Being single gives you total control over your finances—no need to compromise on spending habits or savings goals. But with that freedom comes responsibility, especially when managing everything on a single income.
In Australia, singles often face higher living costs compared to couples. A few years ago, the ‘singles tax’ was estimated at 3.5%, but with rising rent, utilities, and general expenses, that gap is now closer to 10-15%. While managing money solo can seem daunting, smart financial strategies can help you build security and wealth at any stage of life.
Your 20s: Build a Solid Financial Base
Your 20s are about laying the groundwork for a secure financial future while still having fun. A little planning now can make a big difference later.
- Create a spending plan – Track where your money goes each month. Apps, spreadsheets, or even a simple notebook can help.
- Save for life’s surprises – An emergency fund with at least three months’ worth of expenses can be a lifesaver if things go sideways.
- Get rid of high-interest debt – Credit card balances and personal loans can drain your cash flow. The faster you pay them off, the better.
- Start thinking long-term – Adding a little extra to your superannuation early on can significantly boost your retirement savings.
Your 30s: Strengthen Your Financial Position
By now, your income has likely increased, and you have a clearer vision for the future. This is the decade to start growing your wealth.
- Look beyond a savings account – Investing in shares, property, or exchange-traded funds (ETFs) can help your money grow faster than standard savings.
- Supercharge your super – Making voluntary contributions, even in small amounts, can give your retirement fund a significant boost.
- Safeguard your earnings – If you were unable to work due to illness or injury, how would you cope financially? Income protection insurance can provide peace of mind.
- Start preparing for major purchases – If homeownership is on your radar, look into government grants like the First Homeowner Grant and First Home Super Saver Scheme.
Your 40s: Secure Long-Term Financial Stability
Your 40s are about reinforcing financial security and making sure you’re on track for future goals.
- Assess your superannuation progress – Check how your super balance compares to the average for your age and make adjustments if needed.
- Speed up debt repayment – If you have a mortgage, making extra repayments now can save you thousands in interest over time.
- Protect yourself against the unexpected – Ensuring you have adequate health, life, and income protection insurance can safeguard your finances.
- Plan for your future lifestyle – Whether you want to travel more, switch careers, or start a business, having a financial strategy can make those goals more achievable.
Your 50s and Beyond: Fine-Tune Your Retirement Plan
Retirement is getting closer, so it’s time to focus on financial security and maximising your savings.
- Boost your retirement fund – Take advantage of pre-tax and after-tax super contributions while you’re still earning.
- Eliminate outstanding debts – The less you owe, the more freedom you’ll have when you retire.
- Think about downsizing – Moving to a smaller home or shifting your investments could free up funds for the lifestyle you want.
- Understand your retirement options – The Age Pension for singles is currently $1,047.10 per fortnight.
Managing Finances on a Single Income
One challenge singles often face is balancing financial goals with everyday expenses. It’s easy to spend more freely without the costs of supporting a family, but staying disciplined is key.
A simple way to budget is by using the 50-30-20 rule:
- 50% for necessities (rent, bills, groceries).
- 30% for lifestyle spending (entertainment, travel, shopping).
- 20% for financial growth (savings, investments, debt repayment).
If money feels tight, trimming lifestyle spending can help build a comfortable financial cushion.
Buying a Home Solo: Making It Work
Purchasing a property on your own can feel like a big financial commitment, but with the right approach, it’s achievable.
- Clear existing debts first – Paying off credit cards and personal loans before saving for a deposit improves your borrowing power.
- Determine what’s affordable – A mortgage broker or Financial Adviser can help structure your loan so it aligns with your budget.
- Take advantage of grants – Check for government incentives that can reduce the cost of buying your first home.
Protecting Your Income and Lifestyle
When you’re single, your income is your biggest financial asset. It’s important to have a safety net in place in case life takes an unexpected turn.
Consider a mix of:
- Income protection insurance – Provides financial support if you’re unable to work due to illness or injury.
- Total and Permanent Disablement (TPD) insurance – Covers long-term disabilities that prevent you from earning an income.
- Trauma insurance – Helps with medical costs and recovery if you experience a serious illness.
Building an emergency fund alongside these protections can offer additional peace of mind.
Final Thoughts
Managing money as a single person means being proactive, setting clear financial goals, and making informed decisions. Whether you’re starting your career, working toward homeownership, or planning for retirement, taking control of your finances now will give you the freedom to enjoy life without money worries.
If you’re unsure where to begin, speaking with a Financial Adviser can help tailor a plan to suit your goals and lifestyle. After all, being single means you have the power to shape your financial future—so why not make the most of it?
Any advice is general in nature only and has been prepared without considering your needs, objectives or financial situation. Before acting on it, you should consider its appropriateness for you, having regard to those factors. Before making any decision about whether to acquire a financial product, you should obtain the Product Disclosure Statement.
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