Society tends to view the single person as foot-loose and fancy-free. They have no one to answer to, they can spend their hard-earned money in any way they choose, and they have much more freedom on where to spend their time.
However, being single also means that there is no one to pick up the slack if something goes wrong. We can’t predict the future – companies are sold, jobs change and unexpected costs come up. Our job is to be prepared – the savvy single anticipates change & plans ahead so we can tackle any challenge head-on.
There is an ongoing debate on who fairs better financially – married or singles. Living alone comes with certain freedoms in how we spend our money. But married folks gain the financial advantage of combined income, shared housing expenses and retirement account benefits.
Where you live is just as important as who you live with. The cost of living in major cities such as New York or San Francisco can be almost double that of living in a smaller suburb. In New York City it costs about $43,500 to cover just your annual expenses such as housing, food, health care, and transportation. In a smaller city such as Cleveland, Ohio it costs just $26,100 – which is 40% less.
Money doesn’t grow on trees – although it sure would be nice!
One surefire way to save on your expenses is to live in a city where the costs are lower. If you choose your hometown wisely, you can save a ton of money each year.
And of course, you should always strive to live within your means – and this translates to working within a budget.
A budget is one of the most useful financial tools because it helps keep track of income and expenditures. Setting up a budget will greatly improve your chances of attaining your financial goals. When creating a budget, make it as detailed as possible.
It’s important to have a very clear understanding of your current expenses. Often times we simply don’t realize how much is spent each month on food, clothes, eating out, etc. To make sure you capture everything, keep track of all expenses for at least a 3 month period. Then create an average amount spent for each major category.
This will help you make a budget that will work with your lifestyle. If you get to a point where more money is going out than is coming in, make an effort to adjust your budget accordingly.
Eating healthy is important, but that does not mean that you have to spend a fortune on groceries. Thankfully, you can still save money on groceries by using some simple strategies.
Firstly, bulk buying may not necessarily work for a single person, especially when it comes to products that go bad quickly. For this reason, you should consider buying such products in smaller quantities for slightly higher prices.
Secondly, eat out occasionally. While this may seem counterproductive, it can actually help you save some money,. For example, eating a chicken sandwich out may be cheaper than the cost of all the ingredients you would require to prepare the sandwich.
Don’t get distracted at the grocery store – stick to the list!
Finally, make a shopping list and stick to it. Be sure to watch out for those end-of-aisle temptation items. Stores will place impulse buy goodies at the end of each aisle in order to lure you into buying more. Sometimes you need to put your blinders on when in the grocery store – keep your head down, stick to the list, and by all means – don’t shop on an empty stomach!
Creating an emergency fund is essential. One of the drawbacks of being single is that, should something happen to your income, you may struggle financially if you have no emergency savings.
For this reason, you should set some money aside for emergencies. Additionally, you should consider investing for the future. This means that you should diversify your investment portfolio to include both short-term and long-term investments. Suitable long-term investments include bonds, stocks, and retirement funds such as IRAs and a 401k plan.
Make sure to plan ahead for a rainy day
Being single means that, it is entirely up to you to plan for your future. Your retirement is an important part of that future.
Try to set aside as much as you can each month towards your retirement. You should also meet with a financial planner to see how much you need to have in savings before you retire.
Even if you don’t make that much money now – putting away just a small amount can really make a difference. A financial planner will be able to work out a plan for you to stay on schedule and help you achieve the lifestyle you desire.
The key to saving for retirement again is automating the process. More importantly, start saving as early as you can.