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Money saving tips for singles at every age

If you’re single, you may have to take extra time with money management, planning for the future and learning to budget and invest. Here are some things to consider at every age.

Saving for retirement, unexpected emergencies, a house down payment, college funds: There are lots of pieces to a well-balanced financial life. If you’re single, you probably spend a lot of time thinking about all of these things by yourself. That’s why starting out and making progress through every stage of life is so important. Focus on the priorities for your age.

In Your Twenties

Benchmark: save 25% of your overall gross pay

Habits: build savings and investments, pay down debt and establish lifelong financial habits

Use the 50-25-25 rule to allocate income

  • 50% essentials — rent, groceries, bills
  • 25% spending and debt — eating out, vacation, shopping, student loans
  • 25% saving — personal savings, investments

Prioritize

  • 401(k) — contribute enough to receive the maximum employer match
  • Emergency fund — start by saving $1,000, then build up to 3–6 months’ worth of expenses
  • Roth IRA — qualified withdrawals are tax-free in retirement

Pay down debt

  • 1st — start with high-interest debt: pay more on credit cards; make minimum payments on loans
  • 2nd — pay down low-interest debt: increase the amount paid to student loans and car payments

In Your Thirties

Benchmark: save 1x your current salary

Habits: monitor spending and build retirement accounts

Adjust your budget to accommodate goals

  • Down payment on a home
  • Child’s college fund
  • Bigger retirement goals

Prioritize

  • Retirement — set a goal of saving 15% of your income
  • Emergency fund — maintain 3­–6 months’ worth of expenses
  • Rethink insurance — more assets may equal the need for more coverage, such as disability and life insurance

In Your Forties

Benchmark: save 3x your current salary

Habits: focus on maximizing income

Use the 70-20-10 rule

  • 70% expenses — anything you spend your money on
  • 20% saving — emergency fund, child’s college
  • 10% debt — mortgage, etc.

Prioritize

  • Retirement accounts — consider a Roth IRA; it offers tax-deferred growth and qualified distributions are generally tax-free
  • College savings — consider a 529 College Savings Plan for college expenses
  • Debt — work to pay off your mortgage, student loans, credit card debt, car loans, etc.

In Your Fifties

Benchmark: save 5x your current salary

Habits: gear up savings routines that you established earlier in life

Prioritize

  • Retirement accounts — take advantage of catch-up contributions and avoid early withdrawals
  • Medical savings — maximize a health savings account
  • Income — consider working longer, even if it’s part-time

In Your Sixties

Benchmark: save 10x your current salary

Habits: pay close attention to expenses and stay focused on savings

Prioritize

  • Retirement — plan withdrawals in order to avoid additional taxes
  • Social Security — claiming benefits at your full retirement age could result in a 30% increase compared to claiming at age 62

The information in this article was obtained from various sources not associated with State Farm® (including State Farm Mutual Automobile Insurance Company and its subsidiaries and affiliates). While we believe it to be reliable and accurate, we do not warrant the accuracy or reliability of the information. State Farm is not responsible for, and does not endorse or approve, either implicitly or explicitly, the content of any third party sites that might be hyperlinked from this page. The information is not intended to replace manuals, instructions or information provided by a manufacturer or the advice of a qualified professional, or to affect coverage under any applicable insurance policy. These suggestions are not a complete list of every loss control measure. State Farm makes no guarantees of results from use of this information.

Neither State Farm nor its agents provide tax or legal advice.





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