More and more people are choosing the single life (or single-blessedness) these days. And why not? For many, being single today is a symbol of freedom and allows them to pursue their passions with undivided focus.
In Singapore, 30.9 per cent of adults are single, based on data for 2017. As in other countries, more women are single than men.
However, choosing to be single comes with the territory of having to shoulder financial responsibilities on your own. This should not, by any means, be seen as a disadvantage. It simply means that single ladies have to manage their money well. This will ensure that their future, along with their present, is taken care of.
The three biggest fears of single ladies
Let’s do one thing before we get to what single women can do to protect themselves financially. Let me tell you the three biggest money worries that single women have.
- Not being able to afford to live comfortably in retirement
- Not being able to pay debts and save for the future at the same time
- Not being able to pay her bills in case she loses her job
I think any single woman would easily be able to relate with this list. But the best thing about identifying your fears is that you are able to address them, one by one. You can be proactive now and do what it takes to make sure what you fear does not come to pass.
Conquering your fears starts with changing your mindset
Number one on my list is that women, single or otherwise, need to recognise their own power.
Women traditionally see financial matters as a cause for anxiety more than men do. In fact, one-third of all single women worry about their finances, as opposed to one-fifth of all single men.
Single women also tend to think of themselves as less well-informed concerning money matters such as investing, saving for retirement and creating a financial plan than any other demographic group. This could be one reason why women don’t take charge of their financial freedom and future.
Let’s change this. Kathleen Murphy, the president of personal investing at Fidelity says, “Women have more financial earning and decision-making power today than ever before. And yet, too many limits the benefits of that power by shying away from taking control of their financial futures.”
Being pro-active about securing your financial future starts with your mindset. Believe in your own power to be able to make sure you’ll have everything you need and then actively pursue it!
So what’s a single lady to do?
I’ll keep it short and sweet. What can one do to overcome the biggest fears that single women have?
Build your safety net. As early as possible, meaning, as soon as you get your first job. However you might say, but I’m a single woman in my thirties (or older) and I haven’t started any of this yet. Don’t panic. It’s never too late. Just make up your mind to start today.
Step 1— Get your insurance plans in place.
Fellow Chartered Financial Practitioner (FChP) Lee Meng believes that health insurance should take priority over life insurance. Ms Lee advocates that each woman have three types of health insurance in place: Hospitalization Insurance, Women’s Insurance, and Critical Illness insurance. Since single women have no other financial sources than their own salaries, it’s important that they are covered by sufficient health insurance, lest an unexpected medical emergency throw them off.
I definitely agree with Ms Lee, and I’d like to emphasize how important Women’s Insurance is. Also known as Lady’s Insurance, this type of coverage comes with a comprehensive medical screening every two years. This makes sure that your body is running well, and if you do have any health issues, you’ll find out earlier rather than later.
With Women’s Insurance, you become proactive with your health—which is so essential—as well as your money. It’s a definite win-win!
Step 2—Build your emergency fund
Get your Emergency Fund settled as well. At the same time, you’re settling your insurance plans, you’ll also need to make sure you’re building up your emergency fund. Are they equally important? Well, they could be. You never can tell, especially with how unexpected life can be.
An emergency fund is the equivalent of 3 to 6 months of your monthly expenses. The thinking behind having an emergency fund is the assumption that in that amount of time, you’ll be able to find employment again. Keep it in a separate account, and do not touch it unless it’s an actual emergency. (And no, a Prada sale is not an emergency!)
What this does is effectively take care of fear number 3. You won’t have to toss and turn at night, worrying about what would happen if you lose your job. Get that emergency fund squared away and get your beauty sleep!
Step 3—Plan for your retirement
The earlier you plan for your retirement, the better. I know this may seem difficult because other financial needs will always seem to be more important. One example is paying for your home since you will have to live somewhere.
But the longer you save for retirement the more your money has a chance to grow. This is good news. Give your money time to work hard for you!
In Singapore, people are very lucky, since CPF will create a Retirement Account for you once you reach the age of 55. An amount from your Ordinary Account and Special Account will be transferred to your Retirement Account. This is designed to give you a payout every month until the official retirement age of 65.
How much that payout depends on the retirement sum set aside starting from when you reach 55, as well as the type of CPF life plan you have. At the moment payouts range from S$720 to S$2,060.
Consider your lifestyle and factor in inflation rates for when you finally stop working. If you need a primer on planning for your retirement fund, The New Savvy’s got you covered.
Instead of reinventing the wheel, let me refer to you Retirement Planning Made Easy and Ways To Guarantee Your Retirement and Plan For It Efficiently.
Final words of wisdom
If you have chosen to be a single woman—more power to you! I want to see you grow into a woman who is aware of her financial power, and is therefore unafraid of the future!Recommend0 recommendationsPublished in Money Savvy