Financial advice for married couples abounds, but you may be hard-pressed to find comparable information if you are single. Keeping your status in mind, here are five practical suggestions.
• Work out a budget. Spending more than you earn can lead to financial disaster. Before you can figure out how to cut back, assess your overall situation. Then make the necessary adjustments. Stay within the budget boundaries, but also give yourself reasonable leeway.
• Maintain health insurance coverage. When you’re young and single, you might think you’re invincible, but a lengthy hospital stay could quickly erase your savings. It’s important to remain insured even if it’s limited to catastrophic coverage. If you’re changing jobs, you might continue coverage from an ex-employer’s plan under COBRA.
• Look into DI insurance. Similarly, you might opt for a disability income (DI) insurance policy for added protection in the event of a severe illness or accident, especially if you’re paying off a mortgage or have a high monthly rent obligation. Because you don’t have another salary to fall back on, you’re at greater risk than most married individuals.
• Start saving for retirement now. Once you’re working full-time, begin to salt away money in a qualified retirement plan, or an IRA, or both. Take advantage of employer-sponsored plans like a 401(k), especially if the company offers matching contributions. Avoid a common mistake of singles: If you switch jobs, roll over plan assets to another plan or IRA instead of cashing in the funds.
• Create a will. Wills aren’t just for married couples. A will allows you to designate beneficiaries for specific bequests. If you have any young children, you can appoint a guardian in the will. Finally, the will may coordinate other aspects of your estate plan.
Patti Hudson is a certified public accountant at Wessel & Co. of Johnstown.
To read stories in their entirety, visit one of these links: