Single and have no plans in settling down anytime soon?
You are not “alone” (no pun intended).
In the U.S., there is a rising trend of adults who have chosen to delay marriage, according to a research report released by Pew Research Center. The study says that about one in every five adults age 25 and above (about 42 million people) have never married.
That’s double the rate compared to 1960, when only 1 in every 10 people in the same age bracket, have never married. Reasons vary but one thing is a sure bet on the list: financial security.
1 out of 3 single adults between ages 25 and 34 attribute their single status to financial concerns.
Indeed, financial security has become an impediment in settling down for this generation of adults.
Our concern, however, is not to find a silver bullet for this on-going trend. Rather, we’d like to help single adults make money a little bit less of a “concern” (read: worry) while they are on their own.
How? Consider the following money tips:
Simple Money Tips for Single People
Maximize your savings
There are financial advantages and disadvantages to being single. When you are single, you have fewer financial responsibilities compared to married people who have kids and mortgages. Your income is all yours, except if you have made a voluntary commitment to help your family. In such case, you should be able to keep a higher percentage of your income.
When you are single, however, the disadvantage is that you are all by yourself, financially or otherwise. Married people share household costs and emergency expenses with their partners. Single people cannot rely on anyone for such needs that’s why increasing their savings should be a priority.
Minimize your debt
This is simply a corollary to the first one: you can’t increase your savings if you have huge debts. Single people are often accused of living a carefree life, spending on stuff and accumulating things that have no value at all.
That’s true for some. And instead of increasing their savings, they accrue huge debts and spend their career life trying to pay them down.
The problem with debt is that they take a lot of time to pay off. Time used to pay off debt is time lost in growing your money. This brings us to our next point.
You are young, able, and earning a decent income for yourself. You might be a little picky, too. If you can’t pick a partner at the moment, pick a good investment like a 401(k) or Roth IRA, instead.
Grow your money; have a passive income aside from your active income. Harness the power of time. It’s something that your future self will thank you for. Who knows, when you have finally decided to settle down, your investment might be ripe for the reaping already.
Increase your active income
You don’t have any household commitments yet, no kids to tend to, no regular dinner dates with your spouse’s family. More or less, you have a flexible schedule that will allow for more income-generating activities, without compromising time for anyone.
Instead of spending all day glued on TV or social media, consider using some time for an extra job or freelance project. Combined with your day job, this should help accelerate your savings and investment, and make financial concerns fade slowly to the background.
While it’s good to be able to maximize earnings, single adults should not neglect protecting their earning ability. Thus, it’s important to have some form of cushion in tough times. For example, a health insurance, or a term insurance with a sickness benefits might help you weather the costly effects of medical care.
This will protect yourself from enormous debts or your savings from getting wiped out and having to start all over again. Of course, there are things to consider when getting an insurance, so that you are neither over- or under-insured.
Plan for retirement
How much retirement income would you like to have? How expensive or modest do you think your lifestyle would be? As previously mentioned, single people don’t have the luxury of company when it comes to money matters so it’s important to navigate these questions and work out solutions in advance.
Being single, however, also carries some benefits because it makes for easier financial decisions – something that many “paired” people find a constant struggle.
Whether it’s your choice or not, singlehood does have benefits from a practical financial perspective. Take advantage of them while you wait for your turn to settle down.