I’m not single, but I get a lot of questions from single folks about how to manage money. This is partially due to the fact that everything is getting more expensive! And we live in a world that is designed for couples. It can be really challenging to manage money as a household of one, so the following are money tips for single people.
By the way, for the purposes of this post, I am defining “single people” as being someone who is romantically single or as someone who lives alone and bares the financial responsibilities of your household by yourself. Maybe you have like a six-year-old living with you. So, you’re not living totally alone, but that six-year-old isn’t paying rent!
The Financial Challenges of Being Single
Single people have a huge challenge in wealthy nations like the United States. You have to manage the task of running your household, doing the laundry, the cooking, paying the bills while balancing working potentially 40 or more hours a week and maybe even seeking a romantic partner. Sprinkle in on top of that a little fear of recession, constant rising cost of living and it’s a lot! There’s very little support for single people in the way that our world currently runs. This is really interesting because more people are single than ever before in rich countries in the global north.
As of 2021, 37 million Americans live alone, which is about 15% of adults. 28% of US household have one person, back in 1960, that was just 13%. According to Pew’s most recent survey data, 47% of Black adults are single. Compared to 28% of white adults and 27% of Hispanic adults. 47% of adults who identify as gay, lesbian or bisexual are single, compared to 29% of straight adults. There are also 11 million US households that are headed by a single parent. That means not only doing the job of keeping yourself alive and healthy, but also keeping one or more children that live with you alive and healthy.
The expectation to get married is part of our culture
Here in the United States, everything about our culture pushes you to find a romantic partner and to marry. Weddings are commonly referred to as the happiest and most important day of your life. People routinely spend a year or more planning their wedding and spend upwards of $30,000 on them. Your romantic life is completely acceptable small talk. Saying things like “Keep looking, you’ll find someone,” is totally normal to say. In the United States, it’s an assumption that you want a partner and that you are not complete until you find them and marry them.
Financial Laws that Benefit Married People
We also see this bias towards married couples is reflected in our financial laws. Married partners are often eligible for their partner’s workplace healthcare plan while unmarried partnered people are not. There are multiple tax breaks for married people. If you have substantially different incomes, for example 50K versus 100K, joint filing can actually pull the higher-earning spouse into a lower tax bracket. This means you pay fewer taxes and you may both qualify for additional credits and itemized deductions.
Once married, you’ll also have access to a larger, charitable contribution deduction. Also, if one spouse has a job and one doesn’t, the latter can still contribute to an IRA with joint income. By law, a surviving spouse is automatically the beneficiary of their spouses 401(k), thanks to the Employment Retirement Income Act of 1974.
Social Security Benefits for Married People
Married couples also have the option of choosing 100% of your individual Social Security or 50% of your spouse’s Social Security. So if you’re in a couple with a really big earnings gap, you could be entitled to way more Social Security simply because you’re married. Married couples are also automatically entitled to their partner’s Social Security benefits if their partner passes. This is not true of unmarried couples. We’re talking 100% of your deceased partner’s Social Security benefits.
If your partnered but unmarried, even if you’re common-law married, which, by the way, only 10 states and Washington DC even recognize, you have to provide proof to the Social Security administration in order to get your partner’s benefits. When you apply for benefits, you need to present an official statement affirming your marriage, and a statement from a blood relative of each spouse. When one partner has passed away, the Social Security administration wants a statement from the surviving spouse, plus statements from two blood relatives of the deceased and a blood relative of the surviving spouse. You may also have to provide evidence such as bank statements, insurance, policies, or mortgage/rent receipts. To say that we live in a society that caters to married people is actually quite the understatement.
Managing Money as a Single Person is the Hardest it’s Ever Been
Managing money right now as a single person is arguably the hardest it has ever been in the history of the United States. I think the biggest challenge right now is rising cost of living. Absolutely everything has gotten way, way, way more expensive in the last couple of years. Obviously rent and mortgages have gotten more expensive, but groceries, getting your oil changed, even just component parts of things have gotten way more expensive.
Over the 12 months ended June 2022, the consumer price index for all urban consumers increased 9.1%. Between 2020 and 2022, prices for all items on average surged by 12.45% according to the US Bureau of Labor Statistics. I shutter when I think about trying to afford my current life myself without T-Bone to split the bills. We don’t share all expenses. For example, I pay for our Internet bill 100% by myself, but we share rent. We share things like when we go out to eat, we split the bill 50-50. That’s a huge perk that I have that single people don’t have.
This is especially scary because according to the St. Louis Federal Reserve, real median personal income in the United States is only $37,522. $37,522 to survive off of! That’s really hard.
Here are some tips for the single folks out there:
Money Tip 1 for Single People: Live in a Smaller Place
The average American household has gotten so large and it’s only getting bigger. As Americans, we are obsessed with having individual homes be giant mansions. If you can live in a smaller place, you will save more money. Smaller places generally cost less and they also cost less to maintain. I’m talking about lower electric bills, lower gas bills and less to clean. Less is definitely more when it comes to your living space.
Money Tip 2 for Single People: Habit Stack
Habit stacking is when you have something that you already do every day, like making your coffee and then you add another habit it on top of that. You’re piggybacking off of the routine you’re already used to and establishing a new routine. For example, while your coffee is brewing, you could empty the dishwasher because you’re already in the kitchen. This is a chance for you to get a two birds one stone situation going on. While you take advantage of the free time that you have while you’re doing one thing, you can get another thing done. Putting two routines together like this can really help reduce the mental strain that comes with being single.
Money Tip 3 for Single People: Build Community for Support
It’s something that I say often on here, but we need each other. We need community. We are better together. This is especially true for single people. Some of us can pay for extra things but if you can’t, you’re going to need community to help you. So invest time and money into your community. Go to community meet ups. Be a regular on the volunteer scene. Hang out with your friends that are couples or that have kids and become a part of their life. You might want to share a Netflix password, split a CSA with someone, incorporate yourself into other peoples lives. Just because you don’t have a romantic partner doesn’t mean that you can’t have a life full of people. Reject that late stage capitalism idea that you have to do everything on your own.
Money Tip 4 for Single People: Invest in Kitchen Tools
Invest in quality kitchen tools like crockpots and other tools that make feeding yourself easier. Tools that you will use consistently are worth the money. These tools are important when you’re the only one doing the grocery shopping, the cooking and the cleaning. Anything that is going to make that process simpler and easier is definitely worth the money.
Money Tip 5 for Single People: Automate Investing and Start Early
If you’re a life-long single person, that means that you are responsible for your own retirement and for your own healthcare in old age. The good thing about being single in old age is you’ll probably need less money. But if you’re the only one saving for your retirement that means 87-year-old you’s money problems is 28-year-old you’s money problems. Your 28-year-old self needs to do the saving so 87-year-old you can do the spending.
We have an Investing 101 class here, so check it out. It’s a $27 one time purchase that you keep forever, so you can come back and watch it over and over again. It also comes with two PDF guides. One of the guides is the three most common investing questions I get and the other one is a step-by-step guide to opening an IRA. An IRA is the account that I would suggest you start with.
Open an IRA and see if you can put $100 a month in every single month in a sustainable index fund. Let that money compound for you. Increase the amount overtime as you get raises, pay off debt, as you get bonuses.
Money Tip 6 for Single People: Outsource What Allows You More Time
If hiring a housecleaner for 150 bucks a week buys you back five hours of your time, you can then put that into taking a course, so that you can earn more money. That is a good use of $150! There’s also absolutely no shade in spending money just to buy you back free time. Part of the lie that late stage capitalism tells us is that you always need to be productive. I really do not subscribe to that! If you want to hire a housekeeper while you go lie in your backyard, I support that.
If you’re having a hard time with outsourcing, first prioritize your time. Sit down and write down everything that you need to get done. These are things that you can’t have anyone else do. For example, you can’t outsource your exercise. Next, identify what an hour of your free time is it worth to you in a dollar amount. And highlight what someone else can do. Can you get groceries delivered? Can someone from TaskRabbit hang your pictures? After that, compare the price of those services to what your free time is worth to you. Lastly, outsource everything that is less than your hourly life rate. Anything under that is worth spending on, anything over that, save the money by doing it yourself.
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