There are several pros and cons associated with saving money as a single individual. While being single enables you to decide exactly how you want to spend your cash, you also don’t have a partner who helps you when it comes to out-of-control spending. Being single is awesome from a financial perspective because you’re the only one who is in charge of how you spend your money. But what about those big financial goals such as retirement? A house? Or paying off debt? Here are several tips to consider if you want to save money as a single person.
1) Establish A Budget
Regardless if you’re single or married, you need to establish a budget so that you can save money. This is the first basic step towards saving your money. By establishing and sticking to a budget, it will allow you to have more money to save. With the advancement of smartphone technology, budgeting has never been easier because like with most tasks in life, there’s an App for that.
Budgeting apps such as Every Dollar can make budgeting easier, because it helps you to track your transactions, as well as to do the calculations for you. After working with a budgeting app for several months, it will eventually feel like you got a raise. But the fact of the matter is, being able to see where your money is going, will lead to wiser financial choices.
2) Get An Accountability Partner
As mentioned, when you are in a relationship, you get held accountable for spendthrift ways. As such, if you’re single and you have a hard time saving money, maybe you should consider getting an accountability partner. An accountability partner doesn’t entail getting married. It means that you should communicate with someone who can help you to stay within the limits of your budget, such as a friend or family member.
3) Take Care Of Your Debts
In a way, debt is essentially stealing from your future and can keep you stagnant in the past. Oftentimes we are told to get multiple credit cards to build our credit score score. However, if you lost control over your credit card purchases, and are not paying your bills on time, it’s time to take a step back. If you don’t pay your bill when it’s due you will have to pay interest on top of late payment fees. Over time, you may end up paying more in interest and fees than the loan itself! When it’s all said and done, the sooner you pay off your debts, the more money you will have in the long run. Putting them off will just lead to more interest and more payments. Ideally, you should tackle your smallest debt, before moving on to large debts. In addition to that, try to meet the minimum payment threshold of all your large debts.
4) Get Insurance
Another ingenious way you can save money, in the long run, is to get insurance in multiple areas of your life. It may seem counterproductive from a personal finance standpoint at first glance. But the reality is that accidents happen when we do not expect them. No one expects to get a disease or get injured and subsequently owe the hospital hundreds of thousands in expenses. No one assumes that if they get in an accident, they will be the one who is liable to pay damages. Therefore, ensure that you get an adequate amount of insurance for multiple areas of your life, such as life insurance, renters insurance, car insurance, homeowners insurance, and health insurance.
5) Think About Retirement
When it comes to saving for retirement, the best way you can do this is to partake in a long term investment option. Once you have tackled your debts, it’s time to start saving that money. A good rule of thumb to go by is to save up at least 3 – 6 months to cover your monthly expenses. Then, going forward, you should put at least 15% of your income into a growth stock mutual fund.
6) Set Financial Goals
One of the most effective ways you can save is to write down your financial goals. One of the most common mistakes people make is creating abstract, subjective wishes and giving up quickly. Ideally, it would be best to write down specific, time-sensitive goals, such as getting a car in X amount of months or years. When you write your goals down, it helps you to save money.