Single-income earners may have the freedom to spend time and money on themselves, but singles should be mindful of how financial decisions may impact their personal finances. eSmart Tax’s advice to singles: Save more and spend wisely. Here are some tips to help you save:
- Pay Down Debt
Knock out your high-interest debt. Do you have a balance on a credit card with more than 12% interest? Set aside as much as you can every month to make payments on that debt. You’ll cut years off of the repayment term and save hundreds or even thousands in interest.
- Start an Emergency Fund
eSmart Tax covered this topic last month in our “Use Your Tax Return to Kickstart Your Emergency Fund” article. It’s very important for everyone to have money in the bank that’s set aside for emergencies. You’ll save yourself a ton of debt if you keep an emergency fund.
- Entertainment is an unnecessary expense. Cut back on it!
Enjoy the nightlife? Like to boogie? One of the biggest expenses of single life is entertainment. This includes going out to dinner with friends, grabbing drinks, watching movies, or going to concerts. All of these add up and none of it is cheap! Limit yourself to one or two of these activities three times a week and you could save more than you think.
- Think forward to Retirement
The earlier you begin contributing to your retirement, the less you actually have to save because interest compounds over time. While retirement may be more many years away, make sure you’re putting at least something into your 401k or into your own IRA.