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Single people all live differently. For some, it means living with their parents. For others, it means striking out on their own or with roommates in an entirely new city.
As a single, it’s awesome to be the only one in charge of where your money goes. But what about those big financial goals? How do you save for retirement, buy a house, or even pay off your debt without that sweet second income?
As long as you follow basic money-saving tips and stick to a financial plan, you can set yourself up for the future you want, whether that involves homeownership, a family, world travel, or financial independence and early retirement. Here’s how you can handle your money
Budgeting is essential for anyone regardless of their situation, but it’s even more important when you’re single. Every rupee you make should be accounted for, and you need to have a clear understanding of where that money is going and how you can allocate money to fund your financial goals. You should be living below your means each month, meaning you have money left over to save, invest, or pay down debt. If you’re in a situation where more money is going out than coming in, it’s time to adjust your budget accordingly. That means reducing or eliminating any non-essential spending.
One financial benefit of being married versus being single is that you can share living expenses or purchase a home together. Rent is a significant portion of most people’s monthly expenses, so splitting rent can make a difference.
If you decide to live alone, you’re almost certain to spend more on monthly rent than if you lived with one or several roommates. Multiperson households can split the cost of utilities and Internet bills and generally pay less per square foot of space.
One of the drawbacks of being single is that if a financial crisis comes up, it’s up to you to solve it. If you lose your job, that means no income since you may not have a spouse or partner with a job that still brings in a little money. This single means of support is why it’s so important for someone single to have an emergency fund.
The last thing you want to do in an emergency is to need to turn to credit cards or take on more debt just to get through it. More debt can only make matters worse. So, if you can set aside even a little money, it can help you when something does come up.
Debt sucks. Not only does it steal from your future, but it also keeps you stuck in your past. And since we’re on the subject, let me just say this right now: There’s no such thing as “good debt.” Don’t believe anyone who says that student loans are an investment in your future or that you need to build a credit score to accomplish your goals. If you have debt right now, the best thing you can do with it is pay it off as fast as possible.
According to Statistics, singles spend 12.8% of their income on food, whereas married couples spend 12.3%. When you’re single, it’s all too easy to eat out more and let cooking fall by the wayside. Considering how expensive eating out can be, you can save a lot of money by learning how to cook. There’s plenty of free information online, and you can also buy a cheap singles cookbook.
The best way to save for retirement is by investing. And if you’ve attacked your debt and you’re ready to put your money to work, it’s time to start stacking that cash for the future. When you’re out of debt and have three to six months of expenses saved in your fully funded emergency fund, put 15% of your total income in a good growth stock mutual fund.
The more you know about managing your money the right way, the better off you’ll be no matter what stage of life you’re in. And trust me, when you’re out there stacking cash and crushing all your goals, it doesn’t matter if there’s a ring on your finger or not. Learn the truth about how money works now so it’ll be even easier to narrow down your options.
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