According to a recent survey from Empower of 2,000 Americans, 44% of respondents considered financial freedom as a sign that someone has “made it” financially. While 67% of Americans value financial independence, 24% say that they haven’t achieved it yet and 72% admit to stressing about money at least once per month.
We will discuss the key signs that you’ve “made it” financially by sharing insights from the survey and feedback from financial experts.
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1. You’re Financial Independent and Don’t Rely on Anyone Else for Money
With 44% of Americans stating that becoming financially independent was a sign of financial success, here’s how the metric of financial freedom was broken down:
- 47% felt that not needing money from family and friends indicated financial freedom;
- 44% accredited financial independence to reaching a certain net worth;
- 42% referred to contributing to a 401(k) retirement plan as a type of financial independence.
Nearly 60% admitted to relying on family and friends for financial support, such as help paying the rent, covering streaming services or assisting with their phone bill. This means many Americans would feel like they’ve made it financially if they could afford to cover their bills without relying on their support system.
“The true sign of someone making it financially is not experiencing financial stress,” said Erika Kullberg, an attorney, personal finance expert and founder of Erika.com. “Being able to manage that income so you can live comfortably without having to stress about debt payments, late bills or not meeting your savings goal is a huge accomplishment and one people should be very proud of.”
With a considerable number of Americans feeling that being financially independent is a sign of success, it’s essential that we examine how we got to this point.
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Building Financial Independence
“Being on track with your retirement planning is a strong sign that you’ve made it,” said Todd Stearn, a financial expert and founder of The Money Manual. “If you’re falling short of ‘making it,’ budgeting could change your financial picture drastically. Budgeting apps like Rocket Money, YNAB and Simplifi can make it easy to set and stick to a budget, see all areas where you could cut spending and set and track progress toward your financial goals.”
Since contributing to a retirement plan is listed as a sign of financial success, this would indicate that setting up consistent contributions could build up your confidence. You can start by enrolling in the plan offered by your employer or setting up your own account so that you can start to work towards financial freedom.
2. Having a Job You Love
The survey found that 39% considered moving up in a job as a sign of financial success, while 37% felt that having a job they loved was important. This indicates that choosing the right career path and staying on track is critical to being financially successful. If you currently enjoy your job or feel like you’re on the right career trajectory, you may be a financial success without even realizing it.
3. Making a Certain Amount of Money
When it comes to financial success, 25% of respondents felt that this was a sign of achievement. According to the survey, the average American believes that financial independence involves earning $94,000 or more, and 60% feel optimistic about their ability to reach this income level.
It’s also worth pointing out that 22% of the respondents felt that being able to spend money without worrying was a sign of someone making it in life. This ties in with the point of making a certain amount of money because once your income increases, you no longer have to feel limited.
Here are the key indicators that you’re earning enough to feel like you’re successful.
You Have Financial Confidence
“You’re no longer glued to your bank account balance, paying bills is stress-free and you don’t hesitate to pick up the tab when you’re out with friends,” Kelly Ann Winget, founder and CEO of Alternative Wealth Partners.
When you’re confident about your finances, it means that you’re making enough money to handle your expenses without stressing about paying your bills.
You’re Not Just Focused on Saving
“You move from hoarding money for the future to striking a balance between maintaining your finances and giving back,” remarked Winget.
As your income increases, you don’t focus on saving as much and you start to think about investing back in yourself and your community.
Achieving Financial Success
We also received additional insights from financial experts on the idea of achieving financial success and feeling like you’ve made it.
It’s Not Always About Numbers
“It’s not something you can define with a specific number, as financial success varies from person to person,” said Hazel Secco, a CFP and CEO of Align Financial Solutions. “Whether it’s achieving financial independence or accumulating a certain amount of wealth, it ultimately depends on your own level of satisfaction.”
The survey showed that many people considered a certain net worth a sign of making it, while others were just looking to cut off support from family and friends. This is why it’s critical that you find your criteria to follow so that you don’t measure yourself against unrealistic standards.
Secco added, “The challenge with this subjective measure is that our beliefs and feelings about success are often influenced by the media, friends or family, rather than being true to what we actually need or want. That’s why it’s crucial to identify your own values and goals when defining your financial future.”
Planning for the Future Alleviates Financial Stress
“One way to tell if someone has financially ‘made it’ is if they have prioritized saving for retirement and are maxing out all of their retirement investments,” said Paul Gabrail, the founder and host of Everything Money. “Having the peace of mind to know your future is secure, and you can retire when it’s time (if not earlier) is definitely financial success, in my opinion.”
If you’re worried about achieving financial success, the best step you can take today is to start planning for your future. By investing in your retirement, you ensure that you’ll have a nest egg that can help you live your desired lifestyle one day.
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This article originally appeared on GOBankingRates.com: 3 Key Signs That You’ve ‘Made It’ Financially
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