When you are single, you are in complete control of where and how your money is being used. While an empowering feeling, it can also lead to pitfalls when there isn’t another person there to help. Here are some common mistakes that are made by single people.
NO EMERGENCY SAVINGS
Not having to provide for a family may lead you to have a little more disposable income. While it may be tempting to spend that money on fun items, it’s important that you don’t do this at the expense of not having any savings. Without someone to rely on it, it becomes even more important to make sure you have an emergency savings if something happens to you.
NO LIFE INSURANCE
Even if you’re single, having some sort of life insurance policy in place it still a good idea. In the United States, the average cost of a funeral is about $7,000. This could be a huge financial burden to your loved ones who are already dealing with your loss. Having a life insurance policy that’s enough to cover a funeral and any potential outstanding debts you may have would be a great relief to those handling your affairs.
NO RETIREMENT SAVINGS
Retirement may be the last thing on your mind regardless of your marital status. However, if you’re single, it becomes even more important to prioritize some form of saving for retirement because there’s no one else to help out when you reach that point. Furthermore, if you do get married and that person also hasn’t saved for retirement, you’re now at ground zero and having to start saving for two people. Even a personal retirement fund can be a great foundation to build upon.
With no one else to check your spending habits, you may be overspending on items and not even realize it. For example, with less tying you to your home, you may be going out with friends often and spending more money than someone who is married would. Make sure you budget and limit yourself on what you spend on various aspects of your life. If you need someone to help you budget or hold you accountable, reach out to a friend/family member or a financial planner.