As a person who is a millennial in the middle of his 30s that is married and has one child and plans on more children in the future, my state of personal finances stays on my mind. Not an obsession but a healthy level of self-awareness. It’s good to be aware of your situation and unfortunately a lot of millennials are not “financially healthy”. I am not going to do a deep dive into the circumstances of millennials, debt and money; there are plenty of articles about that topic. As I work on my own plan to improve my financial state and even generate wealth for my retirement and my children, I try to keep things in perspective. It’s easy to see where you are, where you have to go and easily get downtrodden. During this period of pragmatic thinking, I came to the conclusion that even though my situation is not ideal, it is stable and working in a positive direction albeit slower than desired. At the end of the day, I came up with three things to check to see if you are actually financially stable:

1. Your assets and income(s) outpace your debt and expenses
2. You are in good standing with the IRS and the Credit Bureaus
3. You have a retirement account and saving money towards it

Let’s take a look at them in detail below.

Your assets and income(s) outpace your debt and expenses

It’s pretty straightforward: Have more money coming in than going out. Having a salary capable of covering your expenses and even pay down any debt you possess gives you peace of mind. On top of being able to comfortably pay off any debt and living expenses, having assets not only help increase your net worth and if needed gives you access to loans but assets are also able to offer another source of income which is a double win in your financial books.

You are in good standing with the IRS and the Credit Bureaus

It’s a general good idea to avoid any attention from the Internal Revenue Service. Agree with the current tax law or not (loopholes and all), not having to deal with continuous audits or investigations is always a good thing.

What I mean when I say “being in good standing with the Credit Bureaus”, I mean having a good credit score with the three main credit bureaus (Experian, TransUnion and Equifax). Even with all the possible bias (and thus discrimination) in determining a person’s credit score, a good credit score, anything above 670, is the pathway to economic security and wealth generation and thus taking the time to build and defend your credit score is vital.

You have a retirement account and saving money towards it

Time stops for no one and retirement will creep up on you in a heartbeat. It’s well documented that it’s best to start saving for retirement sooner rather than later or in other words, let compound interest work in your favor. With that being said, it might be tough to save for retirement but if you are saving anything (however small) right now for retirement it will benefit you in the future.

Even if you are not maxing out your 401K and/or IRA account but you are saving something while you are working, it is valuable and even small amounts compound into something for your post work life.

Bonus: Ensuring your children are setup for success in the future

If you have kids or planning to have kids, your financial situation is essentially your kid’s financial situation down the road. Luckily under certain circumstances, your debt is not passed down to your kids however leaving any amount of money either via life insurance, a trust or inheritable assets including a house will give your children a leg up in their life and establish generational wealth.

Conclusion

If you are doing the above then you are okay even if it’s doesn’t seem like it. Rome was not built in a day, as long as you have a plan to improve your personal finances and have the determination to follow through with that plan you will set yourself up for success.