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When you see people on social media or in real life who live well and don’t struggle with money, you may feel discouraged about your finances. This comparison can make you think you’re worse off than you are and detract from your financial successes.
one in Youtube videoMoney expert Rachel Cruze discusses seven signs that indicate you’re actually doing better financially than the average American. Find out how many of these signs apply to you and get some tips to stay ahead.
1. You’re debt-free (or almost there)
according to Micro Economic Data CenterBy the first quarter of 2025, American households will have approximately $18.2 trillion in debt. While mortgage loans made up a large portion of that amount, student loans, credit cards and auto loans were the other top sources.
If you’re not the average American making debt payments, you can put the extra income toward other things like investments and avoid paying interest to creditors. Cruz said you’re also making good progress if you’re currently paying off debt using an approach like the debt snowball method.
2. You have money left over
2025 Northwestern Mutual Planning and Progress Study found that 25% of Americans cited not having savings as the top factor hindering their financial security. This common problem puts you at risk of financial insecurity if your income decreases or you have to incur a sudden expense.
Cruz discussed how not having debt makes it easier to save and recommended an emergency fund goal of three to six months of your typical monthly expenses. You’ll also be better off financially if you keep that money in a high-yield savings account and avoid touching it for non-emergencies.
3. You’ve planned for retirement
Recent Ramsey Solutions personal finance study status revealed that 33% of Americans will likely need to work after age 65 due to insufficient retirement savings. Additionally, credit card debt has made it difficult for many people to invest much or at all.
According to Cruz, if you’re able to regularly contribute to your retirement fund and prepare for your future, you’re doing better than average. In addition to your contributions, interest earned and any employer matching will add up over time.
“Once you’re debt-free and have your emergency fund, start investing 15% of your income into retirement,” Cruz suggests.
4. You are a homeowner
You don’t have to own a home for financial success, and Cruz said renting may make more sense when you’re not financially ready for a big commitment. But this milestone comes with many benefits like potential appreciation, tax benefits and stability. Plus, after paying off the mortgage you are finally free from housing payments.
If homeownership is in your goals, Cruz recommends getting a 15-year mortgage with a fixed rate and monthly payments of 25% or less of your after-tax income. He also suggested a mortgage payment calculator for current borrowers so they can become debt-free faster.
5. You can celebrate other people’s wins
Comparing yourself to financially more successful people can make you jealous of what they have and bitter about your financial situation. If this doesn’t sound like you because you are content with your situation and are happy to see others doing well, then you are in a better place than many people.
Cruz explained, “Even if you’re still living paycheck to paycheck, like getting to this place where you’re not indifferent about it, you still have goals, but it doesn’t affect who you are and what other people are doing.”
6. You earn average income
US Bureau of Labor Statistics The first quarter of 2025 recorded a median household income of $1,192 per week. Cruz said making an average amount of money is a good financial indicator because you can use that money to build wealth.
Controlling your expenses and not outgrowing your lifestyle as your earnings increase will help you maximize your income. You can also find additional income sources to speed up the process.
7. You practice generosity
If you are giving your money or time to help others instead of focusing on how much money you have or what you can do for yourself, you are doing well financially and personally. For example, you might be someone who volunteers at a local organization or regularly donates to a charity.
“There’s a point where you open your hand and you usually have the ability to serve others and give to them and that brings a much richer life than just living for yourself,” Cruz said.