There’s something powerful about being financially independent.
Your money. Your decisions. Your priorities. Your future.
But when you’re single, there’s another reality that deserves attention:
There may not be a second income waiting in the wings if something goes wrong.
If you lose your job, get sick, need a new roof, want to buy a home or eventually retire, you’re likely making those financial decisions primarily with your own resources.
That isn’t a reason to panic.
It’s a reason to plan.
Financial confidence doesn’t come from having a perfect portfolio or knowing everything about investing. It comes from knowing where you stand, protecting yourself against the big risks and making intentional decisions about where you want to go.
Here are seven places to start.
1. Know What It Costs to Be You
Before worrying about investments, retirement projections or whether you should buy real estate, know one fundamental number:
How much does your life cost?
Think about housing, utilities, food, transportation, insurance, debt payments, subscriptions, travel, fitness, clothes, entertainment, the dog and, yes, the $8 coffee you have absolutely no intention of giving up.
All of it.
This isn’t about creating a joyless budget that eliminates everything fun. It’s about knowing how much money comes in, how much goes out, what’s fixed, what’s flexible and where you may be spending more than you realized.
It’s also about figuring out which expenses genuinely make your life better.
A budget isn’t supposed to tell you that you can’t have what you want.
It’s supposed to help you decide what you want most.
2. Build Your Own Safety Net
An emergency fund matters for everyone.
When you’re financially responsible for yourself, it can matter even more.
Think of it as freedom money.
It’s the money that lets you handle an unexpected car repair without putting the entire bill on a credit card. It can give you room to leave a terrible job without immediately accepting another terrible job, manage a medical expense, replace the HVAC system or cover your bills while looking for work.
How much you need depends on your expenses, job stability, insurance, debt, family responsibilities and other resources.
The important part is starting.
If a large emergency-fund goal feels impossible, build the first $500. Then $1,000. Then work toward one month of essential expenses and keep going from there.
You don’t have to create your entire financial safety net this month.
You do need to begin weaving it.
3. Protect Your Most Valuable Asset: Your Income
Your biggest financial asset may not be your house or investment account.
It may be your ability to earn money for the next 20, 30 or 40 years.
So ask the uncomfortable question: What happens if illness or injury prevents you from working?
Review the disability coverage provided by your employer, if you have it. Understand what percentage of your income it replaces, how long benefits may last and what limitations apply.
If you’re self-employed or your workplace coverage doesn’t adequately meet your needs, consider discussing additional coverage with a qualified insurance professional.
It’s also worth periodically reviewing your health, life and other insurance needs rather than assuming choices you made five years ago still fit your life today.
Being independent doesn’t mean assuming nothing bad will happen.
It means having a plan if something does.
4. Make Retirement a Bill You Pay Yourself
Retirement can feel wonderfully far away.
Until suddenly it doesn’t.
The advantage of beginning early isn’t that you need to know exactly what retirement will look like.
It’s time.
Even relatively modest amounts invested consistently have more time to potentially grow when you begin earlier.
If your employer offers a retirement plan and a match, understand how it works and what you need to contribute to receive the full match available to you. Then consider increasing your savings over time as your income allows.
Retirement contribution limits change periodically, so check current IRS rules when deciding how much you’re eligible to contribute to workplace retirement plans or IRAs.
You don’t have to contribute the maximum for saving to be worthwhile.
Start where you can. Increase it when you get a raise. Automate contributions when possible so you’re not making the decision every month.
And if you’re already further along in your career, don’t assume you’ve missed your opportunity. Learn whether catch-up contributions or other retirement-saving strategies may apply to you.
Future You is still you. Pay her, too.
5. Don’t Wait for a Partner to Build the Life You Want
This one matters.
Don’t postpone your financial life until your relationship status changes.
Want to buy a home? Explore whether it makes financial and lifestyle sense for you.
Want to travel? Build it into your financial plan.
Want to start a business? Create the runway.
Want to go back to school? Research what the investment could mean for your career and finances.
Want to retire somewhere fabulous? Start figuring out what fabulous costs.
A house isn’t automatically a good investment simply because you’re single, married or “at that age.” And renting isn’t automatically throwing money away.
Make major decisions based on your finances, goals, lifestyle and the flexibility you want.
You don’t need to wait for another person’s financial plan to begin building your own.
6. Build a Financial Team
Being independent doesn’t mean doing everything alone.
In fact, one of the smartest things you can do is know when you need expertise.
Depending on your circumstances, your financial team might include a financial planner or advisor, CPA, estate-planning attorney or insurance professional.
You don’t necessarily need all of them.
You do need to understand who is advising you, how that person is compensated, what services you’re receiving and whether the advice actually fits your goals.
Ask questions.
Lots of them.
If someone makes you feel embarrassed because you don’t understand something, find someone else.
Your financial life is too important to nod politely through a conversation you don’t understand.
A good advisor should help you become more informed, not more dependent.
7. Make Sure Someone Knows What to Do If You Can’t
Financial independence also requires planning for circumstances we’d rather not think about.
If you were seriously ill or incapacitated tomorrow, who could step in? Would someone know where your important financial information is? Who could make medical decisions? Who could manage financial matters if necessary? What happens to your assets when you die?
Review beneficiary designations on retirement accounts, insurance policies and other relevant accounts. Consider whether a will, financial power of attorney, advance healthcare directive or other estate-planning documents make sense based on your circumstances and state law.
And make sure one trusted person knows where to find the important information.
Being single doesn’t mean these decisions matter less.
It can mean deciding them intentionally matters even more.
Financial Confidence Isn’t a Number
You don’t become financially confident the day your investment account reaches some magical balance.
It happens gradually.
You know what you spend. You have money set aside. You understand your benefits. You’re saving for retirement. You know what you owe. You’re making choices instead of avoiding them.
And when you don’t understand something, you ask.
You don’t have to have everything figured out. You simply need to know more about your financial life today than you did yesterday and keep going.
Because ultimately, financial planning isn’t really about money.
It’s about choices.
The ability to leave. Stay. Buy. Wait. Travel. Change careers. Help someone you love. Retire.
Say yes.
Say no.
That’s what you’re building.
Pink POV
Being single doesn’t mean you’re waiting for your financial life to begin.
Please don’t postpone the house, the investment account, the trip, the business, the retirement plan or the life because you imagine you’ll make those decisions differently when someone else arrives.
Build for the woman you are now.
Save for her. Protect her income. Invest in her future.
Spend some money making her life wonderful today, too.
And if someone eventually joins you?
Great.
You’re not looking for someone to complete your financial plan. You’re deciding whether there’s room for him in the fabulous one you’ve already built.
