Despite what your married friends or nosy great-aunt will tell you, there are benefits of being single. You get the whole bed to yourself, you can prioritize your success, you can travel on a whim, and you can spend your hard-earned money on whatever you want. You want to go to Thailand? Swipe. You want that new Chanel bag? Swipe. But although single women like having sole control over their finances, Fidelity research reveals that their confidence dips when asked about essential financial topics, like saving for retirement or creating an emergency fund. Cringe.
By the time you are 35, experts say you should have twice the amount of your yearly earnings saved, but in a new study that explored the financial planning and investing habits of single women, researchers for Fidelity Investments found that 48 percent of the women surveyed spend money without thinking about the long-term. While they admit to thinking about the potential challenges they may face, such as sudden job loss, women who have never married are the least likely to have financial safeguards in place. In fact, 47 percent of the women have no emergency fund to cover three to six months of essential expenses should they need it.
What’s more, only 28 percent of the single women have a comprehensive financial plan in place to help them budget, save more money, and pay down debt. And get this: According to a report by the American Association of University Women, women hold nearly two-thirds of country’s study loan debt. That’s a total $833 billion. Overwhelmed yet? Don’t be. There are ways to manage your spending so that you are more confident when you check your bank account.
“Women have more financial earning and decision-making power today than ever before,” Kathleen Murphy, president of personal investing at Fidelity, said in a statement. “And yet, too many limit the benefits of that power by shying away from taking control of their financial futures. As more women are staying single, and others are taking on sole financial responsibility through divorce or outliving a spouse, it’s critical that women be actively involved and invested in the financial choices that can enable them to live the lives they deserve.”
To start, Fidelity financial planners suggest logging what you own, what you owe, and what your goals are. Then, create a budget so you don’t spend more than you should on things like new shoes or drinks with your girlfriends. Allocate 50 percent of your earnings to essential like food, clothing, housing, transportation, and student loan debt; 7 to 15 percent to retirement (depending on employer contribution); 5 percent to an emergency fund.
You may also want to consider investing some of your earnings. “Today, stowing away funds in a checking or savings account is not enough to keep pace with inflation. If you’re not investing your savings, you may be losing money over time,” said Alexandra Taussig, senior vice president of women investors at Fidelity. Not sure where to start? Try an app like Acorn, which rounds up every purchase you make to the nearest dollar and invests that money for you. You won’t even notice the spare change missing from your checking account.
The rest of your earnings are yours to spend as you please (though we wouldn’t suggest throwing it away on things like this $422 leather trash bag).