59% of Americans say this can be a sign of success – it's not wealth

When Americans measure their success, they often don't take into consideration their net price or their bank balance.

About 59% of Americans surveyed say happiness — specifically the flexibility to spend money on things that make them completely happy — is crucial measure of success, a study finds latest report from Empower, a financial services company. Respondents were asked to pick out the three forms of success that matter most to them.

Meanwhile, 35% of respondents said that they had free time to pursue their interests. The same proportion cited physical well-being.

“Few people consider wealth itself” to be the most effective measure, said Rebecca Rickert, communications director at Empower.

Only 27% imagine wealth is the final word measure of success, the report said.

Empower surveyed 2,203 U.S. adults in September.

“Americans equate success with luck when it comes to what money can buy,” Rickert said.

That's not surprising considering many individuals live paycheck to paycheck — meaning regular expenses make up nearly all of their income, without leaving much for savings.

In the third quarter of the yr, nearly half of survey respondents agreed with the statement “I live paycheck to paycheck.” a current report from Bank of America.

An evaluation of the bank's internal data found that 26% of households live paycheck to paycheck. This includes 35% of households earning lower than $50,000 per yr and 20% of households earning greater than $150,000.

Other aspects, including inflation and better rates of interest, have made it harder for people to make ends meet. About 35% of Americans surveyed imagine the economy is the largest obstacle to success, followed by income instability at 30%, in keeping with the Empower report.

These challenges are inherently “forces beyond your control,” Rickert said.

But in some ways, “people are their own secret to success,” she said.

Creating a financial statement can allow you to save for long-term goals and make room in your budget for short-term needs.

“You have to find a balance,” said Clifford Cornell, a licensed financial planner and associate financial advisor at Bone Fide Wealth in New York City.

“It's great to have money set aside for retirement,” a financial planning priority, he said. “But at the same time, we have to live today. Tomorrow cannot be taken for granted.”

Joyful purchases could be as small as occasionally visiting a coffee shop as an alternative of constructing coffee at home, Cornell said.

“For some people it can be almost medicinal,” he said. “They really enjoy the whole experience.”

According to experts, purchasing items and experiences that make you completely happy often comes right down to benefiting from your money flow.

Some recommend the 50-30-20 rule, a budgeting framework that sets aside 50% of your income for essentials like housing, food, and utilities, 30% for “needs” or discretionary spending, and the remaining 20% ​​for savings and investments.

The structure could be a great place to begin, but it may be difficult to follow, especially given the high costs of housing and childcare. For example, in keeping with Harvard University's Joint Center for Housing Studies, half of renters within the U.S. were “cost-burdened” in 2022, meaning they spent greater than 30% of their income on rent and utilities.

If a teenager is just starting their profession after college, it might not be possible to save lots of 20% of their income, Cornell said.

“Maybe we're really stretching the dollar just to save 5 or 10%,” he said.

Shaun Williams, private wealth advisor and partner at Paragon Capital Management in Denver, the No. 38 firm on CNBC's 2024 Financial Advisor 100 list, agreed: “I don't really like the 50-30-20 rule, and almost no one does.” follow it.” It.”

Instead, discover a share that works best for you and your current financial situation

Another method to find room for joyful spending in your budget is to take inspiration from “cash stuffing,” which involves dividing money into different envelopes for spending. Decide how much you should spend on a specific activity for a particular time period, be it a number of months or years, and arrange a savings account toward that goal, Williams said.

When making long-term plans, attempt to think concerning the kind of lifestyle you should live and work out what the needs, wants and dreams may cost, Williams said.