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7 Financial Planning Strategies for Single Women

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financial planning for single women

If you’re a single woman, most general financial advice also applies to you — but with a twist. As the gender pay gap holds steady, you may need to be a little more vigilant to create an independent financial future. Here are seven financial tips that single women should consider.

If you’d like individualized advice on financial planning, consider working one-on-one with a financial advisor.

Save for Emergencies

According to Fidelity Investment’s 2021 Women and Investing Study, 34% of women say their financial situation keeps them up at night at least once a month. Building a solid emergency savings fund can help you cope with these concerns and get ahead of your anxieties.

Without the luxury of a dual income, you’ll want as big of a cushion as possible. Consider saving enough to cover at least six months of expenses—it might seem like overkill, but if you lose your job, have surprise big expense or otherwise need money quickly, a large emergency fund can help you cope with nasty surprises without ruining your progress towards your larger financial objectives.

Pay Off Debt

The Fidelity study also found that out of the women that said their finances were keeping them up at night, 37% said their major concern was managing debt. Credit cards and other typically high-interest debt vehicles can make it hard to make any headway towards your financial goals.

Some debt, like student debt or a mortgage, might take a chunk out of your income each month, but are generally considered “good debt,” especially if you have a competitive interest rate. One of the best ways to save money in the long run is to pay off high-interest debt as quickly as you can. Create a plan to tackle all of your existing debt—but prioritize the forms of debt that are costing you the most.

Plan for Retirement

financial planning for single women

According to the U.S. Census Bureau, women are more like than men to have no retirement savings set aside. Roughly 50% of women said they had no retirement savings at all, compared to about 47% of men—a bleak number.

Start putting aside money for retirement as early as you can. If your employer offers any sponsored retirement accounts, and especially if they offer a match up to a certain percentage, take full advantage of that. If you can afford it, max out your contributions each year. The maximum amount you’re allowed to contribute to a retirement account can change each year, so familiarize yourself with the IRS rules: In 2023, it’s $22,500 for 401(k) plans and $6,500 for traditional and Roth IRAs.

Budget, Budget, Budget

Most women (71%) say that creating a personal financial plan made them feel more confident in their financial situation, according to the Fidelity study mentioned above. Take stock of your financial situation and plan out how much money goes to your living expenses, how much you should be saving for retirement and for emergencies, and how much should be going to paying off your debt.

It can be challenging to juggle these competing priorities, and while most women should split their money between those three areas rather than going all in on one, your own unique financial situation may require a different approach. If you feel overwhelmed, consider working with a financial advisor. The Fidelity study also found that 77% of women said that they’d be more confident in their financial future if they had a financial advisor to help them invest.

Diversify Your Investments

An emergency fund and retirement savings are the perfect places to start saving, but once you have those underway, start investing any additional savings instead of leaving it in a savings account. The Fidelity report found that women who invested saw fantastic results, outperforming their male counterparts by 0.4%.

Diversifying your investments helps you minimize risk and generate larger returns than you will get from savings account stasis. Split your investments between stocks, bonds and other assets, and use an asset allocation calculator to tailor your investments to fit your risk appetite and time horizon.

Consider Your Insurance Options

financial planning for single women

According to the Council for Disability Awareness, unmarried female workers are underinsured for a disability and nearly one in three said they were extremely unprepared for any disability that would cause them to lose their income. To protect themselves against this possibility, single women should look into insurance options for both short and long-term disability.

That’s not the only type of insurance you should consider. The American Association for Long-Term Care Insurance notes that since women live longer than men and have higher rates of chronic health issues, long-term or end-of-life care insurance can be particularly important. Additionally, even if you don’t have children or other dependents, you should consider taking out a life insurance policy to help cover debt you may leave behind and finance your final expenses.

Create an Estate Plan

You may not feel that you’re wealthy enough for estate planning, or that estate planning is for people with spouses or children—things you might not have. But the truth is that doing the work to put a plan into place will help answer some pressing questions and ensure your assets will go to those you want them to, whether that’s your child, a friend, or a charity.

Many married women may rely on their spouses will make tough health care and financial decisions if they aren’t capable of making those decisions themselves. As a single woman, you’ll want to find someone—or more than one person—you can entrust with financial power of attorney, medical power of attorney and to execute your will. While it might be tempting to put this off or hope it will never come to that, creating an estate plan and finding trusted people to fill these roles will ensure that if the worst does indeed happen, you’ll be prepared.

The Bottom Line

While most general financial advice applies to single women just as it applies to other demographics, there are some specifics single ladies should pay attention to. With a bit of care and effort, though, any single woman can flourish financially.

Financial Planning Tips

  • financial advisor can help you create a financial plan to save and manage debt. Finding a financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three vetted financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
  • If you already have money saved up and are deciding between investing or paying off debt, this guide could help you prioritize competing financial goals.

Photo credit: ©iStock.com/PeopleImages, ©iStock.com/Inside Creative House, ©iStock.com/Delmaine Donson

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