Being single can be great. Most people travel, eat well and have fabulous experiences, but you still have to be financially sound — even when living the good life. Whatever amount of money you are making sounds like a great deal when you are single. But be careful, it is easy to rack up debts and have your finances spiral out of control.
Here’s how to stay in control:
1.) Emergency Fund
Be sure you have six to eight months of expenses saved and tucked away for emergencies. I know so many people that live paycheck to paycheck and when an emergency happens they have to struggle to find the money to pay for it.
2.) Life Insurance
You may not think about this, but this is important. If something were to happen to you, who would take care of your funeral expenses or your home or condo if you own one? The leading cause of death for the those under 45 come from accidents, especially car accidents. It may seem morbid to think about, but you don’t want your parents to have to deal with the loss of a son or daughter — and incur a financial expense on top of that.
3.) Health Insurance
I bring this up because I have spoken to many singles that have what is called “catastrophic health insurance.” This is health insurance for major issues, for example, a broken leg or injuries sustained in a major accident. The monthly payment is a lot cheaper, but the deductible is really expensive sometimes as much as $1,000. It also does not cover maintenance check ups. This doesn’t make sense. Go ahead and get full health insurance coverage, the deductible will be lower and it will include health and wellness check ups so you can stay healthy.
4.) The Will
Yes, even if you are single you need a will. As soon as you start amassing assets: Purchase a home, start building up that IRA or 401k, start investing in stocks or mutual funds or start a business, you will need a will to lay out how you want everything handled, and who gets what in the event of your death.
This is the first part in a three part series, “Single & Financially Sound.” Come back next week for the 2nd part “Credit & Taxes.” Jennifer Streaks is a Financial Author, Columnist, & Pundit. Continue the conversation by following her on twitter @JStreaks or going to her website.