Blog Post
How am I doing financially? Part 2: Spending, debt & credit score
Compare your spending, credit score, and debt-to-income ratio to practical benchmarks so you can spot improvement opportunities and make targeted changes.
Your spending habits, debt load, and credit score shape your day-to-day financial life. They are not your identity, but they are useful signals.
1. Spending
Comparing your spending to others with a similar income or age can reveal patterns you may not notice on your own.
The biggest categories like housing and transportation are often hardest to change. But smaller categories, like dining out or subscriptions, can offer easier quick wins.
Money nudge
Pick one category and compare it. If you are spending noticeably more than average, ask whether the spending truly reflects your priorities.
2. Credit Score
Think of your credit score as your financial reputation. A stronger score can lower borrowing costs and make approvals easier.
The original article includes these average scores by age:
- ages 18 to 29: 680
- ages 30 to 39: 691
- ages 40 to 49: 704
- ages 50 to 59: 721
- ages 60 and up: 752
Money nudge
Check your report and choose one improvement move, such as automating payments or paying down a balance.
3. Debt-to-Income Ratio
This ratio shows how much of your monthly income goes toward debt payments.
To estimate it:
- add up your monthly debt payments
- divide that number by your gross monthly income
In the original article's example, $1,225 in monthly debt payments on $3,500 of gross monthly income equals 35%.
Money nudge
A common target is below 36%. If yours is higher, even one extra payment a month can start to shift the ratio.
Let comparisons spark curiosity, not panic.
Final Thought
These benchmarks are starting points. Use them to notice patterns, make one or two adjustments, and keep moving forward with more clarity.
If you have not looked at your net worth, income, and savings yet, start with Part 1.