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Flying Solo: What it means financially

Flying Solo: What it means financially

Living life as a single adult can be empowering for some, stressful for others, and a nonissue for everyone else. Single people possess freedoms, but with those freedoms can come restrictions in the form of financial vulnerabilities that married or partnered people may not have.

Although all of us would do well to start planning early for financial sustainability, the need to plan, save and invest for retirement and other dreams may be even more important for people who find themselves living on their own for the long term. A few tips for getting started —

1. Save money.

It is important to be disciplined in your approach when you recognize that all earning, saving, investing and financial strategy choices are yours. As a single person, there may be less money to put away so it’s important to make sure you are on track to meeting your goals. Your financial plan should include creating an adequate emergency fund for life’s “what ifs.” Although there is no single right number for the size of an emergency fund, experts generally recommend saving three to six months’ worth of expenses and placing those funds in an interest-earning savings account or other easily accessible account. What if you lose a job, become injured or face a financial emergency? It is best to be prepared, which leads to tip number two.

2. Review your insurance situation.

When you rely on only your income to support yourself, making sure you have adequate insurance becomes a higher priority. Do you have a disability policy? If something unexpected happens, are your home and its contents protected? Renters and homeowners policies can play a role in helping you replace personal property in the event of a disaster. If you are renting, it may be important to remember that your landlord’s property insurance most likely will not cover all of your belongings if they are damaged or lost.

3. Make sure your documents are in order.

You should have your paperwork ready in the event of an emergency. Who will make decisions for you if you are in an accident? It may make sense to ask a parent, sibling or friend to step in as a decision-maker during a crisis so that someone holds your medical and/or financial power of attorney. Everyone has a different family dynamic, so creating a will can ensure your financial assets, physical assets, property or even pets are bequeathed according to your preferences. Even if you prefer not to leave your assets to relatives or friends, you can leave them to a nonprofit, college or other organization — and a will is the vehicle for that designation.

4. Talk with experts.

Speaking with experienced professionals is good practice, single or not. An estate attorney can help make sure your affairs are in place and a financial advisor can help you feel secure in your finances. And feeling financially secure is a pretty good place to be.

Flying solo: taking care of oneself is always the best recipe.


Information contained herein has been obtained by sources we consider reliable, but is not guaranteed, and we are not soliciting any action based upon it. Any opinions expressed are those of the author and based on interpretation of data available at the time of original publication of this article. These opinions are subject to change at any time without notice. Investors should consult their financial and/or tax advisor before implementing any investment plan.

Categories

Wealth Planning, Lifestyle

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