Over the last 70 or so years, a growing number of Americans have been living unmarried. In 2023, 51% of Americans 15 and older weren’t married, compared to 35% in 1950, according to the U.S. Census Bureau.
While single life has many advantages, like more freedom and a simpler budget, it can also bring a few disadvantages. Here are some common financial challenges single Americans face and how experts suggest they can overcome them.
Housing
As a single person, one of the biggest costs you’ll typically face is housing.
“Living alone comes with a tremendous financial burden when having to cover the entire rent or mortgage payment, along with all the bills and maintenance or repairs,” Andrea Woroch, a money-saving expert, said in an email.
As of 2022, the median monthly mortgage payment in the U.S. was $1,400 and the median monthly rent payment was $1,000, according to the Federal Reserve’s Report on the Economic Well-Being of U.S. Households.
“Finding a roommate to split these costs is a great way to improve your financial health, especially for single people who own their own homes. It’s like having someone else pay down your mortgage,” Woroch said.
But who should you live with? According to the Federal Reserve, 86% of Americans report living with their spouses, partners, children, parents, siblings, other relatives or nonrelatives. The remaining 14% live alone.
Meals
Buying groceries, planning meals and ordering takeout can also be tricky for singles.
“One of the biggest complaints I hear from single people living alone is how hard it is to cook for one person,” Woroch said.
She suggested picking a day each week to cook a couple of meals in bulk and freeze single-serving portions. You can then easily reheat them when you get hungry and don’t have to worry about cooking too much food, throwing away the waste or having leftovers go bad.
[READ: How Much Should I Spend on Groceries?]
Buying items in small portions is also expensive, so Woroch recommended splitting bulk purchases with other people.
“Find a friend, family member or neighbor who you can split bulk purchases with. This way you benefit from the lower price per unit without burdening yourself with oversized packages,” she said.
Further, food delivery can end up costing more than it should for singles due to the minimum order requirements. You can save by ordering when you have a friend or family member over, or by ordering only when the item you want meets the minimum.
Health and Financial Emergencies
While it’s always important to have an emergency fund, it’s even more critical for those who are single.
“If you’re married and become sick or lose your job, it’s possible that your partner could cover the income gap,” Molly Ward, a certified financial planner at Equitable Advisors, said in an email.
When you’re single, you don’t have the luxury of relying on a partner’s income, so you’ll need to have an adequate emergency fund in place. Financial experts generally recommend keeping three to six months of living expenses on hand. As a single person, saving closer to six months is a good idea.
To prepare for whatever the future may hold, Ward suggested taking inventory of your financial situation each year and figuring out what it’ll take to run your household at a minimum level.
Once you’ve done that, she recommended asking yourself some tough “what if” questions, including:
— What if I can’t work? How long would my savings last me?
— Is my emergency fund adequate and do I have proper disability insurance coverage?
— What if I suddenly pass away? Are my children or my debts covered?
— What if I can’t take care of myself when I am older? Are my will and my health care directive documents up to date?
Performing this financial fire drill once per year can help to ensure you’re prepared.
[READ: How to Perform a Midyear Financial Checkup]
Taxes
Being single will also impact your taxes, but it may not be as bad as you think.
“There are times when getting married will result in paying higher taxes than being single, known as the marriage tax penalty. This usually occurs when a married couple incurs a higher tax rate when filing jointly than they would if they were filing separately,” Charlie Massimo, a senior vice president and financial advisor at Wealth Enhancement Group on Long Island, said in an email.
“The reason for this penalty is that state and federal tax brackets don’t always double the single-income rates for married couples filing jointly. You would see this especially with moderate-to-high-income earners who are making similar amounts of money,” he said.
Married couples who file jointly can make exactly twice as much money as single individuals before they bump up to the next tax bracket. A potential advantage lies in the flexibility for one spouse to make more than the single income limit and one spouse to make less and still benefit from the higher combined limit.
On the flip side, some tax laws are less beneficial for married couples. The capital loss deduction, for example, is limited to $3,000 whether you are single or married filing jointly. So, while there may be some drawbacks for single people, there are also potential advantages.
[Read: Married Couples: Is It Better to File Taxes Jointly or Separately?]
It’s best to speak with a tax advisor who can review your situation and optimize your savings.
Setting Yourself up for Independent Financial Success
Financial success as a single person may take a bit more work, but it is possible to achieve.
Along with the above tips, Ward suggested spending some time thinking about your future. “Where do you want to be financially in three years, 10 years and at age 85? This will help you back into prudent decisions today,” she said.
She also recommended educating yourself and reaching out to a financial professional if you need support. “Find one that you trust and that you find easy to work with. You can conduct background checks on them here,” Ward said.
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Sound Financial Strategies for Single Adults originally appeared on usnews.com
