If you guys have been rocking with me for a while, you probably know that I’m a single guy (wife, where you at?). So, I’ve learned a thing or two over the years about managing your money as a single person. And just like anything in life, there are pros and cons to that—you have complete freedom to decide when and how to spend your hard-earned cash, but you also don’t have that built-in accountability partner who helps you rein in out-of-control spending. That’s why I’ve got your back with eight money tips for singles that will help you manage your money like a boss.
Money Tips for Singles
As a single, it’s awesome to be the only one in charge of where your money goes. But what about when it comes to those big financial goals? How do you save for retirement, buy a house, or even pay off your debt without that sweet second income? Here’s how you can handle your money (and those big decisions) with confidence:
1. Get on a budget.
Single, dating, married—no matter what your status is, you need to have a monthly budget. I will preach this for the rest of my life, you guys. It’s that important.
Start budgeting with EveryDollar today!
Okay, so you’ve heard of a budget, but have you heard of a zero-based budget? There are all different kinds of budgeting techniques out there, but this is only one you need. Ready for the super complicated equation you need to know in order to make your zero-based budget?
Income minus expenses equals zero. That’s it. That’s the tweet.
With a zero-based budget, you give every single dollar a job to do, and you get to be in control of your money instead of the other way around.
You can keep your budgeting game going strong by downloading a budgeting app like EveryDollar. Using an app makes things super easy because it allows you to track all your transactions and does all the math for you (praise hands). After a few months of working out the kinks in your budget, you’ll feel like you’ve gotten a raise! And not only that, but you’ll be working toward your financial goals like the kick-butt money-manager you are.
2. Find an accountability partner.
You might be thinking, An accountability partner is only for people who need help. I’ve got this. And you do have this. But let’s face it—we all need help sometimes. So, if you’re single and having some trouble saying no to your fifth happy hour this week, get an accountability partner. Not only will they help you say no to spending money you haven’t budgeted (or don’t have at all), but they can be the excuse you need when your friends come calling. Here’s a helpful phrase: “It’s not in the budget.”
You don’t need to be married to have an accountability partner. Ask a trusted friend, neighbor, family member or coworker to help keep you on track. Let them in on your goals, your dreams and even your monthly budget. But remember: You’ve got to be honest about the areas you need to grow in. The more you let them in, the more they can help you get to where you want to be.
3. Get out of debt.
Debt sucks. Not only does it steal from your future, but it also keeps you stuck in your past. And since we’re on the subject, let me just say this right now: There’s no such thing as “good debt.” Don’t believe anyone who says that student loans are an investment in your future or that you need to build a credit score to accomplish your goals. The FICO score is an “I love debt score,” and your credit card company is actually banking on the fact that you’re probably not going to cash in those rewards you’ve been collecting anytime soon.
If you have debt right now, the best thing you can do with it is pay it off as fast as possible. Whether it’s student loans, credit cards or that monthly payment plan you signed up for so you could get those designer threads, it’s all debt, and it’s all dumb. Get it out of your life for good with something called the debt snowball method.
Here’s how it works: List your debts smallest to largest. Pay minimum payments on everything but the smallest one. Attack the smallest one like your life depends on it until you pay it off completely. Then repeat the process with the next smallest debt! Start selling anything you can (and maybe even take on an extra job) to keep paying them off until all the debt is gone. Boom.
4. Set goals and make them happen.
Now that you’re working on your budget (and your debt snowball), it’s time to dream big and set some goals.
So, you have to ask yourself: If you could do anything—and money wasn’t an object—what would you do? Would you change careers? Would you start a business? Would you travel? Would you go back to school? The options are endless. And they’re not just going to happen on their own.
You need to set specific, measurable, time-sensitive goals and put them in writing. When you write them down and keep them somewhere you can see them, it’ll be easier to stay motivated.
5. Make sure you have insurance.
Insurance is one of those things that can be easy to forget about. It might seem like an annoying extra expense, but it’s like a life jacket—if anything were to go wrong, you’d be really glad you had it. The main types of insurance you should have right now are:
- Car insurance: This one’s a no-brainer.
- Renter’s insurance : If you’re renting where you live, this is a must. It’ll save you the cost of replacing all your stuff if it were to get stolen or lost in a fire.
- Health insurance: Pick the coverage option that makes the most sense for you, but don’t go without it!
- Life insurance: This one’s especially important if you’re a single parent—but even if you’re not and you’re worried there would be a financial burden on your other family members if you weren’t here, think about getting a term life insurance policy.
If you need help figuring out exactly what types of insurance coverage you need, check out this 5-Minute Coverage Checkup!
6. Save for retirement.
The best way to save for retirement (over the long haul) is by investing. And if you’ve attacked your debt and you’re ready to put your money to work, it’s time to start stacking that cash for the future. When you’re out of debt and have three to six months of expenses saved in your fully funded emergency fund, put 15% of your total income in a good growth stock mutual fund.
The average amount of time that millionaires spend working, saving and investing before hitting the million-dollar mark is 28 years. In The National Study of Millionaires, we discovered that eight out of 10 millionaires invested in their company’s 401(k). So get started as soon as you can! You can also open up a Roth IRA if your company doesn’t offer a 401(k) with a match.
7. Work that side hustle.
Have you been thinking about turning that hobby into a business? What better time than right now? You’re not tied down! That means you have the freedom to create your own schedule and work until the sun comes up if you want to.
Now’s the perfect time to get your side gig off the ground. And who says you can’t make serious money pet sitting, taking photos, or tutoring online? No one—because you can.
By working a few extra hours every week on top of your full-time job, you can stockpile the cash to pay off debt, pad out your emergency fund, or even save for bigger things like your dream house or car. So, what are you waiting for? Get after it!
8. Learn how to manage your money—the right way.
Here’s one last piece of advice: If you’re out on a date and they tell you how much they love their credit card reward points or how they’re glad they took out student loans, do not agree to a second date. Learn the truth about how money works now so it’ll be even easier to narrow down your options.
The more you know about managing your money the right way, the better off you’ll be—no matter what stage of life you’re in. And trust me, when you’re out there stacking cash and crushing all your goals, it doesn’t matter if there’s a ring on your finger or not.
For more tips, strategies and accountability when it comes to staying in control of your money, check out Financial Peace University (FPU). This course will teach you how to save for emergencies, pay off debt, and build lasting wealth. It's basically the finance class you should've had in high school—and a lot more helpful, we promise.
Ready to take control of your money? Start FPU today!