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How can you know you’re living a life of financial stability? How can you tell if you’ve got work to do in creating financial stability?

People have differing opinions on what financial stability is. However, you can watch for signs that can indicate you’ve hit the mark. The 20 signs we’ve outlined below can help you determine the answer to that question.

By themselves, the 20 signs won’t guarantee financial stability. To be sure, it’s easy to put your head in the sand at times. However, if you can say “yes” to most of the statements below, it’s a good sign. It’s an indicator that you’ve created a stable money situation.

Financial stability can be a hallmark of a peaceful life. Has your money situation ever kept you awake at night with worry? Have you been stressed as you pay the bills, wondering if you’ll have the cash to do so?

You can make some changes and get to a place of financial stability. As a result, it will help ensure you won’t have those worries any longer. Take the test below and see how you rank.

You Are You’re Financially Stable If

Many signs can give you an indicator of your financial situation. Note that answering “yes” isn’t proof positive that you’re money smart. Some people can live in denial for years and be fine with it. But if you’re honest, you’ll benefit yourself. You’ll know whether you’ve achieved true financial stability. Or are at least on the way to achieving it.

1. You’re at Peace With Your Financial Situation

Have you created a financial picture that ensures money worries don’t exist? If so, this could be a sign that you’ve achieved financial stability. Note that we’re talking non-worry based on fact as opposed to denial.

We’re talking true “I’ve got things covered” confidence in your finances. You’re certain that you’re in a good financial place. And that confidence helps you sleep at night.

2. You Don’t Fight Over Money With Your Spouse

Do you and your spouse get in money fights on a regular basis? This could be an indicator that some financial worries exist. Or it could indicate that one spouse places too high a value on money.

Conversely, are you and your partner both comfortable with your finances? Have you created your money goals and the plan to achieve those goals? If so, it’s possible that financial stability has arrived. If you’re unsure if your partner is happy with your money situation, ask.

Some people won’t say they’re unhappy until they’re at the boiling point.

3. You Don’t Use Your Credit Cards (Or You Pay Them in Full Each Month)

Choosing to use credit cards and pay them off each month to earn rewards is fine. Having to use your credit cards every month due to a budget shortfall isn’t.

If credit cards aren’t a necessity in your life, that’s a sign you’re doing great. However, if you depend on them for survival, your money plan needs help. Or you need to create a money plan. Having unpaid card balances each month is a roadblock to stable finances.

4. You’ve Got a Plush Emergency Fund Balance

People have differing opinions on what an ample emergency fund is. A full emergency fund typically covers 3-12 months worth of expenses.

Do you have an ample emergency fund balance? That’s a great sign that your money is in order. A healthy emergency fund balance shows maturity. It means you’ve taken the time to make savings a priority over spending.

If your emergency fund is sparse, make a plan for increasing your savings rate. And work to earn the best interest rate on that savings account. Read our Aspiration Bank review to see how you can earn higher interest on savings.

5. A Job Loss Wouldn’t Mean You Couldn’t Pay Your Bills

Would a job loss put your family in dire straits? Or would it mean implementing a slight course correction? Would you simply modify spending until you get a new job?

If the thought of losing your job requires a quick transfer from savings, you’re doing great. However, if a job loss means financial doom your budget needs a remodel. Start by creating an emergency fund. Sell stuff or start an automatic savings plan. Those actions will help you increase savings.

6. Financial Emergencies Don’t Invoke Panic

When our money situation was a mess, emergencies were a big deal. A broken water heater or large car repair would have us panicking BIG time. We’d scramble to see if we had enough on the credit cards to make the purchase.

Also, we’d wonder if we could handle the bigger payment the purchase would produce. Today, financial emergencies are no longer a full-scale disaster. This is because we’ve drastically reduced our debt and increased our savings. If you can say the same, financial stability is within view. It may have even hit shore.

7. You’re Okay With Spending Money on Special Occasions

If you’re celebrating special occasions at home because you want to, great! But if the thought of spending extra money one monthproduces fear, look out. Your financial situation might warrant a closer look.

Money is a tool that is meant to make our lives better. Are you afraid to spend on a special occasion because of money issues? Or is it because money has become too important in your life? Either way, your financial house might need some tweaks.

8. The Thought of Being Generous Sounds Exciting

One benefit of financial stability is that you can help others. You know you’re financially sound if you have money to give to a worthy cause.

Those with financial stability cherish the chance to help others. The fear of being obligated to help others doesn’t exist. Again, having the right attitude regarding money is a factor.

Conversely, have you adapted a hoarding mentality regarding money? If so, it may be time to re-assess your priorities. Generosity has a way of coming back to you. Giving breeds peace, contentment and wisdom.

9. You’re Happy With Your Financial Situation

Does the thought of your financial situation bring you joy? If so, you may have created a stable financial situation. Unstable finances breed fear. Those who have stable finances report that money doesn’t upset them. They report that minimal debt and an emergency fund help them feel at peace.

Work to get your money in a place that breeds peace. Pay off debt, build savings and minimize financial waste.

10. Saving Money Has Become a Habit

Has saving money become automatic for you? Are you on “set it and forget it” with your savings plan? If so, you’re heading toward the land of financial stability.

A habit of saving money means that you’re working on your financial goals. It may mean you’ve conquered a habit of making too many wasteful purchases. A plush savings account means no more money struggles. Start on your savings habit today if you haven’t already.

11. Others’ Opinions of You Don’t Concern You

This is one of my favorite parts of financial soundness. My family and I moved from the city to the country in 2012. And we began a plan for financial stability. Along with that plan came the abandonment of what others thought of us.

Have you stopped caring about competing with others for possessions? If so, you may have reached a place of comfort with your finances. Or at least with your financial plan. You’ve found security in being money smart. You no longer care to keep up with the Jones’.

12. Paying the Bills Doesn’t Require an In-Depth Plan

When we were struggling with money, it required a detailed plan to get the bills paid. Creative financing was a must every month.

Today we pay the bills as they come in and don’t give it a second thought. If your finances are in a good place, paying the bills isn’t a problem. It’s just another everyday task you complete.

13. You’re Contributing to Retirement and/or Kids’ College Expenses

Are you on track for a plush retirement savings account? Have you implemented a plan to help your kids with college expenses? Are retirement or kids’ college plans growing? If so, you’re learning the importance of practicing financial soundness. Welcome to financial stability.

14. Your Debt-to-Income Ratio (DTI) is Below 30%

The lower your DTI, the better your financial situation is. Eliminate debt payments if possible. Work to ensure your DTI isn’t higher than what you’re comfortable with.

This could mean paying off debts. It could also mean reducing other regular expenses. Try using a Challenge Everything Budget. It will give you additional money each month for reaching financial goals.

15. You’re Thoughtful About Purchases

Notice I said “thoughtful” and not “paranoid.” Most money-wise people don’t regularly spend on whims. Instead, they’re thoughtful regarding purchases. They work to determine whether the purchase will add value to their life. This is Value Based Spending.

16. Avoiding and Paying Off Debt is a Priority For You

The smart budget makes getting out of debt a top priority. Of course, there are exceptions to this rule. You might be carrying some “good” debt such as student loans. But debt freedom equals financial stability. Financial stability and large amounts of debt don’t go hand-in-hand.

17. You Budget or You’re So Good at Spending Smart That You Don’t Need to Budget

Most money-wise people have a clear handle on their spending priorities. Those priorities exist in their budgets. Or they’ve memorized those priorities so that they don’t need to budget. (See our recommended budget percentages).

Another option is to use a tool like Personal Capital. They have free tools to help you keep a handle on your spending.

18. You Have a Plan for the Unexpected

A person with stable finances has some type of plan for the unexpected. That might mean a plush emergency fund or life insurance policy. Disability insurance and other backup tools are important too.

Unexpected events such as job layoffs and injuries do happen. Make sure you’re practicing financial stability by having a plan in place. You’ll want to be able to cover those unexpected events.

19. You Buy Appreciating as Opposed to Depreciating Assets

Assets such as cars that decrease in value aren’t important to the wealthy. Instead, they focus their money toward index funds. Also, they buy other wealth-building “purchases” such as real estate investments.

Real estate investing is available to everyone these days. This is true even if you don’t have a lot of cash. Companies like Fundrise help you invest in real estate for as little as $500.

20. Large Purchases Don’t Create a Damaging Ding in Your Finances

Financial soundness means that large purchases such as home repairs don’t worry you. They won’t put a serious dent in your money situation. In other words, they aren’t a big deal. They’re a non-issue to deal with, and you don’t lose sleep over them.

All right – you’ve answered all 20 questions. How did you score? Check out the scoring chart below.

Quiz Score

16 – 20: You’re kicking it! You’ve taken up residence in the land of financial stability.

You’re kicking it! You’ve taken up residence in the land of financial stability. 11 – 15: You’re doing great! You’ve conquered most of the obstacles that prevent people from building wealth.

You’re doing great! You’ve conquered most of the obstacles that prevent people from building wealth. 6 – 10: You’re off to a good start! You’ve implemented some of the factors that lead to financial stability. However, there are ways you can increase financial stability,

You’re off to a good start! You’ve implemented some of the factors that lead to financial stability. However, there are ways you can increase financial stability, 0 – 5: You’ve got room to grow. Use the tips on this list. They will help create financial security for yourself and your family. Watch as your peace grows along with your stabler money situation.

Financial stability depends on many things. However, it largely rests in having a firm grasp of money management. Also, you need to ensure your money is working for you. This is key to helping get the maximum benefit from your money.

What signs do you think help determine whether a person has stable finances? How can you improve your financial situation? Are there signs on this list that you feel you need to work on? Share your thoughts by leaving a comment in the comments section.