There's a ton of advice for single ladies regarding relationships, but what about when it comes to your finances? As a single woman, it's critical to start saving and investing as early as possible. Why? Because when it comes to your personal finances and your financial success, you alone are entirely responsible. And that includes building long-term wealth for your future self.
Without a dual income, it's important that you have your finances in order because you are essentially the only one responsible for your financial wellness. Even if you intend to get married or manage your finances jointly with a significant other, it's still important that you have a firm handle on your finances on your own beforehand.
People are single for various reasons, including choosing not to get married, divorce, or loss of a spouse. 31% of adults in the U.S. are single, and women are more likely to be single in their older years due to many reasons such as divorce or being widowed.
Being single, you may benefit from only having to take care of yourself (if you have no kids). However, keep in mind that you may not have anyone to take care of you in the event of an emergency or in your old age.
That being said, let's discuss exactly what you should have in place for your finances if you are a single woman.
7 Pieces of financial advice for single ladies
Check out our savvy financial advice for single ladies that will help you reach your money goals!
1. Go the extra mile with your emergency savings
The typical recommendation for emergency savings is 6 to 12 months of your essential living expenses. However, our advice to single ladies is to have a larger buffer. Twelve to 18 months' worth is a good start. It should be enough to cover you in the event of a job loss or financial crisis such as housing challenges.
If you have no other income source, you want to make sure that you have a nice "cushy" cushion to fall back on. If you have kids, be sure to include their essential needs in your emergency savings as well.
2. Get disability insurance
If you are single and employed but unable to work (health issues, surgery, etc.), your entire source of income could be jeopardized if you need more time off than what your work leave policy allows. That's why having adequate disability insurance is critical (especially if you are a single parent). If your employer offers both short- and long-term disability plans, take advantage of them.
Having disability insurance in addition to your emergency savings will be a solid buffer that can help you weather a difficult time. You can also get disability insurance outside of your employer at a premium. If it's something your job does not offer, you should seriously consider obtaining your own. You can compare quotes from various insurance platforms or by asking your local insurance provider.
3. Start saving for retirement ASAP
Whether or not you decide to get married or manage your finances with a significant other in the future, our advice for single ladies is to start investing for retirement as early as possible. You'll be able to take advantage of the time you have as well as the power of compound interest.
If you do settle down with someone else, you'll have more money for your future from the combination of your portfolios. However, if you don't, you'll wind up just fine if you've been saving on your own. Also, keep in mind that, on average, women live longer than men. So, you will need more money for yourself long term.
Start investing by contributing to your employer-sponsored retirement savings accounts and/or IRAs. Your goal should be to max out your contributions if possible.
4. Fall in love with budgeting
Make your budget your BFF... for real. Find a budgeting style that works for you and put it into practice each month. Budgeting is a great practice to master your money. It will help you with tracking your income and expenses and planning out your savings and investments.
Be sure to budget for your savings, so you don't overspend or forget. You can save money regularly by setting up automatic transfers. It's like setting up your savings on auto-pilot. Pick a set amount or percentage of your paycheck to be automatically transferred to your savings. This will bulk up your savings account fast and simplify your finances.
5. Create multiple streams of income
The best financial advice for single ladies is to create multiple streams of income. This ensures you have multiple sources of income coming in, rather than just one. For example, you may have a full-time job, but you can start a side hustle to bring in additional cash.
Setting up passive income is another sure way to set yourself up for financial success. Passive income is where you earn money without using up much of your time after the initial set-up. For instance, rental properties, royalties, and affiliate marketing are all considered passive income.
Having multiple income streams creates financial security. It also prevents you from financial devastation from unexpected events such as a job loss.
6. Get out of debt
Getting out of debt is the true path to financial freedom. Being debt-free means you aren't throwing money away on high-interest credit card payments, you finally have your car paid off, and you don't owe anything other than your basic living expenses. It can be hard to face your financial situation, but creating a debt payoff strategy will help you make a plan and motivate you to become debt-free.
To stick with your plan, you may have to change some bad money habits. For example, if you're an impulse shopper, you will need to learn how to avoid triggers and stop spending money. Learning how to be a savvy shopper with all of your purchases can also help reduce costs. However, it will be totally worth it when you have all that extra money to put towards investing or saving instead!
7. Surround yourself with the right people
Remember how your parents were always worried about who you were friends with? Well, the truth is, your circle of influence can make or break your goals. Other people's habits and moods can influence you positively and negatively. That's why it's important to surround yourself with others that are goal-oriented. For example, if your friends are constantly shopping, eating out, and blowing all of their money, it could influence you to follow suit.
Of course, you need to treat yourself once in a while, but it's important not to let your friends derail your goals with their habits. Not that you have to ditch all of your friends but try to seek out other people that will motivate you to achieve your goals too!
In a relationship or planning to settle down?
A UBS study shows that 82% of single millennial women in the United States want to get married and expect financial security from their partner when they do. Our advice for single ladies looking to tie the knot is that you want to work as a team when it comes to your finances when you get married. Communication is key when it comes to a successful relationship. It's important you create financial goals together and sit down together to review your finances regularly.
It's important to keep both parties involved in what is happening with the finances in the household. Also, the better you manage your money together, the less financial stress you will have on the relationship.
Be a financially savvy single lady
What it all boils down to is this: No one can care about your financial future more than you, so it's important that you start saving and investing consistently as soon as you can! Applying these tips can prepare you for unexpected events, bulk up your savings, and set you up for a comfortable retirement.
Our key advice to single ladies is to become as financially savvy as possible! You can learn more about destroying debt, building your credit, and creating financial goals with our completely FREE financial courses and worksheets!