There’s lots of financial planning advice out there directed at families, particularly married couples with children. However, Statistics Canada reports that the number of Canadians marrying has decreased steadily over the last 35 years to less than 50% in 2020[i]. Many of those people may be living in a domestic partnership; however, the number of Canadians choosing to live alone has steadily increased[ii]. Add on the people who have divorced or been widowed and that makes for a lot of Canadians who need to figure out their finances with only their own income in mind.
Being single brings both freedom and responsibility when it comes to finances. Without a partner to share financial decision-making, those who are single must plan proactively to ensure financial wellbeing through every stage of life. Whether single by choice, circumstance, or transition, thoughtful planning helps ensure peace of mind and the flexibility to live according to your values.
Building a Solid Foundation
The first step for anyone managing their finances on their own is to develop a clear picture of income, expenses, savings, and debt. Creating and following a personal budget helps identify spending habits and ensures that essential needs, such as housing, transportation, healthcare, and retirement savings are covered.
Without a partner’s income as a safety net, having an emergency fund becomes even more important. Financial planners often recommend setting aside three to six months’ worth of living expenses, but singles may wish to extend that to nine months or more, especially if they rely on a single source of income.
It’s also wise to pay attention to insurance coverage. Life, disability, and critical illness insurance can provide essential protection in the event of illness or unexpected loss of income. Even without dependents, having adequate coverage ensures that debts, funeral costs, or other expenses won’t create hardship for loved ones.
Planning for Retirement
Retirement planning looks different when you’re single. Without a spouse’s income or benefits to supplement your own, it’s essential to take an active role in building personal retirement savings. This may include maximizing contributions to RRSPs and TFSAs, or participating in an employer pension plan.
Singles should also think carefully about future living arrangements. Will you be able to maintain your home independently as you age, or would you prefer to move into a community setting that offers support and social connection? Planning early allows for greater choice and financial readiness.
Health and Long-Term Care Considerations
As we age, the likelihood of needing support increases, whether medical, physical, or emotional. For single people, there may be no immediate family member available to help with care or decision-making. It’s important to plan ahead by:
- Designating a power of attorney for both personal care and property decisions.
- Updating your will regularly to reflect your wishes.
- Exploring long-term care insurance or savings strategies to help cover future care costs.
Thinking through these choices can feel daunting, but it’s important to ensure your resources are used wisely and in alignment with your values.
Building a Supportive Network
Financial wellbeing isn’t only about money. It’s also about connection. For those who are single, cultivating a network of trusted friends, advisors, and community members can offer emotional and practical support. Consider joining community groups, faith-based networks, or volunteering opportunities that provide companionship and purpose.
Engaging a trusted financial advisor can also be invaluable. An advisor can help you navigate investment options, tax planning, and estate matters, ensuring your plans reflect both your goals and your values.
Embracing Independence with Confidence
While single folks may face unique challenges, they also enjoy unique opportunities. Financial independence offers flexibility, whether that means pursuing a new career path, supporting a cause close to your heart, or planning for a fulfilling retirement on your own terms.
Careful financial planning is a way of honouring the life you’ve built and preparing thoughtfully for what’s ahead. By taking proactive steps today, you can create a future that is not only secure but also purpose-filled.
Meet with a member of our Wealth and Investment Team to discuss how a financial plan will give you peace of mind and confidence in your future! With Kindred's free Financial Health Score Calculator you can easily assess and track your financial health at your convenience.
[i] https://www150.statcan.gc.ca/t1/tbl1/en/tv.action?pid=3910005501
[ii] https://www150.statcan.gc.ca/n1/daily-quotidien/220713/dq220713a-eng.htm