A growing number of Americans are choosing to remain single, foregoing romantic relationships and marriage, in favor of independence. More than half of adult Americans are currently single, compared to only 22% in 1950. Single individuals have unique benefits and challenges when it comes to planning for their financial future. This article discusses these benefits and challenges, as well as offers strategies to ensure financial security for single individuals.
One of the benefits of financial planning as a single person is the lack of financial conflicts and disputes that commonly arise in relationships. Single individuals have the freedom to make decisions about their finances without having to accommodate someone else’s views or priorities. This flexibility allows them to set and adjust their goals according to their own needs and preferences.
However, single individuals also face unique challenges when it comes to financial planning. Housing costs can be a significant hurdle for single people, especially if they want to live alone. Budgeting for housing on a single income can be difficult, as single individuals are solely responsible for all related expenses. It is important for single individuals to stick to key rules of thumb, such as ensuring that housing expenses do not exceed 28% of their gross monthly income.
Extended joblessness is another challenge that can disrupt financial planning for single individuals. Keeping enough cash reserves to cover at least six months’ worth of expenses is essential to weather a period of long-term unemployment. Additionally, having the right insurance coverage, such as long-term disability and long-term care coverage, can protect single individuals from financial strain in the event of unexpected health problems.
In conclusion, single individuals have greater control over their financial picture and more flexibility than their married counterparts. While there are external factors that can cause financial strain for single individuals, such as housing costs, employment gaps, and healthcare expenses, these risks can be mitigated through proper budgeting, emergency reserves, and insurance coverage. It is important for single individuals to seek personalized advice from tax and financial professionals to ensure their unique needs and circumstances are addressed.
