In recent years, being single has become more common, with over half of American adults choosing to live without a partner, compared to just 22% in 1950, according to the Bureau of Labor Statistics.
While being single brings some financial perks, it also presents unique challenges. Let's look into both and offer some advice on handling them.
Benefits of Being Solo with Your Finances
When you're single, you don't have to worry about conflicting money habits or arguments over how to spend and save.
You can set your financial goals and follow through on them without having to compromise for a partner. This can lead to more freedom and flexibility in how you manage your money.
Challenges and Solutions for Single Financial Planning
1. Housing Costs
One of the biggest hurdles singles might face is affording housing on one income. Living alone often costs more than sharing expenses with a partner. To keep your housing costs manageable, try not to spend more than 28% of your monthly income on housing.
Also, keeping your total debt below 36% of your income can keep finances more manageable. If these numbers seem unreachable, consider getting a roommate, moving to a cheaper area, or finding ways to increase your income.
2. Extended Unemployment
Long-term job loss can hit singles hard, as they don't have a partner's income to fall back on. It's wise to save at least six months' worth of living expenses in an emergency fund.
This money should be easily accessible, like in a savings account or money market fund, and not tied up in investments that could lose value or be hard to sell quickly.
Check Out: Breaking the Cycle of Paycheck-to-Paycheck Living: Tips on Budgeting, Emergency Funds, and Boosting Your Income
3. Healthcare
Healthcare in the U.S. is expensive for everyone, but singles need to be especially prepared. Make sure you have good health insurance and consider additional policies like long-term disability or care coverage, which can protect you if you're unable to work or need extended medical help.
Saving in a Health Savings Account (HSA) if you're eligible can also offer tax benefits and ensure you have funds available for medical expenses.
Conclusion
While singles might face certain financial challenges, like higher costs for living alone or ensuring they have adequate safety nets for unemployment and health issues, they also enjoy greater control and flexibility over their finances.
By planning carefully, saving strategically, and protecting themselves with the right insurance, singles can achieve their financial goals and enjoy the benefits of solo living.
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