Single Women’s Guide to Financial Wellbeing
If you’re a single woman today, you’re in good company: The number of single adults in the U.S. continues to increase—from 39 percent in 2007 to 42 percent in 2017, reports the Pew Research Center. The rise shows no signs of abating. Many people are choosing to wait until later to get married, if at all. Although there is freedom in spending your money as you wish, as a single woman you might be slightly apprehensive about your financial future. A study by MassMutual finds that indeed women are more anxious about their current and future financial status than men—more apt to worry about household finances now and less confident in their eventual retirement security. But the good news is that there are several doable steps that single women can take to feel financially confident.
SIX Ways Single Women Can Watch Out for Their Own Financial Wellbeing:
Have a Plan for Retirement Savings
Most couples find it easier to save because they have two incomes coming in—and they are sharing costs such as housing expenses, which can make it easier to allocate more for savings. However, single women need to approach their savings goals as aggressively, and it seems they aren’t. The MassMutual study found that women were three times more likely than men to say that they couldn’t afford to contribute to their retirement savings plan. But, that can be catastrophic because you will potentially not have someone to share bills with now or in the future. In fact, it turns out that women need to save more for retirement in the first place—simply because they are more likely to outlive men. The Centers for Disease Control and Prevention finds that women tend to live about five years longer than men.
Boost Your Financial Literacy
A survey for Merrill Lynch found that half of women lacked confidence in managing their investments—a gap of 16 percent between women and men—even though they reported feeling nearly equally capable as men in other financial tasks, including budgeting and paying bills. In fact, 61 percent of women would rather talk about their own death than money, the study reports. But learning about investing is not only necessary—it can be fun and fascinating.
Vow to sit down with a financial advisor. Discuss vehicles that might be right for you, from IRAs to mutual funds. Ask your human resources department if they offer any financial education; it’s quite likely they do as it’s a growing benefit—today 83 percent of employers offer a financial wellness program, up from only 20 percent in 2015, finds a study by the Society for Human Resource Management (SHRM).
Regularly Contribute to Your Emergency Fund
Planning for an emergency is wise. As we know, taking a loan or putting an unexpected expense on your credit card can just extend the pain in the form of interest rate payments. If you are single, you might need a more ample emergency fund than your married counterparts. In fact, a recent article in Kiplinger says that some financial planners recommend single women, specifically, keep between nine and 12 months of living expenses available, compared with only three to six months for couples.
Take Care of Crucial Paperwork
A wedding often spurs couples to consider their financial future. From living wills to power-of-attorney forms, it forces them to focus on serious life considerations. As a single female, you should make sure you have updated sets of paperwork; you can access advance directives specific to your state here, and a sample power of attorney can be accessed here. Your doctor may also have a form you can fill out specific to that hospital and practice. Talk to a financial advisor to find out about other paperwork you should have. Be sure it is notarized as appropriate.
Buy a Home If and When It Makes Sense for Your Situation
If you’re contemplating a home purchase as a single woman, you’re not alone: Women now are the second largest homebuying group following couples, surpassing single male homebuyers, finds the National Association of Realtors®’2018 Profile of Home Buyers and Sellers. Just make sure you’ve thought through all the costs related to a home, including maintenance and insurance, to ensure that it’s a financially savvy move, compared with renting.
Don’t Skimp on Insurance, Including Disability Insurance
In a new survey of the awareness and ownership of disability insurance across today’s workforce, The Council for Disability Awareness (CDA), uncovered that among all single women in the U.S. whether never married, divorced or widowed – nearly 1 in 3 said they were “extremely unprepared” for any period of disability if they should lose their income. That number equates to roughly 10-million women in America. What would you do if you were forced to take a leave from your job because of an accident or extended illness?
Without a partner to cover the bills, this work lapse can be devastating to a single woman. That’s why disability insurance may be even more important for single women, considering that more than a quarter of today’s young adults aged 20 will likely be out of work for at least one year at some point in their career. Make sure to talk with your human resources department about your options as a way to safeguard your income.While single women often have more freedom with their finances, that comes with responsibility as well. Take care of your financial wellbeing is a gift you give yourself.