Guest post author: Stacy Miller
According to the US Census Bureau, 110 million U.S adults have decided to remain single, and 53% of them are women. The idea of getting married is not that enticing anymore. The concept of ‘happily ever after’ is also fast diminishing. Single women are having more fun than their married counterparts. They can go anywhere and do whatever they want. But when it comes to managing finances wisely, single women are facing a lot of tough challenges.
Only one-third of single women bother to think about finances and managing money seriously. They are least likely to have a proper financial roadmap for paying off debts and reaching their financial goals.
Are you a single woman by choice? If so, then you should be a pro at handing finances and be self-sufficient financially because when you’re in trouble, there is no one to take care of you. You have to manage everything by yourself.
I’m a single woman in the early thirties. I know how tough it is to manage personal, professional, and financial life all alone. So today, I thought about sharing a decade-by-decade guide on how to manage money like a smart woman. Without wasting any further words, let’s go straight to the guide.
How to manage money in your 20s
(i) Start paying off your student loans: Start making payments on student loans as per the payment plan. If you can’t afford the payment plan, then consider refinancing or other repayment plans.
(ii) Select your first job carefully: Be extremely careful at the time of selecting your first job because much depends on this factor. Apart from the salary, look at the employment benefits carefully. For instance, 401(k) plan, healthcare plans, and tuition reimbursement if you want to do higher studies.
(iii) Create a budget and save money: Download a budgeting software to know the areas where you can save money and spend without any guilt. Create an emergency fund for the unforeseen expenses. If you’re a single child, then you may have to take care of your parents’ emergency expenses as well. Set a target of saving at least 15% of your annual income every year.
How to manage money in your 30s
(i) Create an investment portfolio: Consult a financial planner and create a diversified investment portfolio. Invest in mutual funds, stocks, and treasury bonds. This is the best time to take risks. Even if you incur a loss, you’ll get 30 to 40 years to recover from it.
(ii) Pay off your debts: Too many things happen in your 30s. You’re working hard to build your career, explore various places, and buy an apartment. But in the midst of so many things, don’t forget the debts you have acquired in your 20s. Consider consolidating credit card debts to get rid of a huge financial burden and save money.
(iii) Think about buying a home: This is the correct age to buy a home if you’re planning to do so. If you buy a home now, you’ll be able to pay off your mortgage comfortably by the time you retire. However, if you’re planning to relocate in the next 5 years, then don’t buy a home.
(iv) Build your nest-egg: As your income gradually increase, it’s the best time to make investments in the retirement savings accounts. If your employer offers a 401(k) account, take advantage of it.
How to manage money in your 40s
(i) Create a plan B: Ever wondered what will happen when you’re not well and can’t take care of your financial matters? Who will make all the decisions on your behalf? Appoint durable powers of attorney who will make all the financial and medical decisions on your behalf. Trust me, it’s very important.
(ii) Think about disability options: In my opinion, this is extremely important for singles. Remember, you’re a single woman. If you can’t work for a certain period, then disability insurance can help you survive without exhausting your credit limit.
(iii) Keep on saving money: When you’re single, you have too many responsibilities. You’re pressurized from every side. On one hand, you have to take care of aging parents. On the other hand, if you have college kids, then you have to provide emotional and financial support to them. In the midst of so many things, don’t forget to save money for yourself.
(iv) Think about life insurance: Usually, single women don’t plan to buy a life insurance policy because they have no dependents. However, if you have a co-signer on loans or don’t desire to impose the funeral expenses on your loved ones, then buy a life insurance policy.
How to manage money in your 50s
(i) Plan to pay off debts within 10 years: If you want to retire debt free, then there are a few steps you have to take right now. Refinance your mortgage with a low rate loan. Plan to pay off the mortgage within the next 15 years.
(ii) Stash away extra cash for retirement: In this decade, you can contribute an extra $6000 to your retirement savings accounts. So save as much as you can, build your nest-egg, and secure the golden years of your life.
(iii) Organize all the retirement accounts: If you have changed several companies in the last 50 years, then check if you have left several retirement accounts unattended. Sit with a financial consultant and roll over all the funds from the retirement accounts to your current plan.
How to manage money in your 60s
(ii) Keep all the documents properly: Make a will and name the beneficiaries. Appoint a power of attorney if you still haven’t done it. Check your insurance policies and estate plan several times.
(iii) Decide how long do you want to work: You have worked for so many years. Do you want to work even more? Do you need more money? Will your employer permit you to work for the rest of your life? Think carefully. If you have worked for many years and saved enough, then you can relax and lead a quiet life.
(iv) Downsize to a small apartment: Try to downsize to a small apartment near your loved ones. A small apartment is enough for a single individual. Plus, you can stay near your friends and family. You can attend all the parties on various occasions. Plus, if you need help, your friends can come over and help you within a few hours.
Do you have any other tip or suggestion on how to manage money at every age? If so, then you can share your thoughts and views in the comments section here.