Who ever said flying solo is a bad thing? No one—well, maybe your grandma (bless her heart). Just like anything in life, there are pros and cons. When it comes to managing your money as a single person, you have complete freedom to decide when and how to spend your hard-earned dollars. But you also don’t have that built-in accountability partner who helps you rein in out-of-control spending. That’s why we’ve come up with seven money tips for singles that will help you manage your money with confidence.
The Pros and Cons of Money Management for Singles
So, when it comes to your finances, does your marital status really even matter? Let’s take a look at both the positives and the negatives.
PRO: No Money Fights
Money fights are a struggle for almost 50% of couples that have over $50,000 in consumer debt.1 Just think about that for a second: You don’t even have to worry money fights! You get to be 100% in control of your money. And the only person you should be fighting with now is . . . yourself.
Start budgeting with a free trial of Ramsey+ today!
You get to be in complete control of your income. You have total freedom to tell your money what to do (and when to do it). Not to mention, budgeting is a whole lot easier when you’re trying to decide where each dollar should go without having to consult someone else.
CON: No Built-In Accountability
On the other hand, being single means you don’t have built-in accountability. And when you’re making decisions on your own, it can be hard to keep your money goals front and center. You might even find yourself asking the question, “What’s the point if it’s just me?”
It might be easier for you to justify overspending or getting too relaxed with sticking to your budget—if you’re even budgeting at all. And that just makes it all too easy to make poor financial decisions—repeatedly.
PRO: No Financial Baggage (but Your Own)
Have you ever heard the saying, “You’ve made your bed, now you have to lie in it”? The same goes for those decisions you made with money in college. Did you rack up $50,000 in student loan debt? Or did you decide to put an entire college spring break trip to Mexico on a credit card?
Flying solo means you don’t have to wade through someone else’s dumb money mistakes. You don’t have to say “I do” to spending your present and future paying for a spouse’s past.
CON: No Second Income
If you’re working on reaching those big money goals, like buying a house or retiring early, it might take just a bit longer. Without a second income, you might feel like you’re crawling instead of running toward your dreams.
Money Tips for Singles
Being single isn’t a punishment. In reality, there are many perks to chasing your goals and dreams as a single person. 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 nice second income? Check out these tips that will help you manage your money (and those big decisions) with confidence:
1. Get on a budget.
If you’ve ever been around here before, you may have heard us talk about the importance of a budget. (And we’re going to keep talking about it until the cows come home—it’s that important.)
Sure, you’ve probably heard how important a budget is, but have you heard of a zero-based budget? Let us introduce you: A zero-based budget puts you back in the driver’s seat of your money. It’s income minus expenses equals zero. That’s right, there’s no need to keep padding that checking account “just in case.” That’s like putting miscellaneous stuff in a box and throwing it in the basement, never to be thought of again. What’s the point of that? Nope, with a zero-based budget, you give every single dollar a job to do. You get to be in control.
After a few months of working out the kinks, you’ll feel like you’ve gotten a raise! And not only that but you’ll be working toward your goals and handling your finances like the kick-butt money-managing champion you are.
2. Find an accountability partner.
We know what you’re thinking: An accountability partner is only for people that need help. But let’s face it—we all need help sometimes. So, if you’re single and have a little trouble saying no to going out with your friends for a fifth time 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 in the wins and the areas you need to grow. The more you let them in, the more they can help you get to where you want to go.
3. Get out of debt.
Debt sucks. Not only does it steal from your future but it keeps you stuck in your past. And since we’re on the subject, there’s no such thing as “good debt.” 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.
The best thing you can do with debt is attack it with everything you have until the red turns to green. Whether it’s student loans, credit cards or that monthly payment plan you signed up for to pay for those expensive jeans, it’s all debt and it’s all dumb. Get it out of your life as fast as you can with something we like to call the debt snowball method.
List your debts smallest to largest. Pay minimum payments on everything but the little one. Attack the little one with a vengeance and then start selling so much stuff the dog thinks it’s next. Take care of that debt before it takes care of you.
4. Set goals and make them happen.
Now that you’re working on your budget (and working on your debt snowball), it’s time to dream big and set goals to get there.
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. As Dave Ramsey always says, “On paper, on purpose.”
5. 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 investing. When you’re ready, 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. Remind you of something? (Ahem—the tortoise and the hare.) Psst: Eight out of 10 millionaires from The National Study of Millionaires invested in their company 401(k).2
It’s that important.
6. Work that side hustle.
Have you been dreaming of making that hobby of yours 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 bust it at your day job and hustle to get your side gig off the ground. And who says you can’t make serious money baking cookies, taking newborn photos, or teaching elementary students how to play the drums? No one—because you can.
By working a few extra hours every week, you can stockpile the cash to pay off debt, fully fund your emergency fund, or even save for bigger things like a house or car! So what are you waiting for? Get after it!
7. Learn how to manage your money—the right way.
There’s a lot of conflicting financial advice out there. So how are you ever supposed to separate the truth from the trash? Here’s a piece of advice: If someone tells you to go further into debt, take out more loans, or bow down to the almighty FICO . . . run—and fast.
Listen: 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 us, when you’re reaching your goals left and right, marital status won’t matter.
If you’re looking for accountability, commonsense financial wisdom and a plan to make it all happen, check out Financial Peace University. Try it out free for two weeks and start managing your money—with confidence.