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Financial Advice for Single People
Being single comes with some nice financial perks – you get to determine where every penny goes, you get to plan for special items or events without having to work around the needs of others and you have control over your financial goals. Unfortunately, singles also have no “back up” or alternate income such as those with partners, and this means some special financial planning may be required.
While everyone, single and married alike, is encouraged to regularly invest, live on a budget and have some short and long-term goals, a single person may want to add a few other items to their financial “to do” list. This includes:
1. Plan for the worst – getting both health AND disability insurance is one sure way to protect assets and be able to maintain an independent lifestyle for a single. Being ill and unable to work can spell almost instant disaster for most single budgets and these policies can help to at least reduce the impact of such occurrences.
2. Save for an emergency – many financial planners advise putting emergency funds aside, and for singles this is fairly important. The unexpected issues or events in life can sometimes wallop a budget and having a few months of income in the bank is a sure plan for preventing such situations.
3. Eliminate debts – we all know this is an important issue, but for single people and their budgets, carrying high interest debt can really make for problems. The best approach is to attack the highest rate card until it is paid off and then set sights on the next account until all balances are eliminated. Additionally, getting into the habit of buying only what can be paid off at the end of the month is a sure way of staying out of trouble.
4. Compare housing costs – many single people stay in a rental situation in order to avoid having to perform any maintenance and repairs on their own, but this may not be the wisest financial choice. There are some significant tax benefits for those who own their own homes. Ultimately the decision should be based on the length of time the single person intends to remain in the area – short term plans are ideally suited to rental properties, but anyone thinking of remaining in an area permanently of indefinitely would be, more than likely, better served by seeing an investment advisor and investing in a home.