6 Signs Your Financial Well-Being Is the 'Best It Has Ever Been'

Click here to view the published press.

Last year was a tumultuous time for the economy and for Americans navigating their finances amid the chaos. The inflation rate was 3.4% for the 12 months ending December 2023 — down from 2022's rate of 8%, but still higher than the Federal Reserve's target of 2%.

Interest rates also surged as the Fed raised its target rate four times, from a range of 4.50%-4.75% to 5.25%-5.50%. On the other hand, 2023 turned out to be a great year for the stock market, with the S&P 500 index closing out the year with a 24.2% gain.

With this in mind, a recent GOBankingRates survey sought to find out how American adults were feeling about their finances at the end of 2023. The results paint a diverse picture of financial well-being in 2023, influenced by age, personal circumstances and broader economic factors.

Interestingly, about one in 10 respondents said they were at their financial peak, claiming their financial well-being in 2023 was "the best it has ever been." On the other end of the spectrum, there were also those who struggled yet managed, making up approximately 28% of respondents, while another one in 10 found themselves in the most challenging position, labeling their situation as "the worst it has ever been."

Survey responses: How would you rate your financial well-being/situation at the end of 2023?

• The best it has ever been: 12%
• Good, but with work to do: 32%
• Neither good nor bad: 19%
• Struggling, but still getting by: 28%
• The worst it has ever been: 9%

Diving deeper into the demographics, the survey presented different pictures across age groups. For instance, respondents ages 18 to 24 had a more optimistic view, with a higher percentage (20%) claiming the best financial state compared to older age groups — not too surprising considering young adults tend to have fewer financial responsibilities in general.

On the other hand, only 5% of those 45 to 54 and 6% of those 35 to 44 and 55 to 64 also stated their financial well-being was the best it has ever been. It could be that middle-aged respondents are struggling to manage the expenses associated with children, homes and lifestyle creep amid rising interest rates and inflation.

But what does it really mean if your finances are "the best they've ever been"? And is that a realistic state to attain? Eric Croak, a CFP and president of wealth management firm Croak Capital, shared six signs that your financial well-being is the best it has ever been.

You're Free From Job-Related Worries

"One of the strongest signs of financial stability is the absence of anxiety about losing your job," Croak said.

Many people live paycheck to paycheck, he explained, which would mean losing a job, even for just a month or two, could deliver a huge financial blow. However, if your finances are in great shape, losing your job wouldn't throw your finances into chaos.

Experts recommend you have three to six months of savings for emergencies such as job loss.

People Seek Your Financial Opinion

Another sign that you're doing well financially is when people start asking you for financial advice. That doesn't necessarily mean you're qualified to provide that advice, but it does show that others see you as someone who has their money matters sorted.

"Consider this a big compliment," Croak said. "It means your financial stability is noticeable and others want to know how to achieve it, too."

Your Credit Score Exceeds 700

Credit scores don't always correlate with financial stability or well-being. However, your score does significantly impact your eligibility for affordable loans, credit cards, utility accounts and even certain jobs. A high score shows that you've been able to manage your debts responsibly in the past.

"While it's not everything, of course, a credit score of 700 or higher reflects your strong financial position," Croak said.

You Have Adequate Insurance Coverage

Life insurance provides a safety net for life's catastrophes.

"It helps you live with less worry, particularly when facing big financial responsibilities like medical bills, a mortgage and other debts," Croak explained.

However, he added, a lot of households don't have life insurance, mainly because they can't afford it.

"So," Croak said, "if you have life insurance, it's a good sign of financial health."

You Use Credit Cards for Convenience

"A lot of people who aren't financially stable use credit cards as a way to stretch their income to afford things they really can't afford," Croak said.

Of course, if you're financially stable, that's not a problem for you. Still, it can be beneficial to use credit cards, whether you're racking up travel miles or making quick online payments. In other words, credit cards are a convenience, not a necessity to you.

You're Confident About Your Future

Finally, the way you're generally feeling about the state of your finances and progress toward major goals is a great indicator of how you're doing. If you feel confident about your future and retirement, Croak said that's a strong indicator of financial stability.

"You're living within your means, building up substantial financial assets, and you have little to no non-mortgage debt," he said. "This confidence often leads to a brighter future."