strength of any investment portfolio is diversification.
Moreover, you’ll need a blended tax strategy. One of the ways to reduce your taxable income is to buy a home or property. The taxes and the interest on mortgage payments are deductible. This can be a challenge for singles, because they only have one salary to qualify for a mortgage, says Barlow. But often they can take advantage of first-time homebuyers programs.
Indeed, Salmon is taking advantage of the low down payments (typically 3%) and low interest rates associated with such programs. “As my salary was increasing, so were my taxes. Since I am single and don’t have any kids, I decided it was time for me to get a tax write-off,” she jests.
PREPARE FOR THE UNEXPECTED
Most people have disability insurance through their employers–most group plans cover 60% of your income, Folmar continues. If they can afford it, singles should get an outside policy that covers up to 70% (depending upon your state or individual insurance company), he says. Also, whatever life insurance plan you have at work will suffice, since you don’t have any dependents.
As a single, you have the power to determine your financial future, no matter what your current income is. Use that power to make the single most important decision of your life–investing in yourself.
To Do List
- Invest a portion of money from every paycheck you get.
- Maintain an emergency fund with three to six months of living expenses in it.
- Contribute as much as you can to your 401(k) plan.
- Cut your credit card use.
- Diversify your investments.
- Get extra disability coverage.