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Assess your financial situation and learn what you can do to improve it
Financial fitness is an essential aspect of our overall well-being. It involves taking control of our finances, creating and sticking to a budget, saving for the future, managing debt, and making smart investment decisions.
But how does your financial fitness compare to the average American’s? For a better understanding of how you compare to your peers and how to improve your financial fitness, consider these factors.
1. Savings
Saving is a critical component of financial fitness. It helps you prepare for unexpected expenses, achieve your financial goals, and build wealth over time.
The median amount of money in savings accounts is $5,300, but this number varies widely based on income, age, and other factors. If you have more than $5,300 in your savings account, you’re on par with the average American. Whether you have more or less saved, it’s important to have a savings plan in place and consistently contribute to it.
It’s also a good idea to have some sort of emergency fund in case of job loss or health emergency. A golden rule is to have 3-4 months of income available in your emergency fund.
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2. Budgeting
Budgeting is an essential tool for maintaining financial fitness. It helps you track your spending, identify areas where you can cut back, and allocate your resources in a way that aligns with your priorities. While many Americans budget, most struggle to stick to it.
Starting to budget is a good way to get ahead of the curve and improve your financial fitness instantly. Check out our article on the top way to budget to learn more about how you can implement budgeting into your daily habits.
3. Credit Score
Your credit score is a key indicator of your financial fitness. It reflects your credit history and ability to manage debt, and it can have a significant impact on your financial life. The average American has a credit score of 700, but again, this number varies widely based on your credit history and other factors.
If you are looking to improve your credit, check out our credit card resources. As well as improving your credit, you can accrue rewards with certain credit cards.
4. Investments
Investing is an important part of building wealth and securing your financial future. The average American has approximately $70,000 invested, but this number also varies widely based on income, age, and other factors. Whether you’re a seasoned investor or just getting started, it’s important to understand the basics of investing and choose strategies that align with your goals and risk tolerance.
If you’re not sure how to get started, check out Stash. Stash is an investment platform with lots of resources for new investors.
Bottom Line
Financial fitness is a journey, not a destination. By understanding how your financial health compares to the average American, you can identify areas for improvement and take concrete steps to achieve your goals.
Whether you’re focused on saving more, managing debt, or growing your wealth, there are many strategies and tools available to help you along the way. Stay focused, stay committed, and stay on track to financial success!
