Sometimes I feel like I am not good with money. For maybe a few seconds at a time then I look at how my life is going and I realize “you know, I am actually good with money.” Unfortunately, most people feel like they are bad with money. During November 2019 71% of Americans felt like they a not financially well. And that was before the Coronavirus Crisis. So I would believe that more people are feeling financial strain, probably even you.
That may be very true. But there is even more truth you must realize, I think most people, maybe even yourself, look at only relative aspects of financials. However, wealth is not perfectly visible. A person driving a used Honda could easily have a larger net worth than a person driving a Mercedes. In this post I will explain some baseline qualities that show that at the very least you should not be too hard on yourself about money.
You Can Pay At Least Most Of Your Bills With One Paycheck
Whether you are paid weekly or semi-weekly having a lifestyle that can be paid by one check is a fairly good indicator that you are good with money. Residency is one of if not the number one cost people pay. If residency costs less than 50% of your monthly income chances you can pay most of your bills with a single semi-weekly paycheck.
If your lifestyle can be paid with around 50% of your take home income you are doing incredibly well. Keep in mind, at least before the Coronavirus Crisis, US citizens spent $1.33 for every dollar they make. If you spend even a little less than you make, you are doing a good job.
You Do Not Stress Over Miscellaneous Large Payments
Chances are you have several payments at most twice a year that cost close to or more than a hundred dollar. For me this includes car registration, car inspection, and computer virus protection. These cost a little more than a hundred each time. Do you have any idea of how paralyzing it would be if I stressed to save for these? I would hardly be able to work.
Unfortunately, I know many people who skip out on these, all just to save a few hundred dollars. These are among the worst items you can skip on. If you are pulled over the ticket is all but guaranteed to cost more than a registration. Unfortunately, many people drive with an expired tag, in fact, California reported as many as 23% of drivers pay for registration late. And are you willing to risk cyber attacks on your computer? If you are good with money, you would not take such unnecessary risks.
And all for what, a few hundred dollars? Let’s be honest, if you are willing to go to those levels to save a few hundred dollars a year, that must mean those few hundred dollars are a lot to you, like you are only able to invest or save a few hundred each year if anything at all.
If you do not stress over those expenses, that means you are doing good with money so a few hundred does not mean that much to you.
You Chose Quality Health Insurance Despite The Additional Cost
My employer provides many options for health insurance. These range from low deduction to high deduction health plans. While high deduction health plans are certainly better than no health plan, but do you really want a health plan that would require you to pay over a thousand before insurance kicks in?
I chose the lowest deductible plan. Not because I believe either my wife or I have health issues, but just in case. Furthermore, if I was to choose the next best health plan with twice the deductible I would have saved….
Less than $400 each year. Recall what I said about taking unnecessary risks to save a few hundred? Hopefully, you do not need to use insurance frequently, maybe even just for check ups. However, you cannot time when an injury will occur or other things in life like a pregnancy. Health insurance helps for random situations in life.
You Are Reading This Post
Or frankly any other post in Forge Your Wealth or any financial blog. If you are reading these posts you are open to the idea to learn how to spend your money and how to make more money.
You Know Your Credit Score (Or At Least From A Few Months Ago)
Checking your credit score does not lower it. Truth is the only reason you would not know your credit score is if you are scared of what it could be. Even if your credit score is far from stellar, a lower credit score should be the driver of a goal.
You do not need to check it all the time, that will just be a nuisance. As long as you have an idea of where it is at you are fine. When you actually need credit, you should not be surprised by your credit score too much.
You Know How Much Is In Your Bank Account
Checking your bank account at least every 2 days ensures no one is taking your money. So why do about a third of Americans look at their accounts less than once a month?
The most likely answer is they either feel like their money is 100% safe, or they know exactly where their money is going, and not in their bank accounts. Many people avoid looking at their bank accounts like avoiding the source of their anxiety makes it disappear. If you have money problems, looking at your bank account is the first step to fix your money problems. If you look at your bank account regularly you at at least trying to fix your money problems.
Truth is, one of the best ways to tell if you are good with money is to determine how often you think of money. If you do not think of money often you are at lest fairly good with money.
Not many people think about money frequently if they are good with it. However, if you are nervous about money, know you are not alone, especially during recent days. The best thing you can do is look at where you are. Even a small improvement adds up. Improving by 1% each day means you improve 38 fold by the end of the year. One piece of advice I used to give my students is that you are not living life if you cannot evaluate your past self yesterday without thinking that person was stupid. You NEED to learn something everyday.