This is part of a sometimes series I wrote on my finance blog called Personal Finance in the Singular Form, wherein I speak to the sometimes unique financial needs of the single person.
Beyond Paycheck to Paycheck’s Friday Q and A today is someone asking about how they can possibly save on one income.
I’ve said it before, and I’ve said it again, if you have fourteen partners working outside the home, you still only have one income. There are fourteen streams, surely, but it all boils down to one number on the ledger.
Michael’s answer on the Friday Q&As start with ’straightforward’ and then have a more detailed explanation. But today, in my opinion, Michael’s ‘more detailed’ answer actually equals ‘more words saying the same thing as the straightforward answer, and not providing much in the way of actionable steps’.
When you’re a single person and watching all these folks around you with partners buy cars and houses and pay off crippling debt that’s more than three times what you make in a year, it looks insurmountable.
So, we go back to rule number one of Personal Finance in the Singular Form: don’t compare yourself to other people! You are an individual, with a unique financial situation!
Michael is right, though. To save, you should spend less than you earn. But before you start saving, define for yourself W-H-Y you are saving cashy money and not going out and buying pretty lipstick and comic books.
Because if you are saving for retirement, that money’s better off in an IRA or a 401 (k) [ask your certified financial advisor what's right for you] rather than a shoebox under the bed. If it’s for an emergency, you might want to look into something like a money market account or a CD. And if it’s for a sonic screwdriver, well, you might want to put it in a high-yield savings account.
And that, ladies and gentlemen, is how you save on one income.
