Being single can be challenging financially without a second income or someone to share costs with
Creating a budget that works for you includes writing down your financial goals
You might be able to get help with an accountability partner or by sharing a living arrangement
When you’re on your own financially, finances can feel challenging. We often think of a coupled existence as the norm, but according to Census Bureau information from 2018, about 45.1% of adults in the United States are unmarried.
“The primary challenge in flying solo is that all of the responsibility to manage the finances falls on your shoulders, versus in a relationship where you might have someone to fall back on,” said Robert Siuty, senior financial consultant at TD Ameritrade. “You don’t have another person to boost income and savings or to share expenses.”
If you’re single or otherwise without a partner to help with finances, here are five financial steps you can take to help manage your money.
1. Clarify Your Personal Financial Goals
First, it’s important to understand your short-, medium-, and long-term goals, Siuty said. He suggested writing down your goals so you can see what matters most and then figuring out a way to prioritize them.
Although it’s possible to work toward multiple goals at once, sometimes it might make sense to put more money toward debt reduction and less toward investing for retirement, depending on your personal financial goals. Without a second income, being able to approach goals with clarity and prioritize them is especially important. For some singles, it might be necessary to consider a side hustle or part-time job to raise the income needed to meet your goals.
Even though some couples look for ways to bring in extra income, it can be more difficult to manage that when there’s only one person involved. This makes it especially important to be clear on personal financial goals and create a plan to get there.
2. Create a Budget That Works for You
Once you have your goals, build a budget around them.
“Sit down and figure out your inflows and outflows,” Siuty suggested. “Decide which discretionary funds you can cut so you can allocate money to goals like paying down debt, building an emergency fund, and investing for retirement.”
This doesn’t mean you can’t have any fun or spend on frivolous items. However, you might need to be especially careful about which things you spend your money on when you don’t have a partner to provide extra income or share some of the costs.
Siuty pointed out there are some goals in your budget, like an emergency fund, that you might need to super-charge.
“When you have a partner and two incomes, you might be able to get away with a fund that only covers a few months of expenses because you can rely on that other income,” he said. “If you’re single, you don’t have that second income to fall back on, so you should plan for a bigger emergency fund.”
When budgeting, use online calculators to estimate how much you might need to set aside to reach certain goals because it might require more planning than you’d do with the help of a partner.
3. Consider Finding a Cost-Sharing Arrangement
Being single doesn’t mean you can’t share costs with someone else, however. “Taking on a roommate can be a consideration to reduce the cost of living by splitting expenses like rent, utilities, etc.,” Siuty said. Another alternative might be to use carshare services, which can be cheaper than owning a car for those who live in metropolitan areas. Carefully look for ways that can allow you to split at least some of your costs with others to stretch your budget further.
4. Use an Accountability Partner
Even if you don’t end up sharing expenses with another person, there can be value in finding an accountability partner to help you stay on track with your finances.
“When you join group fitness or health programs, that accountability goes a long way, and it can work similarly for your finances,” Siuty explained. “Find someone with similar financial goals and objectives to help you keep your budget front of mind.”
The right accountability partner can provide encouragement and advice. Plus, you’re more likely to stay on track when you have to check in regularly. Rather than relying on a romantic or life partner to help you stay on track, your accountability partner can be a huge asset to helping you avoid missteps with your money.
5. Learn More About Money
One of the best things you can do for your finances—whether single or coupled—is to learn more about money management and investing. Use that knowledge to your advantage. When you know how to maximize each dollar and put it to work for you, you’re one step closer to achieving your financial goals.
And don’t be afraid to look for additional help. Here are some retirement resources to help you streamline your strategy. And you can always consider scheduling a complimentary goal-planning session with a TD Ameritrade financial consultant.
Being single—whether you’re suddenly single or you’ve been single for a long time—presents challenges to money management. However, the right planning and the right approach can move you toward your goals and keep you on course. You’ve got this.