If you are single you probably have different financial needs from some of your peers. Here are 5 things to consider in planning your financial future as a single person:
1) Build A Larger Emergency Fund
In a financial crisis, singles may be more likely to pull money out of retirement, without another household income to rely on. I have seen my single clients benefit from having a larger emergency fund (standard is somewhere between 3 and 6 months non-discretionary household expenses). A larger emergency fund, (coming in closer to the 6 months rather than 3) can help mitigate unexpected financial hardship without putting retirement savings at risk.
2) Get Long-Term Care Insurance
Long-term care insurance is a good idea for everyone to consider but even more so if you are single. Approximately 70% of adults 65 years and older will need long term care at some point. Singles may not have someone living in their home to help take care of them when they experience health challenges. This can be even more important for women, who tend to live longer.
Getting long-term care insurance while you are between ages 50 to 60 will keep premiums lower and make it less likely a health condition will be excluded as pre-existing. Long-term care insurance can also reduce anxiety and provide much needed peace of mind.
3) Focus On Your Journey And Not Others
Comparison is the killer of joy. Sometimes, a less conventional life can come with being single. You may make different choices or spend your time differently than your coupled-up peers. Maybe you decided not to buy a home because you prefer the flexibility and lower home maintenance responsibilities of renting.
Perhaps you spend more on travel than some of your friends. Maybe you are a single parent, and you have more financial responsibilities than your peers with partners, and a leaner budget as a result.
Whatever your situation, know that your choices and your financial life don’t need to look like anyone else’s to be valid. It can be courageous to make choices based on your values and desires, rather than to keep up appearances.
4) Estate Planning
Lots of stuff goes into estate planning. To name a few: a will, power of attorney, health care proxy, and assigning a guardian for your dependents (this includes pets too!). Estate planning can be overwhelming, and it can be hard to navigate getting everything you need together. If you are interested in hands-on step by step help, check out my good friend and colleague Marni Blank’s services here. She helped me get a living will and health care proxy in place. It felt really good to have it done.
5) Support System
Who would you call if you needed someone to lean on? Try to get clear on who your people are. See if you can establish a few close friends or family who would do things like walk your dog for a week if you had an emergency, or help out if you were recovering from surgery.
Create your own, perhaps less conventional support team.
If you would like hands-on personal guidance book a free consultation with me. I would love to help.
Wishing you healing and success on your financial wellness journey.
