Money saving tips for singles at every age
If you're single, you may have to take extra time with money management, planning for the future and learning to budget and invest. Here are some things to consider at every age.
Saving for retirement, unexpected emergencies, a house down payment, college funds: There are lots of pieces to a well-balanced financial life. If you're single, you probably spend a lot of time thinking about all of these things by yourself. That's why starting out and making progress through every stage of life is so important. Focus on the priorities for your age.
In Your Twenties
Benchmark: save 25% of your overall gross pay
Habits: build savings and investments, pay down debt and establish lifelong financial habits
Use the 50-25-25 rule to allocate income
- 50% essentials — rent, groceries, bills
- 25% spending and debt — eating out, vacation, shopping, student loans
- 25% saving — personal savings, investments
Prioritize
- 401k — contribute enough to receive the maximum employer match
- Emergency fund — start by saving $1,000, then build up to 3-6 months' worth of expenses
- Roth IRA — qualified withdrawals are tax-free in retirement
Pay down debt
- 1st — start with high-interest debt: pay more on credit cards; make minimum payments on loans
- 2nd — pay down low-interest debt: increase the amount paid to student loans and car payments
In Your Thirties
Benchmark: save 1x your current salary
Habits: monitor spending and build retirement accounts
Adjust your budget to accommodate goals
- Down payment on a home
- Child's college fund
- Bigger retirement goals
Prioritize
- Retirement — set a goal of saving 15% of your income
- Emergency fund — maintain 3–6 months' worth of expenses
- Rethink insurance — more assets may equal the need for more coverage, such as disability and life insurance
In Your Forties
Benchmark: save 3x your current salary
Habits: focus on maximizing income
Use the 70-20-10 rule
- 70% expenses — anything you spend your money on
- 20% saving — emergency fund, child's college
- 10% debt — mortgage, etc.
Prioritize
- Retirement accounts — consider a Roth IRA; it offers tax-deferred growth and qualified distributions are generally tax-free
- College savings — consider a 529 College Savings Plan for college expenses
- Debt — work to pay off your mortgage, student loans, credit card debt, car loans, etc.
In Your Fifties
Benchmark: save 5x your current salary
Habits: gear up savings routines that you established earlier in life
Prioritize
- Retirement accounts — take advantage of catch-up contributions and avoid early withdrawals
- Medical savings — maximize a health savings account
- Income — consider working longer, even if it's part-time
In Your Sixties
Benchmark: save 10x your current salary
Habits: pay close attention to expenses and stay focused on savings
Prioritize
- Retirement — plan withdrawals in order to avoid additional taxes
- Social Security — claiming benefits at your full retirement age could result in a 30% increase compared to claiming at age 62
