Being single has its perks, but it also has its issues. When it comes to finances, the same thing applies. A single person may be faced with fewer expenses (you’re paying for only one, after all) but at the same time, certain purchases can be more overwhelming. The fact that there is only one person making a living – that’s you – can also be a disadvantage at times. However, with some financial smarts, any single person can manage his money and be totally successful in this respect.
Take a look at some of these tips that a single person should follow in order to have healthy finances.
1. Have an emergency fund.
This applies to every person – single or not. For singles, however, an emergency fund might be even more necessary. In case something happens, there is no partner who can take up the slack. No one will be there to automatically pay your rent, buy your food, pay for your bills, etc. as would be the case if you were married. As such, you absolutely must have an emergency fund. Experts will tell you that you ought to have enough money stashed away to keep you afloat for three to six months in case you encounter financial difficulty. If you do not have an emergency fund, I suggest creating one NOW.
2. Do not fall into the credit card debt trap.
Singles have the advantage of not having the responsibilities associated with being married and/or having a family. While this is a good thing in general, it can also lead to unwise decisions. Singles may fall prey to impulse purchases more easily than married people. Singles may tend to use their credit more often than necessary. Let me tell you now – single or married, being in the midst of a credit card debt problem is never pretty, and it is never a wise thing to get into the situation in the first place. The only way you can have a healthy financial life is for you to get rid of your credit cards or use them wisely. If you already have existing debt, then your best course is to come up with a plan to pay this off fully in the soonest possible time.
The prevailing idea is that since singles do not have too many responsibilities, they have more cash leftover at the end of the day. While this may not be true of some, in general, singles do have more freedom to invest if they choose to do so. I suggest that you examine your income and your expenses and see if you have some money left over to invest. This way, you can secure your future and make your money work for you. If you think about it, you can forego going out every night. You may be able to do without buying new clothes every week. The list can go on and on. The money that you will be able to save from giving up a few unnecessary things or activities can be put to use more wisely – invest it.
4. Protect your income.
These days, we can’t really say that our jobs are 100 percent secure. You never really know what will happen in the future. While no one wants to even think about losing his or her job, the fact is that it just might happen; and if it does happen, do you have a plan to deal with it?
The best thing that you can do is to protect your income. Investing and having an emergency fund are a couple of ways to make sure you will stay afloat if you lose your jobe – albeit temporarily. You can also consider purchasing insurance to help you out in various cases – job loss, disability, and so on.
5. Pick someone to watch your back.
If something happens to your health and you are not able to make decisions, are plans set in place to handle the situation? Since you are single, there is no spouse or partner to automatically deal with things. You ought to pick a wingman, so to speak, who will be able to make decisions – financial and otherwise – in your stead. Needless to say, this person has to be someone you trust with your life. You also need to talk to this person before drawing up the papers.
6. Don’t ignore your bills.
If you’re like me, I tend to glance at my bills and pay. I couldn’t be more wrong in doing this! Bills need to be paid, sure, but they also need to be examined closely. This is even more true to credit card bills, bank statements, and the like. While there may not be errors often, you never know – and you’ll never catch them if you do not make it a habit to take a close look.
Another advantage of examining your bills is that you may be able to identify certain expenses that you can do away with. If you simply automatically pay your bills, you will keep on shelling out money – even for items or services that you may not use.
7. Be realistic.
This could very well be the most important tip of all. Whatever it is you plan and do, always stay grounded. How much do you earn? What can you afford? Also, do not make the mistake of basing your plans on future dreams of having someone by your side to help you out financially. Work with what you have in the here and the now. When those dreams come true, you will be better off for having been realistic today!