If you are single without children, a lot of financial advice does not apply to you in the same way it applies to married couples or people with dependents. Here are three financial topics that are very different for single people than for everyone else.
The rule of thumb here is pretty simple: if you're single, you probably don't need it.
The main point of life insurance is to support those people who depend on your income if something happens to you. For example, if you have kids, life insurance can assure they could still afford college, even if you aren't around to pay for it.
However, if you are single and have no children, no one but you is likely counting on your salary. That means a substantial life insurance policy is probably unnecessary.
If anything, it might make sense to carry a small amount of life insurance (especially if you can get it cheaply through your employer) to cover the cost of things such as a funeral. Beyond that, you don't really need it, so save your money.
If you lose your job, have unexpected medical costs, or any other costly event occurs, you don't have a spouse to help pick up the slack.
For this reason, having an emergency fund becomes even more important for single people. Experts generally advocate that you set aside money to cover at least six months' worth of expenses, so make sure you realistically estimate how much it would cost you to live for half a year.
You'll need to account for your rent or mortgage payment, groceries, utilities, car payment, gas, laundry, and your recurring bills (like credit cards), just to name a few expenses. Make sure that your "six-month" emergency fund would actually be enough to live on for six months.
Saving for retirement
As a single man or woman, you don't have a lot of the expenses that families do. For example, you don't have to set aside money to send your kids to college, or pay the high cost of raising kids at all.
Because of this, you have no excuse for doing a poor job of saving for your retirement.
If you have a retirement plan at work, you should at least contribute as much as your employer will match, but this isn't necessarily enough. The IRS will allow up to $18,000 in elective contributions to your 401(k) for the 2015 tax year, so maybe it's a good idea to bump up your contributions.
If your employer does not offer a retirement plan, you should contribute as much as possible to an IRA each year, up to the $5,500 limit. Without an employer's plan to contribute to, you'll qualify for a tax deduction for contributions to a traditional IRA.
Finally, if you are self-employed, you have even more options, such as a SEP-IRA or a SIMPLE IRA, both of which are designed to allow self-employed individuals to save for retirement in a manner similar to a 401(k).
The point is that if you are single, no one else is going to take care of you in retirement, so it's up to you.
It's all on you
The big recurring theme here is that if you're single, you are solely responsible for your financial destiny. While this isn't necessarily a surprise, many people don't realize the adjustments they have to make to account for this extra responsibility.
However, with a little planning and some smart investing habits, you'll be financially prepared to deal with whatever life throws at you next.