Signs that someone is financially healthy or well-to-do

    Photo Above by Jared Rice on Unsplash

  Disclaimer:

This article has been rewritten to reflect more realistic and relevant signs of financial health, particularly for those in Singapore. Not all points from the original sources (see bottom of page) were applicable to Singapore or supported by financial experts in our local context. The information provided here has been carefully refined to align with expert opinions and the unique financial landscape we face.  

1. They Don’t Stress About Money

A key indicator of financial well-being is a relaxed relationship with money. Individuals who are financially well-off don’t constantly worry about their finances. They aren’t preoccupied with the next paycheck or stressed about paying bills. This doesn’t mean they are careless; rather, they have established a sense of security through savings and planning for unexpected expenses. Even when faced with large expenses, they remain calm, thanks to their solid financial habits and smart money management. If someone seems unfazed by money-related issues, they are likely more financially secure than they appear.

2. They Value Experiences Over Material Possessions

Those who are financially healthy often prioritize experiences over material possessions. They might not splurge on flashy items but invest in travel, courses, and cultural events. This choice reflects a stable financial situation, as they can focus on creating memories without worrying about their basic needs or emergency savings. Valuing experiences over things is a subtle sign of financial stability.

3. They make intentional purchases without being driven by brand names.

Financially healthy individuals often prioritize value and functionality over flashy brands. While they may appreciate high-quality items, their decisions are guided by long-term benefits rather than the desire to impress others. They recognize that true financial well-being isn’t about displaying wealth but about making choices that align with their goals and values. So, if someone appears more focused on practicality and longevity in their purchases rather than brand labels, they may be managing their finances wisely.

4. They Have an Emergency Fund

A solid emergency fund is a hallmark of financial stability. Individuals who are financially secure typically have at least six months’ worth of expenses saved up for unforeseen circumstances. This cushion allows them to handle unexpected bills without financial strain, putting them ahead of most people who may not have this safety net.

5. They Have a Long-Term Financial Plan

Financially well-off people usually have a long-term financial plan that includes retirement plans, investment platforms or investment policies, or other viable wealth-building strategies. They are proactive about their financial future, with a clear vision of where they want to be in the next 5, 10, or 20 years. Their strong grasp of financial literacy and meticulous planning are key signs of their financial health.

6. They Invest in Themselves

Investing in personal development, education, and well-being is another indicator of financial health. Financially stable individuals aren’t afraid to spend money on themselves, whether it’s for therapy, courses, or health-related activities. This commitment to personal growth, without the fear of financial repercussions, signals their financial strength.

7. They Don’t Live Paycheck to Paycheck

Those who are financially well-off do not live paycheck to paycheck. They have savings in place and don’t anxiously await their next paycheck to cover expenses. While they are mindful of their spending, their financial stability allows them to manage their money without the stress of running out before payday.

8. They Have Multiple Streams of Income

A significant sign of financial health is having multiple streams of income. Financially secure individuals diversify their income sources, whether through investments, side businesses, or rental properties. This diversification not only provides stability but also helps in building wealth over time.

9. They Live Below Their Means

Living below one’s means is a cornerstone of financial stability. Financially healthy individuals spend less than they earn, freeing up money for investments and debt reduction. This approach also gives them the flexibility to make life choices, like career changes or early retirement, without financial pressure.

10. They Keep Their Debt Manageable

Managing debt responsibly is another sign of financial health. Those who are financially secure avoid high-interest debt and make consistent payments to keep their debt manageable. This discipline helps them maintain financial stability and avoid the pitfalls that can come with excessive debt.

11. They Build Their Net Worth Steadily

Financially well-off individuals see consistent growth in their wealth over time. Their investments compound and grow, and they understand that fluctuations in the market are normal. The steady increase in their net worth is a clear sign of their financial stability and long-term planning.

12. They Maintain an Up-to-Date Insurance Portfolio

A complete and current insurance portfolio is a strong indicator of financial stability. Financially secure individuals understand the importance of protecting themselves and their loved ones. Regularly reviewing and updating their insurance coverage ensures that they are prepared for any unexpected events.

13. They Can Take a Sabbatical from Work

Being able to take a break from work without financial strain is a sure sign of financial health. If someone can afford to take a few months off to pursue a passion or hobby, it means they have built up significant financial reserves. This ability to step away from work is a privilege that indicates strong financial stability.

14. They Think About Estate Planning

Finally, individuals who are financially secure often consider estate planning. When someone starts planning how to leave their assets to future generations or to other loved ones/charities, it’s a clear sign that they have achieved a significant level of financial stability. Consulting a professional estate planner to preserve and enhance their legacy is a move that indicates they are well beyond basic financial security.

Understanding these important signs of financial health can change how we perceive wealth and success. It’s not always about visible luxury or material possessions, but rather the quiet confidence that comes from thoughtful financial planning, disciplined spending, and long-term security. By recognizing these indicators in others—and perhaps even in ourselves—we gain a deeper appreciation for the true essence of financial well-being. Remember, financial health is less about outward appearances and more about the peace of mind and freedom that come from being in control of your financial destiny.

Rewritten by:

Winifred Tan (Wini)
B.Sc (First Class Honours)
ChFC (Singapore) | AEPP | IBF Advanced Level 2CFA (Singapore) - L1 | CIPM (Int’l) Level 1
Court of the Table | Int’l Dragon Awards (Bronze) | APAC Financial Services Star Award
Top 20 GE Executive Financial Consultants | Entre-Planner

Sources I've extracted some of these realistic points from: Google;https://finance.yahoo.com/news/7-signs-financially-healthy-even-113600089.htmlhttps://www.singsaver.com.sg/blog/signs-you-are-financially-stablehttps://geediting.com/signs-someone-is-financially-well-off-even-if-they-try-not-to-show-it/