Signs You Are Financially Stable

Before we learned how to manage money according to the Bible, we were financially unstable. We had a ton of debt, no budget, the credit cards were maxed out and we had no long or short-term savings.

Over the years, we have changed our money habits and helped a lot of people do the same thing. We have seen people move from financial chaos to financial stability.

Listed below are the signs of financial stability to help you discern where you are on the journey. None of these items stands alone but looked at as a whole, they indicate a healthy financial future.

1. You know that everything is a gift from God. This is not conventional financial wisdom and you would probably never hear this from a financial planner. But recognizing that everything comes from God—even your finances—gives you a sense of perspective that you just can’t get any other way. This knowledge calls you to be a responsible steward and puts money in a perspective that you just can’t get from any financial expert.

2. You and your spouse are on the same page financially. Finances can wreak serious havoc on a marriage. Financial stability, on the other hand, means you and your spouse working towards common goals. You are also totally open and honest about all your finances and this is important whether you are a newlywed or have been married for decades. There should not be any financial secrets in a healthy marriage

3. You are not worried about the future. Being financially stable means you have a good handle on your finances and you are comfortable knowing how much money is coming in and going out each month. You are not worried about those bills that are looming next week or how you are going to pay for retirement. A financially stable person pays their bills each month with no surprises and no worries

4. You can sleep at night. Not worrying about the future means you can sleep at night without the thought of how you are going to pay the bills. Peace is one of the biggest blessings of being financially stable. There is nothing worse than tossing and turning all night because financial worries are keeping you awake.

5. You can handle a $400 financial emergency. A majority of Americans can’t pay for an unexpected expense of $400 without using their credit card. If you are able to handle an emergency expense, it’s an indicator that your finances are in order. A financially stable person isn’t afraid or worried about missing a paycheck because they have funds in place to cover emergencies and temporary budget blips. If you can’t handle an emergency expense of $400, start now to build that emergency fund. Even if you are only able to save a little bit each paycheck, you will be in much better financial shape than you are now.

6. Your credit cards are a convenience not a necessity. Nothing can ruin your financial stability faster than using credit cards to pay for necessities because you can’t afford to pay cash. Nothing is wrong with using credit cards if you pay them in full every month. But if you are using credit cards to subsidize a lifestyle you can’t afford, you are headed for big problems. Think about it—using credit cards and not paying them off means you are paying even more than the cost of the item once the interest is calculated on your credit card balance.

7. You are saving for your future. It always seems like there is enough time to save for the future in the future. A financially stable person saves for the future NOW! People think that they have to have lots of money or reach a certain level of income in order to save and invest, but that’s a mistake. Being financially stable means you save and invest on a regular basis. Whether it’s a 401(k) plan or some other type of account, you’re actively saving every month. Think about savings as a gift you are giving to your future self.

8. You have a low debt to income ratio. Your debt-to-income ratio measures your monthly debt obligations against your income. Lower is better. You can get a mortgage with a debt-to-income ratio as high as 43% percent though that would be incredibly foolish as that would mean almost half of your income is assigned to debt payments. The lower your debt-to-income ratio is, the closer you are to being financially stable.

9. You are not underwater on your car loan or your mortgage. According to, more than 60 percent of car loans are over five years in length.  Additionally, the average car payment is over $500 per month! A financially stable person sees cars as a depreciating asset and avoids owing more than the car is worth. Same thing goes for your home. Owing more than your home is worth means you bought too much house or your down payment was too small. Your house may or may not appreciate in value, so you want to have as much equity in the house as possible.

10. Paying off debt is a priority. Financial stability means getting out of debt. Attacking debt should be a high priority. Debt enslaves you to the lender and restricts your freedom.  A financially stable person either has no debt or is working to get rid of all debt.

11. You live below your means. Financial stability means living on less than you earn. It’s easy to inflate your lifestyle each time your income increases. But a financially stable person has discerned a lifestyle level and learns how to be content at a level which is independent from income.

12. You track your spending in some fashion. Being financially stable means you know where your money is going and how it is working for you. There are lots of tools and apps from banks, credit card companies and financial planners to help you track your spending. Find one that works for you and use it!

13. You can handle large purchases and plan for them in your budget. A large purchase can be anything from buying a car to getting the roof on the house replaced. Regardless of what it is, financially stable people can make large purchases because they have planned for them. And they do not make large purchases on a whim.

14. A job loss or reduction in income isn’t the end of the world. Losing a job can be traumatic, but if you are financially stable that job loss is less traumatic. Financial stability gives you more flexibility since you have an ample emergency fund and other types of savings. This allows you to survive financially when you are looking for a job. It also provides a financial cushion so you don’t have to jump blindly into any job because you desperately need the income.

15. Your financial net worth increases each year. A financially stable person seeks to grow their net worth year over year. While some of it is out of your control when you invest in the stock market, many other things are in your control. You’re avoiding debt, you’re saving more so your financial cushion is increasing each year.

16. You control your money—not the other way around. As Pope Francis has said, “Money must serve, not rule.” Financial stability means you have control so you get to decide where your money goes. Your money does not control what you are able to do.

17. You can buy what you want. Financial stability provides the freedom to buy what you want because you have planned for it. When you have an important purchase to make, you can afford it because you planned ahead. You don’t buy something on credit and then try to figure out how to pay for it. The other half of that statement is that you know what you can afford, but you don’t buy stuff because you can afford it or spend money just because you have it.

18. You have financial plans and goals. A financially stable person plans for the future. They save for retirement, buy life insurance, save for their children’s college education and have an emergency fund. Financial stability means you plan for the future and you have family goals such as taking a special trip or adding a room to the house.

19. You got rid of your bad habits. It’s crazy how much money gets wasted on bad habits that really don’t do anything to increase the value of your lifestyle. A financially stable person eliminates those money wasting habits and spends their hard-earned money on what is important.

20. Your credit score is a nice high number. A financially stable person has a good credit score so if and when they do need to borrow they get the best rates possible.

21. You are a generous giver. A financially stable person has a regular amount of money dedicated to planned giving—such as at Mass each Sunday—and they have a financial cushion which allows them to respond to special giving opportunities as needs arise. You’re able to give with ease and not fear what being generous might do to your finances.

22. You never incur bank fees. A financially stable person doesn’t bounce checks because they track their spending and know what is in their account. Plus, they don’t want to waste money paying overdraft fees and bounced check charges.  

It’s important to remember that none of us are perfect and we all make mistakes and have hurdles to overcome. It’s also important to remember that financial stability is an ongoing journey, not a destination. Being financially stable means you are a faithful steward. You are making good choices that honor God in the way you spend, save and give the money he has entrusted to you.

Listen to the Compass Catholic podcast for more on this topic.

We share 22 items to help you gauge your financial stability—what’s your score?

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