15 Signs Your Savings Puts You in a Better Position Than the Average American

Uncover the silent indicators that scream you're winning the savings game.

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Updated June 6, 2024
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Any amount of money put into savings can be a good thing. It enables you to take full advantage of compound interest and, in some cases, tax advantages if invested in a retirement account. 

One of the ways to gauge how well you’re doing is to consider how you stack up to other Americans. While there are many methods to determine this, consider the following measures specifically.

Here’s how to tell where you stand financially based on your savings compared to the average American.

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You have a high-yield savings account

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Do you use a high-yield savings account? The average interest rate on a regular bank savings account in December was 0.61% annual percentage yield (APY), according to Bankrate. But a high-yield account may pay as much as 4%.

The rate of interest is variable and can change often. But putting your savings or emergency fund into a high-yield account will earn more money. Look for an account with a low minimum investment to earn the highest annual percentage yield.

You’re contributing to retirement accounts

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Are you putting money into your savings for retirement specifically? Doing so gives you a big boost because of the tax advantages of these accounts, as well as planning for your future.

In 2020, 58.1% of baby boomers had a retirement account. According to U.S. Census Bureau data, Gen X members followed with 56.1%, and just 49.5% of millennials had a retirement account.

You have an emergency fund

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An emergency fund can be one of the most important tools to avoid borrowing for unexpected expenses, but not everyone has one.

Having an emergency fund means putting money into a savings account that’s accessible if you need it, but that’s untouched unless there is a true emergency need. It can help you recover from a financial shock.

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You’re paying less in credit card interest

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How much interest are you paying on your credit card debt? According to data from Bankrate, the average credit card interest rate in November was 20.72%.

Among all cardholders, 47% carry debt from month to month, according to a Bankrate survey. If you don’t carry a credit card balance, you’re doing better than nearly half of all cardholders.

And that interest rate on credit cards is among the highest for all types of borrowing.

You no longer have a mortgage balance

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Owning your home without carrying a mortgage may mean you’ve worked hard for years to pay down the debt. It also means you are one of the few people in this position.

According to U.S. Census data, nearly 40% of homeowners in the U.S. owned their homes outright in 2022. That’s up from 7.9% in 2012. Not surprisingly, most of those who are mortgage-free are nearing retirement age.

You know how much you need to retire

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Have you thought about and created a plan for retiring? Many people are working hard to meet their daily financial needs and don’t think much about something that will happen decades from now.

If you’ve done the math and know how much you need in the bank to reach your financial goals, you’re doing better than many Americans.

There’s no surefire dollar amount that works for everyone, but you should be maxing out your retirement savings each year to be sure you’ll have enough to retire.

You own your home

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If you own your home instead of renting, you’re doing better than many Americans. Data from the National Association of Realtors found that, in 2021, about 65.5% of Americans owned their home instead of rented, up 0.4% from the prior year.

Owning a home gives you numerous advantages, including a low-cost way to borrow money if you need it using your home equity. Eventually, you’ll pay off the mortgage, meaning that monthly mortgage payments will eventually disappear.

You’re using a budget

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A budget is a very helpful financial management tool. It lets you know exactly how much money you need each month, how much you’re saving, and how much you're spend on “wants.” Every component of it can help you to reach your financial goals.

One survey completed by OppLoans found that 73% of Americans don’t follow a budget on a routine basis, and about 10% don’t maintain a budget at all.

You’re paying off your credit cards routinely

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Here’s another way you’re standing out: You pay off your credit card balance in full each month. Using credit isn’t bad, especially when it helps you manage your money in one space.

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You’ve been saving money most of your working life

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The sooner you start putting money into savings, the better. That gives it time to build and grow in value, especially considering long-term compound interest.

While funding a retirement account at a young age is ideal, any type of savings account can be beneficial to use to get started on building wealth now.

You maximize your retirement contributions every year

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In 2023, the allowable limits for contributions to tax-advantaged savings plans were $22,500 for 401(k) or 403(b) plans or $15,500 for SIMPLE plans. Are you putting that much into your savings each year?

If you’re over 50 by the end of 2023, you can make an additional catch-up contribution of $6,5000 for 401(k) and 403(b) plans or $3,500 for SIMPLE plans. If you’re hitting the max each year, you’re getting the biggest bang for your buck.

You use college savings plans to fund your children’s costs

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Another way to put yourself in a better financial position is to utilize the tax breaks from college savings plans, like 529 plans.

Not only does this offer you a way to pay for your child’s or grandchild’s college tuition at a more affordable rate, but it also gives them the ability to start their adult life without a significant amount of debt on their shoulders.

You own stock or other investments

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Look beyond retirement savings and accounts to other types of investments you have. Are you putting money into stocks and bonds? Do you own real estate that provides an income stream? You could be in a smaller group of people that do.

Less than 60% of Americans say they own some type of stock, and some do that through their retirement accounts.

You have an HSA

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A health savings account (HSA) is a way to help you cover costs related to your health care beyond what your insurance pays, including out-of-pocket expenses. Yet, according to the Center on Budget and Policy Priorities, only one in six people have one.

Contributions to an HSA are tax-deductible, and the earnings and withdrawals are tax-free if used for qualified medical expenses.

Unlike a flexible spending account (FSA), HSA money has no deadline for when it must be used. You can save now and use the funds to cover expenses in retirement. To open an HSA, you must be insured in a high-deductible health plan.

You have a plan to pay down high interest rate debt

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Most Americans have some debt, whether good debt like a mortgage or bad debt like credit cards. What puts you in a better place than some is that you’re working to pay it down. Even if you have a lot of debt, planning to get out of it sets you on the right path.

Getting out of debt isn’t simple, but having a payment strategy, like the snowball or avalanche method, shows you’re trying to pay off your debt for good.

Bottom line

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Are you feeling like you’re not hitting all the marks here? You’re not alone, but that doesn’t mean you can’t make big changes now that will help you build wealth and a better financial future.

Now may be the perfect time to tackle just one of these areas to put yourself on a better financial path for the future. You can start by paying down your debt, then use the extra money you’ll have to invest in a high-yield savings account.

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Author Details

Sandy Baker

Sandy Baker is a has over 17 years of experience in the financial sector. Her experience includes website content, blogs, and social media. She’s worked with companies such as Realtor.com, Bankrate, TransUnion, Equifax, and Consumer Affairs.