Singles face unique financial hurdles and challenges, but sometimes they get left out of the money conversation. That’s not okay! I want to equip singles to take ownership of their financial situation no matter their age or stage of life. Your marital status doesn’t change the basic financial principles that will lead to success with money—get on a budget; get out of debt; get an emergency fund; and get a plan for your retirement savings.
Once you’ve got the basics down, there are some specific truths you need to keep in mind as you earn, save, invest, spend, and give. Be aware of these things:
1. Stay Accountable
As a single, you don’t have a built-in accountability partner. That means you need to find someone to fill that role—a trusted friend or sibling. You need someone to say no when you’re about to make a bad money decision, whether it’s buying a new car or raiding your emergency fund. And you need to be honest with them. Without somebody to pull you back, you’re more likely to make stupid choices.
2. Be Clear With Your Budget
Because you are the only one who sees your budget, you could easily get fuzzy with where your money goes. Without a defined place to go, your money will wander off—an extra night out with friends, high-end coffee splurges, a bigger TV than you need. Give every dollar a name. You are solely responsible for your financial future!
3. Don’t Numb Tough Emotions
Some people—single and married—try to get rid of their feelings by replacing them with substitutes. For example, if you’re lonely (or scared, disappointed, frustrated, etc.), you might shop to feel better. Or you might spend too much money socializing with friends. In the end, you’ll feel worse because you wasted money. Instead, try a better (and less expensive!) outlet—work out, pick up that long-lost hobby, talk to a friend, or shop for stuff you actually need.
4. Love Your Life, Not Theirs
Comparison doesn’t stop with outward appearance. You can look at others’ lifestyles and become discouraged because yours doesn’t match up. Here’s the problem with comparison, especially in the digital age: You’re looking at others’ highlight reels. You don’t see the arguments, the debt, the insecurities, or the struggles. Remember this: Comparison is the thief of joy. You’ll never find contentment or satisfaction by using others’ lives as the measure of your success.
5. Invest Now, Not Later
Young singles are prone to put off saving for retirement. After all, you’re only saving for one person, right? This attitude could cost you precious time—and money. Take John. He’s in his mid-twenties and makes about $40,000 a year. If he invested 15% of his income ($6,000) starting at age 25, he’d have more than $1 million by age 55, assuming a 10% rate of return. If he waited 10 years and began investing at 35, he’d have only have $378,000 at age 55. He’d have to work another decade to reach the $1 million mark. Time and compound interest are your best investing tools!
Whether you’re married or single, young or old, you need to do one more critical thing: You need to put together a team of people to help you with investments and savings, estate planning, taxes, insurance, and other important life decisions. When it comes to these issues, you don’t ever want to go it alone. And the good news is that you don’t have to! With the right team in place, you can face your financial future with confidence.