Many Americans live paycheck to paycheck, and credit card debt hit a record $1.21 trillion as of the fourth quarter of 2024. While money might not buy happiness, it sure does buy peace of mind. If you’re hitting certain financial milestones, you might be doing better than you think — especially compared to the average American.
Here are some signs your wallet is in better shape than most.
You Have More Than $8,000 in Savings
According to the Federal Reserve’s 2022 Survey of Consumer Finances, the median savings account balance for U.S. households was $8,000. You’re ahead of the curve if you’ve got more stashed away.
You Can Cover a $1,000 Emergency Without Sweat
Cars break down. Life throws curveballs with price tags attached. The real question is: How ready are you for a financial surprise? If a sudden expense doesn’t send you into a full-blown panic, you’re in good shape. A recent Bankrate survey found that only 41% of Americans could cover a $1,000 emergency expense using their savings.
Your Credit Card Debt Is Less than $6,000
If you’re keeping your balances low, paying off your card in full each month, or — better yet but unlikely — not carrying any credit card debt at all, you’re ahead of the game. Many Americans aren’t so lucky. According to TransUnion’s latest data, the average credit card balance per consumer hit $6,580 in Q4 2024.
You’re Investing for Retirement
Future-you is in a better spot than most if you’re regularly contributing to a retirement account, According to the Transamerica Institute’s 2024 report, the estimated median retirement savings is just $64,000, yet Americans believe they need $1.46 million to retire comfortably.
You’re Not Living Paycheck to Paycheck
According to LendingClub’s 2023 report, nearly 60% of U.S. credit cardholders are living paycheck to paycheck. That includes a surprising number of high earners — about 45% of those making over $100,000 per year still struggle to cover their expenses between paydays.
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Your Debt-to-Income Ratio Is Under 36%
Lenders use this metric to measure financial health, and a ratio under 36% is considered good. This means your total monthly debt payments (credit cards, loans, etc.) are less than 36% of your gross monthly income. If you’re within this range, you’re in good standing.
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