Single people often get left out of the financial education loop. A lot of personal finance tips are geared toward couples and families. I’m guilty of this. But here’s a post just for all you single people out there. Being single impacts your financial life in a lot of ways. On the bright side, your income is all your own to spend as you please. Unfortunately, this also means there is no one inside your financial life to keep you accountable to your financial goals. Most financial advice applies to you regardless of your financial status, but here are a few ways your situation differs, and how you can make the most of it.
1. Don’t give into homeowner pressure
You do not have to own a home to be a financial success. Repeat that to yourself every time a well meaning parent or friend asks you why you haven’t purchased a home yet. Houses are not only expensive but they also require a lot of upkeep which can be a lot for one person to deal with on their own. That being said, you can absolutely do it if you have enough money saved up and your housing expenses stay under 25% of your take-home pay.
2. Make room for higher entertainment expenses
“Not to encourage a stereotype, but single people probably spend more on drinking and dining out than a married couple with young kids. Find places in your budget to accommodate your higher entertainment needs. An ideal budget allocates 5 percent of your take-home pay to medical expenses, yet chances are a healthy single adult won’t need the entire 5 percent. Entertainment should also be allocated 5 percent of your budget, so if you save some in medical, you can move any extra into your entertainment fund, amping it up to 7-8 percent of your take-home pay.” (courtesy of SmartyCents.com)
3. Find financial accountability
A financial life lived unchecked is a dangerous one. Hopefully you have a good sense of what you are doing and are making smart choices, but couples will always have an upper hand when it comes to accountability. “Find a trusted friend or family member to confide in. Ask them to check in on your financial goals once a month. Or hire a financial advisor. Either way, you will be more aware of your finances if you have someone to encourage you towards your goals.” (courtesy of SmartyCents.com)
For more tips on how to manage a budget as a single person check out my column over on SmartyCents.com.
Peter Dunn a.k.a. Pete the Planner® is an award-winning financial mind and a former comedian. He’s a USA TODAY columnist, author of ten books, and is the host of the popular radio show and podcast, The Pete the Planner Show. Pete is considered one of the foremost experts on financial wellness in the world, but he’s just as likely to talk your ear off about bass fishing.