The Signs That You Are Financially Above Average and Practical Tips to Achieve Them

[Music] when it comes to managing money some people really stand out these signs show that you're not just staying afloat you're making big progress in the world of personal finance Financial Health means how will you manage your money it includes things like saving money planning for investment and handling your expenses when your financial health is good you can handle Financial challenges confidently it's like having a strong base for your money life let's explore these seven key indicators that suggest you are doing well financially one emergency fund an emergency fund is money you keep just for unexpected costs like if something breaks or you have an emergency so you won't need to borrow money it's not the same as the money you save on purpose for things like trips or new gadgets according to bankrate.com in 2023 approximately 22% of Americans have no savings whatsoever so having an emergency fund sets you apart having this fund means you're ready for surprises and won't be in trouble if you have to pay for something you didn't plan for two low debt to income ratio it means you don't owe a lot of money compared to how much you earn it's a good sign because you're not spending too much of your income on debts which is smart for your Financial Health to figure it out you divide the amount you pay for debts every month by your monthly income before taxes if this number is less than 36% that's great lenders generally consider a debt to income ratio under 36% as ideal with 43% being the upper limit for mortgage qualification and recommend that only 28% to 35% of that ratio should be dedicated to mortgage payments three regular Investments it means putting money into things like gold company shares or stocks bonds or re retirement savings accounts on a consistent basis like every month when you do this you get the benefit of compound interest this is when the interest you earn on your Investments also starts earning interest kind of like a snowball getting bigger as it rolls down a hill over time consistent savings can accumulate substantially which is essential for achieving wealth so by investing regularly you're not just saving money but making it grow faster four mult multiple streams of income it means you earn money from different places not just from your regular job for example you might rent out a house and get money every month from rental properties start a small online shop do some extra work like writing or designing in your free time or own parts of a company that pay you a share of their profits or dividends this is good because if one source of income stops you have others to help you keep earning money which can make your financial situation more secure and stable it's it's like not putting all your eggs in one basket five budget discipline after you pay your taxes it's about making sure you spend your money on what you need and saving some too it's like planning how to use your money in the best way so you don't waste any and can take care of yourself now and in the future being disciplined with your budget helps you live without money worries save more and have a good credit score by paying bills on time and not having too much debt additionally It prepares you for unexpected expenses and builds a solid Financial Foundation allowing you to confidently pursue your dreams and overcome challenges six above average credit score a credit score acts as a financial reputation indicator that Banks and lenders evaluate to determine your reliability as a borrower the average Benchmark is 717 and scores Above This are deemed above average reflecting a higher level of trust an above average average credit score benefits You by securing loans with lower interest rates meaning you pay less money over time it also qualifies you for larger loans facilitating significant life events such as buying a house or launching a business having a good credit score is like having a special ticket that lets you get better deals and save more money over time seven freedom from highin debt it means you don't owe money on things like credit cards or loans that charge you a lot of interest this kind of debt can be expensive because the longer you take to pay it off the more extra money you have to pay when you don't have this kind of debt you can use the money you would have paid in interest for other things in simple terms if you don't have debts with high interest you can use your money better to save more or earn more from Investments getting your financial stability is like getting ready for a big race you need to plan ahead stick to your plan and keep going learning about money and growing as a person isn't just about hitting goals it's about making good habits that last now let's explore how you can reach all these signs of being financially stable emergency fund one set a savings goal saving enough money to cover your basic costs for 3 to 6 months two automate your savings arrange for automatic transfers from your check account to your emergency fund three review and adjust regularly monitor your savings and costs make sure you have enough money for emergencies low debt to income ratio one increase your income increasing your income with a raise or extra jobs can make your debt smaller compared to your income two pay off debt to lower your debt focus on strategies like tackling smaller debts or those with higher interest first three avoid taking on new debt keep your credit card debt low and only borrow money when you really need to regular Investments one set clear investment goals setting clear savings goals can help you invest wisely and stay focused two start early and invest regularly begin investing soon and keep adding money often to let it increase over time three diversify your Investments spread your money across different things like stocks loans and property to reduce risk multiple streams of income one invest in the stock market put some money into stocks or funds to get a regular income from them over time two real estate Investments renting out Properties or investing in real estate funds can earn you regular monthly income three start a side business use your skills or Hobbies into a small side job to earn extra cash along with your regular work budget discipline one track your spending track your spending to find ways to save money and stick to your budget two set specific financial goals set clear goals to help you save money and keep your spinning on track three review and adjust budget regularly check and update your budget regularly to keep up with changes in your finances above average credit score one pay bills on time pay your bills on time to keep a good credit score two keep credit utilization low keep your credit card use under 30% of the limit to show lenders you are not risky three maintain long-term account keep old credit accounts open to help your credit score freedom from highin debt one prioritize highin debts pay off the debts with the highest interest rates first to save money on interest two consolidate debts put your highin debts into one loan with a lower rate to make payment simpler and save on interest three negotiate lower interest rates talk to your lenders and ask if they can reduce the interest rates so you can clear your debt faster in conclusion achieving Financial stability is a marathon not a Sprint it requires discipline patience and a commitment to cultivating good financial habits remember the journey to financial stability is your own journey and each small step you take moves you nearer to your financial goals thank you for watching I hope you found this video helpful and informative see you in the next video [Music]

Channel: Wealth of Happiness

Views: 27,030

Keywords: managing money, financial health, saving money, investment planning, expense handling, emergency fund, debt to income ratio, regular investments, multiple income streams, budget discipline, above-average credit score, high-interest debt, financial stability, signs of financial progress, key indicators of financial health, diversifying your investments, financial habits for stability

Id: pv_tQHLZC_A

Length: 9min 6sec (546 seconds)

Published: Sat May 04 2024