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Key Takeaways
- Single people should build investment contributions into their budget as a non-negotiable line item, just like rent or utilities, to ensure they save for their future even when living costs are high.
- Even investing $50 monthly can grow dramatically over decades because of compounding, making it crucial to start now rather than waiting for when you have a higher income.
Living alone means all the bills fall on your shoulders. But even solo, you need to save and invest over time.
“Investing is not a luxury, it’s your ticket to a better life—even when money is tight,” Netta Stahl, a Tel Aviv-based financial coach, told Investopedia. So, how do you juggle higher costs, keep your budget in check, and still set aside money for your future? Here’s a step-by-step approach, with expert insights, to help you thrive financially on your own.
Treat Investing as Non-Negotiable
When living costs rise, the temptation is to delay investing. But, Stahl said, your “future security depends on starting as early as possible. Even $50 a month matters.”
Instead of treating investments as leftovers, build them into your budget as a fixed expense, like rent. Even small, regular contributions grow dramatically over decades thanks to compounding. Automating this process takes willpower out of the equation and ensures you don’t skip a month when money feels tight.
Get Strategic with Budgeting and Goal-Setting
Start by calculating exactly how much you need to save. Plug your goals into a compound interest calculator to see what monthly amount will get you there in 10, 20, or 30 years. “People are surprised by what consistent small steps can add up to,” Stahl said.
Adopting a zero-based budget approach means assigning every dollar a job, prioritizing essentials, and then setting a fixed amount for investing. If your budget feels squeezed, look for creative ways to adjust: Downsize your living space, get a roommate, or buy essentials secondhand.
“Your independence is your superpower,” Stahl said. With no one else to negotiate with, you control where to cut and where to splurge.
Tip
Making investing effortless is key, especially when you’re the only one responsible for finances. You can set up automatic transfers to your investment account so contributions never become a monthly decision. Use direct deposit features or apps from your broker to make this seamless.
The Bottom Line
Living alone magnifies your expenses, but it also puts you fully in control of your finances. You need to treat investing as a nonnegotiable. This way, you can pursue financial security, no matter the size of your paycheck.
“Don’t wait for more income,” Stahl said. “Start now with what you have.”
