Budgeting as a single person is a balancing act. On the one hand, you have the freedom to spend your money as you please. After all, you don’t yet have a spouse or a family to support! But, on the other hand, it’s also important to save money for your unknown future.
Being single doesn’t mean you’re off the hook when it comes to budgeting, saving, and planning ahead.
On the contrary, if you’re single, now is the best time to take advantage of your situation and set yourself up for long-term financial security.
By establishing the right financial habits now, you’ll be better prepared to manage your money if and when your situation changes.
That’s why we’ve compiled this list of budgeting tips for singles.
Whether you stay single forever or get married and start a family, your future self will thank you for implementing these strategies.
First and foremost, if you want to maximize your single budget, the best place to start is by using the zero-based budgeting method.
In case you’ve never heard of a zero-based budget, it involves planning exactly how you’re going to spend, save, or invest every dollar you earn each month.
In other words, your total income minus your planned expenses should equal zero.
Why use a zero-based budget?
Because it puts you in control of your money and gives you a plan you can actually stick to.
Other budgeting methods tend to be vague, leaving too much room for error.
For example, the 50/30/20 budgeting method involves using 50% of your income for your “needs,” 30% for your “wants,” and 20% for your savings. But what classifies as a need versus a want? With this method, every time you make a purchase, you have to think about which category it fits into.
Alternatively, when you create a zero-based budget, you decide ahead of time how much money to allocate for specific expenses.
This includes things like rent, utilities, clothing, and retirement savings.
You won’t have to do mental gymnastics every time you pull out your wallet.
Instead, you’ll know exactly how much money you have for every expense.
This is the best method of budgeting for singles because it allows you to create a clear action plan for your financial goals.
By using a zero-based budget, you can make sure your spending aligns with your priorities.
Also, you can start making real progress toward your long-term financial goals.
For most people, spending money is a lot easier than saving it.
(I would know. I’m one of those people.)
After all, there are things you need and want to buy today, and those things seem more important than the mysterious, unknown needs of the future.
But if you don’t save any of your money, or if you only save what’s left over after you spend, you risk not being able to fund your retirement or reach your financial goals.
Your single years are the best time to aggressively save.
Even if you don’t yet know what you’re saving for, you likely have more money to put away now than you would if you were married or supporting a family.
It’s better to be prepared than to realize you don’t have enough money when you need it.
Therefore, when you’re budgeting as a single person, save or invest a portion of every paycheck before you spend a dime.
You can even set up automatic transfers to move money directly into your savings or investment account the same day your paycheck arrives. That way, you won’t be tempted to spend the money you’ve designated for savings.
When you make saving money a top priority, you create a life of financial security.
Ultimately, this habit will result in less financial stress and a more fulfilling life!
Arguably the most important tip when it comes to budgeting for singles is to stay far, far away from debt.
Nothing will destroy your financial health more quickly than debt.
As a single person, the world is your oyster.
You don’t have many obligations tying you down, and you have the freedom to spend money on yourself.
With that freedom, though, comes responsibility.
If you decide to buy things you can’t afford and take out loans to cover the cost, you’re digging yourself into a stressful financial hole.
Trust me. My wife and I spent the first 6 months of our marriage digging ourselves out of $34K of debt, and it was incredibly difficult!
It’s like agreeing to start a race ten yards behind the start line.
It handicaps you on your financial journey.
Seriously, instead of saving for exciting moments and your biggest dreams, you’ll be stuck making monthly payments to cover a purchase you made five years ago.
Not to mention, a mountain of debt isn’t exactly a selling point when it comes to finding a spouse.
I mean, when you marry someone, you also marry their financial situation.
So, if you hope to get married one day and are carrying around tons of debt, you should think about the undue burden you could be placing on your future spouse.
Rather than taking out loans to buy things you can’t afford, get in the habit of saving your money until you’re able to make all of your purchases in cash.
No matter how enticing that new car or business opportunity may seem, going into debt probably isn’t worth the long-term financial consequences.
Another single budget-friendly tip is to reduce your cost of living as much as possible.
The lower your living expenses, the more money you’ll have available to put toward your top financial goals and priorities.
Take a look at what you currently spend every month on necessities like housing, utilities, food, transportation, and insurance. Then, go through these non-negotiable expenses and try to find areas where you can cut costs.
For example, are you currently living alone and paying full rent? Perhaps you could find a roommate to live with and cut your rent in half.
Or, are you spending an obscene amount of cash on gas to fuel your commute? Maybe you could work from home a few days out of the week or get a more economical car.
As a single person, you’re the sole decision-maker when it comes to where and how you live. And the more you’re willing to sacrifice right now, the bigger your financial rewards will be over time.
This doesn’t mean you have to live a completely bare-bones, minimalist lifestyle during your single years! But it’s a good idea to determine which short-term sacrifices are worth making now to help you achieve the lifestyle you want down the road.
Want to get better at budgeting and saving? Check out some of our other helpful guides:
- Zero-Based Budgeting: What Is It? And How To Do It?
- 7 Budgeting Skills That Will Make You Rich
- 25 Apartment Decorating Ideas On A Budget
- Living On A College Budget: 21 Tips That Won’t Wreck Your Fun!
- 15 Best Places To Buy A Couch On A Budget
- 25 Tips For Living On A Food Budget
- How To Stick To Your Budget: 21 Simple Tips
- 15 Best Places To Buy Quality Clothes On A Budget
Retirement may seem like it’s light-years away. But if you don’t start saving for it now, it’s sure to catch up with you.
At a certain point, we all reach an age at which we have to or want to stop working.
When that happens, you need to ensure you have enough money to be able to retire comfortably. And the sooner you start investing for your retirement, the greater spending power you’ll have during your golden years.
There are plenty of insightful retirement calculators online that allow you to estimate your projected retirement savings.
All you have to do is enter your current age, how much you have saved, and your planned monthly savings.
If you take the time to play around with these calculators, you’ll soon realize what a huge difference just a few extra years of saving can make. You’ll wish you had started saving ten years ago!
To start saving for retirement, make sure you first max out your employer match if you have one. Afterward, invest as much as possible in a Roth IRA and your 401K.
While there are lots of things to save for during your single years, retirement should be your top saving priority. With some focused, intentional effort now, you’ll be much better off during your later years in life.
Another aspect of life you should take advantage of when you’re budgeting as a single person is planning and preparing your meals at home. Not only will this save you money, but it will also be much better for your health!
Going out to eat or swinging through the drive-thru is easy and convenient, but it tends to be way more costly than preparing your food at home.
So, if your goal is to save money and improve your financial situation, your food budget is worth revising.
It may help to put some restrictions on when you allow yourself to go out to eat.
For example, you might decide to only eat at restaurants when you’re with other people. When you’re on your own, plan and prepare your meals, then freeze and eat the leftovers.
This may seem like a simple change, but over time, those small savings will start to add up in a big way.
And, in case this sounds too restrictive, you might find you actually enjoy cooking at home.
Budgeting for social activities tends to be an area of difficulty for singles.
When you’re single, it’s important to get out and engage with other people. It’s only natural that your social life is a priority during this time. However, that doesn’t mean you should spend money irresponsibly.
If you’re someone who believes the words “responsible” and “social life” don’t belong in the same sentence, it’s time to start thinking differently. You don’t have to (and you shouldn’t!) sacrifice participating in social events entirely for the sake of saving money. But budgeting for your social expenses ahead of time will make sure you stay on track for your financial goals.
If it helps, only bring cash when you go out with your friends and leave your debit or credit cards at home.
Your single years should be a fun and exciting time, but they’re also a prime opportunity to make progress on your financial goals.
Whether you want to retire early, save for a big purchase, or get out of debt, now is the time to start applying these single budgeting tips.
By sticking to a zero-based budget, saving/investing your money, and cutting costs where you can, you can build a future of financial freedom while still enjoying your life in the present.