– The first principle is that when you are single, the buck stops with you.
You’re in the driver’s seat and you make the decisions.
Track income and spending
You need to get a grip on your income and your expenses – so you’re not
spending that nest-egg on a Caribbean cruise, for example, or frittering it
away on “impulse” purchases. There are many good budgeting apps and
software packages available to help you analyze your needs and structure
your cash flow so it’s not always flowing away from you. But sometimes you
just need the human touch. A good financial planner can show you how to
afford that cruise without denting your retirement!
First and foremost, as a single person, you should be saving 10% to 15% of
your income each year for retirement. Set up your own Tax-Free Savings
Account (TFSA) and Registered Retirement Savings Plan (RRSP), and arrange
to make automatic deposits directly from your bank account. Check with your
employer to see if they offer a company pension plan or group RRSP.
Next, make efforts to increase your salary. Look for employment
opportunities that pay more then you are currently making. Upgrade with
continuing education courses or hire a headhunter to find a position where
you can make more money. Don’t be afraid to move – go where the money is!
Do you have back-up?
For successful singles, where and how you live are cornerstones of the life
you lead. Do you own or rent? A condominium? A house?
Living the chic urban lifestyle is exciting, but it’s expensive. To help
defray some of the cost, consider taking on a roommate. It might cramp your
style, but it will allow you to cut costs and free up some money for
investing and savings. This is a short-term arrangement that can help you
Do you have a mortgage? A car loan? And if so, do you have a plan to pay it
off quickly? If you become ill or disabled, will you be able to continue
living where you are, in the style you’re used to?
You definitely need to create an emergency fund worth three months of
monthly expenses. It might seem impossible, but it’s not. Set up that
automatic deposit method I mentioned earlier, and start putting money into
a Tax-Free Savings Account to cover you against the unexpected. Purchase
some disability insurance. As a single person, you rely solely on yourself
for income, and if you were to be injured or in an accident, you could be
faced with expenses you cannot afford.
Maximize any employee benefits you may be entitled to (major medical,
dental, and prescription drugs, for example), and integrate those with
carefully selected insurance products to ensure you’re fully protected in
the most-cost-effective manner possible. Check with your employer to see if
they have disability coverage for you, and if not, get some.
Get a plan, and stick to it!
Now, every financial blogger, journalist, and planning expert will tell you
that you first need to create a financial plan. But that’s one of those
obvious bits of “advice” that hardly anyone follows. It’s not hard to see
why. Some of the advice you read makes personal financial planning seem
like an exercise in a Level III CFA program. But not all of us care deeply
about income statements, balance sheets, and debt-equity ratios. So, put
off by the daunting prospect of all those debits and credits and assets and
liabilities, many singles sadly never consider financial housekeeping until
it’s almost too late. Then they find themselves with maxed out credit
cards, collection agencies calling, and credit rating at risk.
It doesn’t have to be this way. If you’re not cut out for do-it-yourself
financial management, there’s still hope! A financial planner can help you
with budgeting and cash flow, saving and investing, and risk management,
including a professional analysis of your insurance and healthcare needs.
Look for a “fee-for-service” Certified Financial Planner
(that is, someone with the “CFP” designation) in your area who specializes
in small accounts. Ask friends for recommendations or referrals. Often,
you’ll find fully certified planners at your local bank. Sometimes your
employer will offer financial planning services as a benefit. Always take
advantage of these! – Robyn
Robyn Thompson, CFP, CIM, FCSI, is the founder of
Castlemark Wealth Management, a boutique financial advisory firm specializing in wealth management
for high net worth individuals and families. Contact her directly by
phone at 416-828-7159, or by email at
for a confidential planning consultation.
Notes and Disclaimer
© 2017 by the Fund Library. All rights reserved. Reproduction in whole or
in part by any means without prior written permission is prohibited.
The foregoing is for general information purposes only and is the opinion
of the writer. Securities mentioned are illustrative only and carry risk of
loss. No guarantee of investment performance is made or implied. It is not
intended to provide specific personalized advice including, without
limitation, investment, financial, legal, accounting or tax advice. Please
contact the author to discuss your particular circumstances.