8 signs you’re better at managing money than most people, even if you’re not wealthy

Managing money is an art, not everyone’s cup of tea.
It’s not about the size of your bank account, or how many zeros are on your paycheck. Managing money is about understanding the value of it, making it work for you, and ensuring you’re in control of it.
You don’t need to be wealthy to be a financial wizard. In fact, some of the best money managers aren’t necessarily the richest.
In this article, we’ll explore 8 signs that you’re doing better at managing money than most folks, even if you’re not rolling in dough.
1) You have a budget and stick to it
Budgeting is the cornerstone of good money management.
Why? Because it’s all about conscious control over your finances. It’s about knowing where your money is going and making intentional decisions about how to spend it.
The art of budgeting isn’t just about making a plan, but sticking to it. It’s not always easy, especially when unexpected expenses pop up or those impulse buys catch your eye.
But if you’ve mastered the art of creating a budget and sticking to it—congratulations! This is one of the clearest signs that you’re better at managing your money than most people, regardless of how much income you’re bringing in.
2) You’re not living paycheck to paycheck
Living paycheck to paycheck is a reality for many people. I’ve been there myself.
There was a time when I would anxiously wait for my next paycheck, just so I could cover my bills. Saving money seemed like a distant dream, and financial security felt out of reach.
But things changed when I decided to take control of my finances. I started by cutting back on non-essential expenses, created an emergency fund, and focused on paying off debts. It wasn’t easy, but it was worth it.
Now, even though I’m not ‘rich’ by any stretch, I’ve managed to create a buffer between my income and expenses. If my paycheck is delayed for some reason, it doesn’t send me into a panic anymore.
If you’re in a similar situation where you’re not living paycheck to paycheck, it’s a pretty solid sign that you’re better at managing money than most people. It shows that you have an understanding of your financial limits and can plan ahead – key skills in financial management.
3) You’re investing for the future
Investing is a powerful tool for growing wealth, even if you’re starting with small amounts. It’s not just for the rich, it’s for anyone who wants to make their money work harder.
Did you know that if you invest $100 a month at an average annual return of 7%, in 30 years you’d have over $120,000? That’s the power of compound interest!
If you’re consistently investing money for your future – be it for retirement, a down payment on a house, or your child’s education – it’s a strong sign that you’re better at managing money than most people. This shows that you understand the importance of planning for the long-term and are proactive in securing your financial future.
4) You’re not overwhelmed by debt
Debt is part of life for most people, whether it’s a mortgage, student loans, or credit card bills. But there’s a difference between managing debt and being overwhelmed by it.
If you’re making regular payments towards your debt, have a plan to pay it off, and are not accruing more debt than you can handle, then you’re on the right track.
Being able to manage your debt effectively shows financial discipline and foresight. It’s a clear sign that you’re better at managing money than most people.
Remember, the aim is not necessarily to be completely debt-free, but to ensure your debt is manageable and isn’t hindering your financial growth.
5) You prioritize experiences over material possessions
We often equate wealth with material possessions – the latest gadgets, designer clothes, luxury cars. But true wealth is about much more than just what you own.
In my experience, the richest people are those who value experiences over things. They understand that memories made with loved ones, or the personal growth gained from unique experiences, are far more valuable than any material item.
If you find yourself saving for a family vacation, a cooking class, or a music festival rather than the latest iPhone, it’s a strong sign that you’re managing your money better than most.
This approach not only helps keep your finances in check but also contributes to a richer and more fulfilling life. After all, at the end of the day, it’s the experiences we have and the people we share them with that truly matter.
6) You know the value of an emergency fund
Life has a funny way of throwing curveballs at us when we least expect it. I learned this the hard way when I lost my job a few years ago.
I hadn’t seen it coming and suddenly, I was left without a steady income. Thankfully, I had an emergency fund in place that carried me through those difficult months without having to resort to credit cards or loans.
If you’ve built up an emergency fund — enough to cover 3 to 6 months’ worth of living expenses — it’s a clear sign that you’re better at managing money than most people. An emergency fund acts as a financial safety net, providing security and peace of mind during life’s unexpected twists and turns.
7) You’re not swayed by lifestyle inflation
It’s natural to want to improve your lifestyle as your income increases – upgrading your car, moving to a bigger house, dining at fancier restaurants. This is known as lifestyle inflation and it’s where many people stumble when it comes to managing money.
If you’re someone who’s resisted the temptation to increase your expenses as your income grows, kudos to you! Instead of spending more, you’ve chosen to save more, invest more, and secure your financial future.
This is a clear sign that you’re better at managing money than most people. It shows that you understand the value of money and the importance of financial security over material possessions.
8) You understand that money is a tool, not a goal
The most important thing to understand about money is that it’s simply a tool. It’s a means to an end, not the end itself.
If you view money as a tool to achieve your goals – be it financial independence, a comfortable retirement, or the ability to support causes you care about – rather than as a measure of success, then you’re truly ahead of the game.
This mindset shift can make a significant difference in how effectively you manage your money. It can allow you to make smarter financial decisions and ultimately lead to a more fulfilling life.
Final thoughts
When it comes to managing money, it’s important to remember that it’s not really about the money at all. Instead, it’s about what the money can do for you, your life, and your future.
The most successful money managers understand this concept well. They’re not driven by the desire to amass wealth for wealth’s sake. Rather, they view money as a tool that can provide them with a comfortable life, secure their future, and help them realize their dreams.
So whether you’re wealthy or not, if you’re exhibiting these signs of effective money management, you’re on the right track. Keep going, keep learning, and keep making smart choices with your money. It’s not about how much you have, but how well you use what you’ve got.