Financial Advice for Single Ladies

Financial Advice for Single Ladies

Originally posted on

by Samantha Paxson, Chief Experience & Marketing Officer (CXMO), CO-OP Financial Services

While more than 57 million single women now live in the U.S., it’s safe to say that the majority of these ladies aren’t what our parents used to call “spinsters.” As Redbook Magazine noted recently, women can be both single and happy.

U.S. Census figures show that the percentage of women 30-34 who were never married approximately tripled between 1970 and 2000, reaching 22 percent. Increasingly, remaining single well into one’s 30s is a conscious decision, with many older singles enjoying the freedom to make their own financial and lifestyle choices.

Yet with financial freedom equals responsibility, including paying for housing as well as health care, higher education, entertainment and vacations and an emergency fund – not to mention saving for retirement. Thankfully a number of reputable websites, periodicals and books and reliable financial advisers are available to guide them.

Step One: Research
Most single women in their 30s are in good financial shape. Indeed, women ages 25 to 34 are the first generation whose careers were launched at near parity with men, according to The Economist. Delaying marriage has meant they earn 93 percent of men’s wages.

They are more careful with their money than men are, experts note. Single women are generally more cautious spenders than men, says in “5 Things Every Single Woman Should Know About Money.” Yet even the wisest single women know they need to do more with their money.

Getting a handle on personal finances is the first step in financial planning. It begins with carefully tracking spending with tools as simple as a paper ledger or more sophisticated, such as a basic electronic budget worksheet available free of charge from Kiplinger.

Whatever tracking method you use, the point is to determine where you can cut back in order to establish savings and plan for the future.

Step Two: Education and Planning

Single women responsible for their own futures know that educating themselves and seeking expert advice are two critical paths to success.

Online resources abound, beginning with a helpful checklist from Prudential. Recent books geared toward single women can be helpful as well. Two real-life examples include “All the Single Ladies: Unmarried Women and the Rise of an Independent Nation,” by Rebecca Traister and “Enter Helen: Helen Gurley Brown and the Rise of the Modern Single Woman,” by Brooke Hauser.

Obtaining advice from a professional can lead to smarter investing decisions. A survey by TIAA notes that 63 percent of women who’ve received financial advice feel they are saving enough for retirement compared to 45 percent of those who never talked to an adviser. A financial adviser can also help plan for other life goals, such as purchasing a home.

Still, choosing well is paramount. The Wall Street Journal offers these tips:

  1. Look for a financial adviser who is a certified financial planner (CFP). They’re licensed and regulated, plus take mandatory classes on different aspects of financial planning.
  2. Consider the planner’s pay structure. A planner who earns money based on commission rather than a flat, hourly rate could have an incentive to steer you in a particular direction.
  3. Read your financial planner’s code of ethics. Look for the word “fiduciary” and language that requires planners to look after your best interests.

Step Three: Execution

Once you’ve got a handle on spending and expenses and started investing wisely, it’s time to also set aside money for emergencies. While the old rule of thumb was to have about six months’ pay in an emergency fund, most people laid off today say it takes about nine months to find a job. Your emergency money must be kept easily accessible in a money market or high-interest savings account.

Decreasing your debt – and avoiding late or missed credit card payments – is essential because credit reporting agencies can lower your credit rating, which can have far-reaching effects on your ability to obtain a loan or buy real estate. Pay off your credit debt and student loans to boost your credit pronto.

Because you don’t lean on a spouse to boost your income or shore up your savings, you may be behind on your retirement planning, according to a recent Prudential survey. Realistic retirement planning begins by knowing what your savings options are and how much you need to save to meet your goals, notes A 401(k) through your workplace or a regular or Roth IRA offer some tax advantages for savers and are an easy way to start a nest egg.

If you have debt, are financially responsible for an elderly parent, or you don’t want anyone else having to shoulder your end-of-life expenses, you need life insurance. The younger you are, the cheaper it will be, so it pays to invest early and wisely in term life insurance even if you don’t have a spouse or dependents.

Step Four: Relaxation!

With careful planning, carving a path to financial freedom as a single woman is very achievable. It pays to begin early, consider short- and long-term goals, remain prudent about fiscal decisions, and maintain your focus.

Ultimately – with research, education, planning and expert advice – single women are achieving financial well-being as they head toward bright and happy retirement years.