Financial Planning When You’re Flying Solo
These days, fewer young people are getting married than ever before, but being single doesn’t mean you have to put off important financial milestones. While more challenging overall, making the right decisions early on can still empower you to achieve all the same things that couples do on your own.
The most important thing to know about financial planning when you’re single is that, because it’s just you, there’s inherently more risk if something goes wrong. If you lose your job, for example, there’s no second income to help keep things afloat while you look for a new income.
If you understand that risk up front and take it into account in your financial planning, you’ll set yourself up for a much better chance of success down the road. And if you plan on staying single long-term, you’ll need to approach certain life milestones a bit differently than those who are married.
Buying A House
The nice part about buying a home when you’re single is that you don’t have to make any compromises with your partner. You can buy exactly the home you want.
On the downside, saving for a downpayment on your own (depending on your level of income) can be more difficult than when two are saving together. You’ll also need to be very confident you can afford the expenses that come with homeownership–mortgage, property taxes, repairs, etc.–on just your income.
You’ll also have to qualify for a mortgage based on just your income and credit score. So make sure your credit score is top notch to be eligible for the best loan terms.
Starting a family, whether you’re doing it with a partner or by yourself, is a huge step, both emotionally and financially.
Aside from just the basic (yet still considerable) day-to-day costs of raising a child, you should also have several other financial security nets in place. For example:
- An emergency fund
- Disability insurance
- Life insurance
- An estate plan
If something happens to you as a single parent, and you don’t have the right resources in place, things can go downhill very quickly.
If you plan on staying single through retirement, you’ll need to take that into account as well. The good news is that while you’ll only have your income to save with, once retired you’ll only have your expenses to pay.
The sooner you start saving for retirement, the better. Make sure you take advantage of any employer-sponsored retirement plans–like a 401(k)–and maximize your contributions every year if possible.
If you do end up single and retired, you’ll want to have money set aside for long-term care. Because you won’t have a partner there to help you, you’ll almost certainly need to hire professional help at some point.
Free Financial Planning Consultation
Would you like to speak with a financial planner about your specific needs? If so, we'd love to hear from you! You can book a free phone consultation with us right now by clicking "Schedule An Appointment".
Once you've picked an available day and time, and provided your contact information, your appointment will be booked. If you have any questions, or need to change your appointment, please call us at (707) 595-8702. We look forward to speaking with you.
Choose a day and time
Provide your contact info
Get professional advice