Ah, the single life — half the dishes, half the laundry and all the bed. But does it mean double the costs?
Just under 50% of adult Canadians are married or in common-law unions, according to the most recent Statistics Canada numbers released in 2017. That leaves more than half of the population single, a dramatic demographic shift over the past couple of decades. In 1981, only 39% of the adult population was single.
So what does this mean for our financial futures?
Manisha Thakor, blogger at MoneyZen and co-author of On My Own Two Feet: A Modern Girl’s Guide to Personal Finance, was 31 when she bought her first home, a full five years before she got married. Thakor says her number-one piece of advice is to take control of your finances early in life, when you’re likely still single.
“When I first started working, my life wasn’t nearly as glamorous as many of my friends’ lives,” says Thakor. “I saved first and then gave myself money to have fun with.
“When you own your finances, you own your life,” she adds. “You need to commit to taking care of your financial health the same way you would your physical health, because no one will ever care about your money as much as you will.”
To start saving as a single, consider these tips:
Take control of your spending
Our primary financial focus needs to be on the things we can control, says Stephanie Holmes, the Nova Scotia-based author of $pent: Your Money Mindset is the Key to Your Financial Freedom and a contributor to Golden Girl Finance.
“People are flustered by high hydro rates or gas prices,” she says. “You can holler and scream and jump up and down all you like, but the bottom line is you don’t have control over it.”
Holmes tells her clients to separate their cash flow into two categories: “working” and “active.” The first category is the money needed to meet regular, monthly expenses, while the second is discretionary expenses such as a caffeine boost in the morning or a night out with friends.
“When you do that, your perspective will change,” says Holmes. “Often, our spending is running on auto-pilot, and we’re slowing down our debt repayment or saving as a result.”
Try before you buy
There are some pitfalls, such as job loss, that singles particularly need to consider. When you share expenses with a partner, your other half can help out during difficult times. That’s not true when you’re alone.
“You are your own safety net when you’re single,” says Thakor. “That means your emergency fund may need to be larger. It also means you have to manage your cash flow more carefully.”
You need to use that same, cautious approach when making big purchases, Holmes adds.
Do a practice run before buying a first home, she suggests. Make a spreadsheet of all expected costs -- mortgage payments, insurance, taxes, condo fees and utilities. Then for a full six months, put away the difference between your estimate and what you’re currently paying in rent.
“Once you own a home, if an expense creeps up and you don’t have savings, then you have few other choices than to put that expense on a credit card. That can really set you up for disaster,” says Holmes, adding that the practice run helps you ensure you’re making a purchase you can afford while building up your future down payment.
Once you’ve obtained a mortgage and bought a property, you could qualify for a line of credit secured by your home equity, with a lower interest rate than a credit card.
Balance spending and saving
Whether you’re single or attached, the same money management principle applies: striking the right balance between paying for your needs now and saving for the future.
Help yourself save by learning how to shop and cook for one effectively and efficiently, and by vacationing with a friend to avoid paying single supplements.
Thakor suggests using the 50/30/20 model:
- 50% of your take-home pay for essentials (housing, transport, food and insurance)
- 30% for your wants (entertainment, shopping, vacations or saving for a ”fun” purchase)
- 20% for savings (a near-term emergency fund and a long-term retirement plan)
“Basically, if you’re able to save money and still have joy in your daily life, you’ve nailed the right balance,” she says.
- Our budget calculator will help you track where your money comes from and where it goes.
Two incomes aren’t always better than one
It may seem harder to save on your own, but Thakor argues it might actually be easier to save as a singleton.
“Academic studies have shown that financial opposites tend to attract,” she says, which can mean added stress and compromised spending. “When you’re single, you only have to deal with your personal preferences. It’s very empowering.”
Holmes says being single brings the ability to make faster, more focused decisions. For example, you don’t have to meet someone halfway on what type of car you want, where you want to vacation or where you choose to live.
“One of the biggest perks of singledom is that you don’t have to deal with anyone else’s opinion. Ever,” she says. “You’re really in full and total control and that’s a huge benefit.”
- The road to financial security starts with action: Get going with our Bright Start tool.
More ideas to help you keep your finances on track: