For the first time ever, one-person households are the most common type of living arrangement in Canada. Because expenses are not being shared, singles are typically forced to spend more of their income on basic necessities like food and housing. In a time when costs of living are increasingly high, how does a British Columbian flying solo make things work financially on a single income? Read on for our top four financial tips for singles:
Balance that budget:
One major perk (or downfall, depending on how you operate) is that when you’re single, there is no one else to tell you how to budget your money. A balanced budget is crucial to anyone’s financial health but is even more so when you’re single! Here’s some key tactics for budget success:
- To get started with a budget, keep track of all your incoming and outgoing funds for a month, then you’ll have a realistic idea as to what you have to work with.
- If your expenses are outweighing your income, don’t rely on credit to bridge that gap – look at what you could cut, or look for ways to boost your income. Be realistic about your expenses, it IS important to include some room for fun stuff!
- You may need to get creative when looking at trimming your expenses, consider: Amping up your cooking skills if you’re eating out a lot; look at whether getting a roommate makes sense; consider how much you really need a vehicle (could you get by on car sharing or transit?).
Be honest about your finances – there’s no shame in trying to reduce costs to stay financially healthy:
Don’t get us wrong here – social events are great, but if you wind up regularly overspending or putting the costs on credit, this behaviour could add up to a debt problem over time.
- If your funds don’t allow you to participate in every function that’s presented, it’s totally OK to let your friends and family know that you’re being financially responsible and sticking to your spending limits – even if that means passing up bits and pieces of, or events altogether.
- Expect that sometimes you will need to decline events and remember that anyone wanting to genuinely spend time with you, would not want you doing so if it creates a financial problem or strain.
File your taxes:
Be sure your tax filings are always done – and filed on time!
- Government benefits for GST credits and potential MSP premium assistance can be beneficial to your budget. These small perks do add up!
- If you find yourself with a debt to Canada Revenue Agency, you’ll need to evaluate why this happened and make adjustments to how much tax is withheld from your income at source – to ensure you don’t have future surprises at tax time.
- For singles with children, there are additional government programs or benefits for you to take advantage of – it’s critical you file taxes each year to ensure you receive what you are entitled to.
A recent study found that singles approaching retirement face an average $30,000 savings deficit, whereas couples had a huge savings surplus.
- To help avoid becoming dependent on credit in retirement years, or being unable to retire – think about the ‘long game’ and make sure you’re saving something for long-term goals.
- It’s also important to allocate some money towards an emergency savings fund. If you’re on your own there won’t be a partner’s income to stretch across any unplanned periods of unemployment, or illness. Reliance on credit is often due to the unexpected!
Our most recent BC Consumer Debt Study found that 55% of respondents were without a partner – either because they were divorced or separated, widowed or single. It is common for those who are newly single to find themselves faced with paying off debt while managing new financial circumstances.
If you’re concerned about how to get out of debt, meet with a Licensed Insolvency Trustee today. We can help with several debt options, including Consumer Proposals and personal bankruptcy – and consultations are always free and confidential!
Book a free debt consultation with Sands & Associates.