Married couples seem to get a lot of breaks when it comes to finances—presumably, two people are earning (and sharing) income; they might have more choices for affordable insurance, and they often enjoy more generous tax deductions. Yet they also have to navigate tricky financial situations, such as allocating their budgets if they have different financial priorities and spending habits.
Not having to cater to someone else’s expensive shopping whims is reason enough to enjoy your blissful single financial life. Here’s how to make sure you stay on track financially.
Think through goals and values
Having another person to answer to can help keep you from blowing through money in the moment. But there’s no reason not to be accountable to yourself by looking at your finances from a holistic perspective. Devote some time to thinking about how you want to live your life, which will help you identify both long- and short-term goals you can start working toward. For example, you may decide to treat yourself to a solo vacation next summer as a short-term goal and then vow to save up for a down payment for a house as a longer-term goal.
Create a budget
Again, the only person you have to consider in your budget is you, which can make this a much easier exercise than couples face. Add up your total income and look through past bills and bank statements to determine how much you need to allocate to necessities. Remember to make saving the next part of your plan. Then you can see the amount that’s available for frivolity, from entertainment to gifts. Turn to the Valley’s Mobile Banking app as a key resource for managing your finances on a day-to-day basis.
Maintain your credit score
The good news? No one is making dumb financial decisions that could ruin your credit score. The bad news? That person might be you. You want to keep your credit score stellar to qualify for the best terms and interest rates on future loans. Find out what impacts your credit score, and check yours regularly for free at a site like AnnualCreditReport.com.
Consider viable options for your housing situation
One distinct benefit of being married is combining resources, which creates a bigger pool for rent or a down payment. But singles have choices as well. You may find a roommate to help with rent and utilities—even if it’s only temporary while you build up your savings. Or, if you’re in a good financial position, consider buying a home with a trusted friend or family member as an investment.
Build a substantial emergency fund
Without a partner to rely on, you want to be prepared for an untimely bill or even an unexpected job layoff. If you still need a robust emergency fund, creating one should be a priority so you can confidently have readily available financial resources if needed. Otherwise, it’s all too easy to resort to running up high-interest credit card balances.
Find ways to economize
When you’re part of a couple, hanging at home often is the activity, while singles are often more apt to go out on the town rather than sit on the couch solo. Going out can be good for your mental health, but look for wallet-friendly activities like outdoor adventures or happy hour, rather than a spendy dinner or concert.
If you have a group of friends you regularly meet, suggest going to each other’s homes for a potluck meal and game night. They’re likely to appreciate the budget-savvy plans as well. And if you crave travel, find a like-minded buddy to take advantage of shared rooms, packages and other vacation deals.
Prioritize saving for retirement
While it might be hard to think about a future that seems so far away, it’s important to build your life as though you will stay single, which means saving for your own retirement. The need might be even more acute for women, who outlive men by an average of three years, finds the Centers for Disease Control. Those final years could bring major health needs, and if you remain single and child-free, you may have to pay out-of-pocket for care a partner or child might otherwise provide.
Pay attention to paperwork
Finally, ensure your affairs are in order, which is just as crucial for a single person as a married one. That includes designating a friend or family member to be your medical power of attorney, should critical decisions need to be made; creating a will or trust that designates beneficiaries for your possessions and finances; and getting a life insurance policy to help cover funeral costs.
Living your best financial life as a single
As part of a healthy, vibrant single life, you’re accustomed to putting your self-care needs first. Add your finances to that list to ensure you can continue to enjoy your life the way you choose. For more information on money matters, visit the Valley Learning Center today.