This post is by our new contributor, Catherine, who writes about personal finance at thesingledollar.com. Catherine is a 30-something single woman living in the Midwest; she likes hiking, cooking, volunteering, and frugality.
Women’s Money Week — now that’s a topic that’s near and dear to my heart.
On my own blog, I write extensively about my financial life as a single woman. It’s not necessarily better or worse than being part of a couple, but there are definitely both pitfalls and bonuses to look out for.
In this post I’m going to write about why single women should be especially attuned to saving money, and how they can do it effectively.
First things first:
Know Your Financial Situation
A lot of single women are in denial about their financial situation. It’s easy to spend your 20s figuring that eventually you’ll get married, maybe even to a guy that makes a lot of money, and all your problems will be solved. But what if that doesn’t happen?
Single women should assume they’ll stay that way, and take a cold hard look at their debt, savings accounts, income, and anything else that’s relevant to making a long term plan to improve finances.
When you know where you’re at, you can think about where you want to be.
The Big Three (Part 1)
Single women have some challenges when it comes to the big three of spending: housing, food, and transportation. These are all places where families can really save money because partners and children can share bedrooms, cook in bulk, and share a car or two. Economies of scale really help.
But there are ways for single women to save money in these areas too.
For housing, consider a small apartment, a tiny house, and either renting a room in someone else’s house or buying a house yourself and renting out a bedroom or the basement. You can live in a much smaller space if there’s only one of you!
To save on food costs, single women can follow a lot of the same tips to save on groceries as families. Cooking in batches and then freezing single portions helps a lot.
Finally, to save on transportation, try an inexpensive subcompact car (if you don’t have to fit car seats and strollers) or even ditch the car altogether and just bike or use public transportation. If you do keep a car, though, rejoice, because car insurance is one of the few areas where women usually get a lower price than men do!
The Big Three (Part 2)
The other half of the equation isn’t just saving money — it’s where you put the money that you save! There are three accounts you absolutely need to have as a single woman:
Single Ladies: You Need an Emergency Fund
I know, I know: your income is tight, especially because women on average make less than men, and you’re not sharing all your bills with a partner. It sucks to have money just sitting around in a bank account when you could be paying the rent.
But you’re walking a tightrope, and you need a net! An emergency financial plan can prepare you for when life inevitably goes sideways, and a big part of that is a robust emergency fund. Start slow, with $100 or even $25 a month, and build it up to several months of expenses.
Still having trouble? Try a cash budget for a while because that often ends up keeping spending down. If you date, think about inexpensive or free ways to go out. And consider getting a side hustle just to save up this special fund.
Down Payment Funds
Like I said above, single women still have to have housing and transportation, even if their incomes are half (or less) of a couple’s. You can cut back on these costs, but they’re still there.
In order to avoid going into excessive debt, you should build funds to replace your car, your computer, or any other big-ticket item ahead of time. That way, after you drive your cost-effective used subcompact into the ground at 300,000 miles (like I plan to!), you’ll be able to replace it using cash, and shock the socks off all your married friends.
You Gotta Think About Retirement
Women of our generation will probably spend the majority of our lives single. Women in the United States get married much later these days, and between divorce and having longer life spans than men, those who do marry will probably find themselves single again at some point.
Unlike our grandmothers who may have relied on their husband’s income for old age, we have to rely on ourselves. Putting a little away every month ensures we’ll have something to fall back on.
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All in all, being a single woman totally responsible for your own finances can be kind of scary…but it’s also empowering and exciting, if you let it be. Set yourself up for success by working to build savings accounts!
Are you a single woman? Do you find saving money to be challenging in that situation? Would you say it’s more scary or empowering?
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All of these are things I definitely wish I knew when I was single. I got married at 25 and most of my financial common sense came along shortly after. This is excellent advice for all singles.
I was single longer than I’ve been married and financially responsible for my family all of that time. It was both scary to make huge goals to ensure future financial stability and a bit exhilarating each time I achieved another one but saving was never ever scary. It was my bastion of safety! It was my way out of the financial stranglehold debt had on my life. I long wondered what it’d be like to take some risks, even take on some student loans to pursue higher education if I chose, because those were never paths worth considering while I had my family to take care of.
I’d go a step further and say that all of these things are necessary for all women to learn whether single or married because life is full of unexpected twists and you may find yourself the primary breadwinner at some point. Always make sure you’re capable and covered in case of major life change!
I work in insurance right now and you always hear stories about some widower who calls in to our call center and is devastated to find out that her husband’s policy did not offer spousal continuation or the payout that she was expecting is not enough money for her to live off of. It’s devastating. I will never let that happen to me by starting to put away money now and not being reliant on anyone else for my future income.
Nice to see I’ve been doing most of these already. Although I do splurge and live in a nice apartment by myself :)
FieryMillennial You know, if it’s important to you to live alone and you can make it work financially, that is totally ok! :) Glad you’re generally doing fine.
Millennial Boss Ooof, that’s really scary. I worry a lot about older women who are suddenly single and never thought they would be! Glad you’re putting money away for yourself.
RevAGSL I actually totally agree — married women need to learn this stuff too! Congratulations on managing your financial life so well!
lifeandabudget Oh man, I had zero financial common sense at 25 :) I’m lucky in a lot of ways to have survived to gain wisdom!
Great tips for Women’s Money Week! It’s SO important to have that emergency fund, no matter what your gender is! One of my goals though is to make sure I can always support myself. The idea of getting into a relationship, becoming financially dependent, and then having it not work out is terrifying to me.
I think it will be exciting to be a single woman who can 100% decide how to build her financial empire. I think it’s great practice to figure out what your “financial values” are and be completely selfish about your money (as in not having to think about your partner’s values). Then you can be proud to have built something all on your own!
These are fantastic advice I wish I read when I was single :)