Finances for Singles – how different are they?
My shredding madness this past weekend got me thinking about how different life is for me; being divorced and paying for everything on my own. Maybe a bit of nostalgia set in at the same time as well; not a want to be married (possibly someday again) but instead a reminder of where my life was(is) going and how quickly it can change directions. I am on a new path now, which will take a bit more work being on my own. It made me think of how I’m going to fit dating back into my strict budget. I thought about many things that I now need to consider….
In the 2006 census, single Canadians outnumbered married Canadians for the first time, with 52 per cent of Canadians never having been married.
In Canada’s largest cities, the number of singles is even higher:
Vancouver — 58 per cent
Toronto — 53 per cent
Edmonton — 55 per cent
Montreal — 66 per cent
Victoria — 70 per cent
When you are divorced or have never been married, life is a bit different. Even though singles are becoming the new demographic over marrieds, there is still a stigma that society places on being single. You are still not socially accepted – society believes that we should all be married with 2.5 kids, and have a house with a white picket fence.
What is financially important when you’re single?
A lot. What happened if you suddenly were diagnosed with a critical illness like cancer or MS? Would you have someone to take care of you or your finances? Possibly not. What if you lost your job? Do you have 6 months of living expenses saved? Again, you may have no one you could rely on – or, better yet, you could end up on a family members couch until you find a job. You need to make sure you cover yourself by saving money in an emergency fund and with insurance – not necessarily life insurance.
What do you need?
- Disability insurance that covers 50%-70% of your salary; if you’re unable to work. Most employers have coverage for this, but be sure to top it up if it covers less than 60% of your salary. I personally have extra insurance through my employer, including critical illness insurance.
- A will. If you die without a will, all of your assets could end up in the hands of the government. Next in line would be your parents or any immediate family still living. This is a difficult one. When you’re single, who do you give everything to? Family, friends, a charity?
- For someone like me in their mid-30’s, you also need to build your investment portfolio and consider buying real estate.
All of this is good to keep in mind, but let’s be realistic. When was the last time you considered a will in your mid 30’s? Maybe I’m way off base here, but I think it is the last thing on most people’s “financial/estate planning” lists when it should be the first. Every time I think my assets could either go to the government or be stuck in red tape for my family to receive, it makes me cringe. Yet I still don’t take the time or set aside the $500 to get it done by a lawyer. Why is that? It’s like any other insurance. You think that it will never happen to you…until it does.
There’s no guidebook I can offer, no lists of “how-to’s”. Everyone’s life and finances are different. Ultimately, you have to do what works best for you.
What works best for me is paying off my debts, setting goals and making sure I have an emergency fund.
Some useful articles for singles: