There’s a ton of advice for women regarding their family’s finances, but what about financial independency for my fellow single ladies? It is no secret that many are staying independent longer, marrying later, or simply choosing to not get married at all. Without a dual income, navigating your long term finances may seem unsettling, yet there’s something so empowering about having the ability to be well educated in making sound financial decisions all on your own. Anyone else hearing single ladies by Beyoncé right now? Having the skill set and confidence to control your own money verses having your money control you is the financial liberation we all need. That being said, here are financial wellness tips for my fellow independent ladies.
Start Saving for Retirement: Take the Plunge!
Whether you decide to get married eventually and manage your finances dually or not, it is important to start saving away for retirement as soon as possible. There’s no secrecy to women historically living longer life expectancies. So don’t hesitate; Let the magic of compounding begin and get in the investing game! Beginning with retirement contributions first, make sure you take advantage of the required contributions for an employer 401(k) match. Additionally, consider investing in a Roth 401(k) or a Roth 403(b) if available through your employer. By doing this, your income source won’t be taxed as you seek to withdraw through retirement. Once you are reaching the necessary amount for a match, contemplate other investing alternatives such as a Roth IRA or Health Savings Account (HSA). The main perk of having an HSA is the pre-tax money invested and tax free withdrawals on eligible healthcare expenses.
Get your Affairs in Order
Estate Planning. The dreaded subject many tend to avoid. Even the best of us make the assumption that estate planning is primarily for married couples to plan for the unexpected and care for children. Rest assured, estate plans are equally important for single women. Ask yourself, “Who will have the ability to pay my bills if I am incapacitated?” “Who will make investment choices on my behalf?” “Who will be making the decisions with doctors if I am unable to?” The beauty of estate planning is it allows you to add protection for someone else to step in and help make those all-important financial decisions. So be sure to add beneficiaries to all your accounts and make all health wishes clear. Consulting with your attorney and financial advisor can help declare documents such as a Will, Power of Attorney, Health Care Proxy, and any Trusts are all in order.
Go the extra distance with an emergency savings
Typically, six months of your necessary living expenses is suggested for an emergency fund. However, having eight-twelve months of emergency savings as an extra cushion is never a bad idea for a single person household. The enhanced buffer can go a long way in times of financial crisis when there is no other stream of income. Additionally, thinking ahead and escrowing for other financial bucket list items is a good strategy to implement sooner than later. In need of a new car in the future? Planning that next summer vacation with the girls? Escrowing out into different buckets is my favorite way to differentiate savings.
Surround yourself with the right people
Truth is, your circle of influence is everything and can make or break some goals. Surround yourself with goal oriented people that best fit your everyday lifestyle. Of course treating yourself every now and then is okay, but there is nothing wrong with a wine and charcuterie ladies night in! As always, make a commitment to improving your financial knowledge. So don’t hesitate, make the move and feel sanctioned by your financial future!