Finance For Singles 1 – Getting Started
So much of the advice around personal finance assumes that you’re part of a couple, or you aspire to be. More of us are choosing to stay single and for longer, and if that’s true, it’s important to take matters into our own hands.
Over the next few blog posts, I’ll be offering some advice on what to do, and first, we’ll look at what you need to think about to guarantee financial security.
Freedom and Challenges
Being single brings freedom and challenges for your money, so let’s look at how to make the most of the opportunities and avoid the pitfalls. I’ve had questions from listeners in the past asking for help, such as:
“I really can’t see myself with a life partner or child any time soon, and I’m worried about how to sort out finances when the advice is so often based on a two-person income with a family. How do I plan financially if it’s just me forever?”
At the outset, it’s important to define what we mean by ‘single’, and this is aimed primarily at those who have never been married or cohabited, and those who don’t have kids.
This might seem limiting, but there are a million possible permutations of what ‘single’ means, and it’s best not to have caveats all over the place by trying to give advice to different groups of people in one go. We’re looking at those who aren’t in a relationship and aren’t likely to be any time soon, and there are no kids on the horizon.
Let's answer the question, what do you need to do to put your finances on a secure footing if it is just you forever? What do you need to know and what should you do?
Three things you need to know
It’s amazing how little there is online about this subject, and most of the advice about financial planning for singles is from the US, so the aim of these blogs is to help those in the UK. I believe there are three things you need to know to be financially secure.
1. The basic rules are the same for singles
The fundamentals of finance are the same for singles as for those in relationships. I cover these basics in my eBook, which you can find here, but in summary:
- Spend less than you earn
- Ensure against disaster
- Invest wisely
These are universal rules, and can apply to anyone and everyone. It’s important that you internalise these.
2. It’s all up to you, but the key difference is that you’re on your own
You’ve got no-one else to rely on, and your financial future is entirely up to you. That’s got ramifications, and these are different to those faced by couples.
If you lose your job, there’s no second salary coming into the home that you can fall back on. There are also ramifications around long-term saving and investing, and there’s no mutual accountability, which works both ways.
There’s no-one else to answer to, but there’s no-one to gee you up when you can’t be bothered, to say: “Come on, let’s stick at it.” You’ll have to rely entirely on your own focus and your own drive, and that’s not always easy.
3. Being single brings an element of freedom
Not having someone else to answer to can have its benefits. Any decisions can be made instantly and without compromise.
You don’t have to consider anyone else’s feelings, opinions, prejudices, preferences or petty wants. You are your own boss and your own coach. It’s a freedom which is the flipside of the relative security of having two people heading towards the same goal, but where there’s always compromise.
As a singleton, you’ve got the freedom to do whatever you want, whenever you want. It’s important to set your face in the direction that you’re headed and keep your eyes on the prize that one day you’ll reach.
Think of yourself, if you remember nothing else, as your own financial dependent. The only one who’s going to provide for you is you, which means you’ll only have yourself to thank, or to blame, for the outcome of your financial life.
Yes, stuff might happen to you – external things do happen. You can plan for those things, but it’s you that needs to do the planning and the executing to put the plans into place. This is the framework I want you to use – the three points above will help you to plan and prepare properly.
In the next post, we’ll start looking at what steps to take to help you reach financial stability.