for your money to make money is essential to becoming financially independent and will undoubtedly put you in a category above the average American. 

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