Americans Think It Takes $774,000 to Be Financially Comfortable. Here's How to Get There

With the right strategy, you can achieve financial security.

When you think about being financially comfortable, what comes to mind? Does it mean having enough money to pay your bills without worry? Does it mean being able to stop working and live off of your savings?

There's no single definition of what financially comfortable means. And there's no single financial figure that will help you reach that point. 

But in Schwab's most recent Modern Wealth Survey, Americans said it takes an average net worth of $774,000 to be financially comfortable. That's up from $624,000 in 2021, but interestingly, it's down from $934,000 in 2020. 

Meanwhile, no matter how much money you feel it will take for you to be financially comfortable, there are some universal steps you can take to achieve that goal. Here are a few to focus on.

1. Get into the habit of budgeting

Following a budget is a great way to grow wealth. That's because budgeting will help you take control of your spending and find ways to ensure you're saving money month after month. If you're new to budgeting, there are different apps you can play around with that might make the process easier. Or, you can go old school and use a spreadsheet, or even a pencil and paper, to map out your monthly expenses.

2. Live below your means

If you want to get wealthier over time, you'll need to not spend at least some of your earnings. Budgeting will help in that regard, but so will setting priorities early in life. You may, for example, need to commit to owning a less expensive car or home if you want to be able to save money consistently. Or, you may decide that having a larger home is important to you, and so you'll spend less on vacations instead. 

There's no right or wrong answer. The key is to decide where your money is best spent -- so you don't end up spending all of it.

3. Get into the habit of investing

Investing money you don't need right away is a great way to gain wealth through the years. And you have options in that regard.

If you're looking to invest specifically to fund your retirement, then it pays to open an IRA. Or, you can invest in your company's 401(k) plan. 

If you want more flexibility with your money, you can look at opening a regular brokerage account. You won't get the same tax breaks as you will with an IRA or 401(k), but you'll get the freedom to withdraw money from your account whenever you please. With IRAs and 401(k)s, there are penalties you might face if you withdraw funds before reaching age 59 ½. 

Go after your goals

You may decide that it takes a $1 million net worth to be financially comfortable. Or, you may decide that all it takes is enough money in the bank to cover a year's worth of bills. Feel free to choose your own definition -- as long as you take steps to work toward your goals and attain the financial freedom and peace of mind you deserve.