A lot of financial advice is aimed at couples or parents. Yet it’s singles who probably need it the most. So here are 5 financial planning tips for those single ladies (and men) out there.
Get Insured
When you’re on your own, you’re relying on the one income. But this doesn’t mean you can’t get help. Take a look at income protection. This type of insurance can cover your living expenses when you’re unemployed for an extended period of time or disabled. The level of coverage and events that trigger it will depend on the insurance policy. As your savings grows, you can change insurance coverage to cover what you can’t self-insure. Sign up for health coverage so that you don’t pay as much when unexpected medical bills arise.
Save, Save, Save
If you’re single, you might not have much support when it comes to paying the bills. So you want to make sure you split out your pay to cover your living expenses. One way to do this is to pay yourself first, sending 5 percent or 15 percent to savings every paycheck so that you have money saved when emergencies arise. Try to put 5 percent in an emergency fund and 5 percent to a retirement account to start. Once you balance your budget to live off 90 percent of your income, put 20 percent to savings and live off the other 80 percent. The sooner you start saving for retirement, the more time your money has to compound. Invest retirement savings but keep your emergency fund available so you can pay for that crunched car or unexpected dental bill. Then you won’t have to charge it to a credit card with 15 percent interest.
Shop Around for Insurance
Shop around for insurance. Look for value when it comes to homeowner’s insurance, car insurance and disability insurance. Don’t add on extras with your insurance policy like paying for riders that you won’t use. Use the savings to build up your savings or pay down debt.
Create a Budget
Create a budget so that you decide where your money goes instead of wondering where all the money went. This will help you allocate money and start saving towards various goals, ensure bills are paid and keep spending in check. It’ll also minimise how much interest you pay on debt/ give you a plan to pay off debt if it occurs.
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