NDSU Extension Service - Ramsey County


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Singles & Money

Singles & Money

Many singles fall into the trap of failing to plan financially because they only have themselves to worry about.  But waiting until one is married or in a permanent relationship to have some control over that portion of your life can have major negative consequences.

While there is a benefit to having another person to bounce ideas off of and come to a mutual decision regarding finances, whether you are married or single, the same general financial management rules apply.

Protect income. Employer-paid disability insurance typically replaces 60% of your income, but you owe tax on the benefit. A good guideline is to replace another 15% to 20% of your salary through individual coverage.

Cover future care. The current median cost of a private room in a nursing home is now $206 a day and the price is expected to rise rapidly. Pick up a long-term-care policy with inflation to help cover the costs

Plan for someone to help. Use the appropriate legal documents to assign your health-care power of attorney, which lets your representative make medical decisions for you if you cannot, as well as your durable power of attorney, which gives your representative the authority to make financial decisions on your behalf. If you have minor children, you will need to nominate a guardian for them in a legally executed will’

Pump up retirement accounts. At a minimum, you should contribute enough to your 401(k) to receive any company match. If you have cash to spare, set up a Roth IRA. You'll pay taxes on your contributions upfront, but your earnings will accumulate tax-free, and you won't owe taxes when you withdraw money in retirement

Set up an emergency fund. Aim for enough money to cover your expenses for at least six months or, in this uncertain job market, even a year

  • Pay off debts.  Singles are some of the biggest users of credit cards and as a result carry some of the largest credit card balances.  Credit card debt carries a high interest rate and can cost you hundreds of dollars if you are paying only the monthly minimum.
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