A Recession Could Hit Single Women the Hardest. Here's Why

Unless you've been hiding under a rock for the last several months, you've likely heard warnings of an impending economic recession. A recession isn't outside the bounds of possibility, especially in light of the Federal Reserve's 10 rate hikes since March 2022, which have served to bring down inflation at a cost of making borrowing (and carrying variable-interest debt) more expensive for consumers. Plus, bank failures and debt ceiling debates have left many experts worried about the economy.

In short, many people are concerned, and perhaps with good reason. One group is particularly vulnerable to economic volatility: single women. Let's take a look at why, and discuss a few steps you can take to shore up your finances if you only have your own income to rely on in these troubling times.

The gender wage gap means women earn less

The first reason single women could bear the brunt of a recession is our old friend, the gender wage gap. American women earn an average of just $0.82 per $1 an American man earns, which means we're already facing a potential recession on a less-secure financial footing. Earning less money means having a reduced ability to put money in your savings account, pay down debt, and even invest for the future.

What can we do about this? Currently, eight states have pay transparency laws, meaning that employers must disclose a pay range when advertising a job opening. More states are considering these laws as well. They can impact the gender wage gap by giving women more information before we potentially waste time applying for positions that don't pay enough to meet our needs.

Beyond laws (which may or may not become a reality, depending on where you live and work), you can fight for pay equality by discussing salaries with your colleagues, researching salary data for your industry, and learning as much as you can about how to manage your personal finances. Remember, knowledge is power.

Financial independence means bearing all expenses

In addition to earning less than men, women also must absorb all the costs of financial independence if we have it. This is sometimes referred to as the "singles tax," and it means you pay all your own living expenses, such as rent/mortgage, utilities, food, and so on. In fact, Forbes Advisor recently surveyed single folks and discovered that 93% of them were painfully aware of the increased expenses of being single.

One bright spot is that the rampant inflation we've all been living with for the last year and change seems to be easing, likely thanks in part to those Fed rate hikes mentioned above. The most recent Consumer Price Index Summary report found that prices were up 4.9% over the previous year, which is definitely a positive change from June 2022, when prices were up 9.1%. Just the same, single women can ill afford the higher costs on just about everything lately, making them more vulnerable to the economic slowdown of a recession that could go hand in hand with job losses.

A few ways to protect yourself

My finances are solo, and often I feel as if it's just me (and my money) against the world. If this is your position too, the good news is that there are a few areas you can focus on to be in a stronger position should we end up in a recession:

• Increase your income if you can: This is especially crucial if you're already living paycheck to paycheck and struggling to pay the bills every month. I've been there, and there's no budgeting your way out of not earning enough. Consider a side hustle, extra hours at your regular job, or even changing jobs altogether if you're not earning enough to flourish. You're worth it.
• Pay down debt: If you have variable-interest debt, like that on a credit card, it's only becoming more expensive due to those previously-mentioned rate hikes. If you can increase your income, it's worth parlaying some of the extra into debt payoff. And if you can find ways to cut back your regular spending, chip away at your debt with the money you save.
• Pad your emergency fund: Speaking of saving money, if you're in a position to be able to put money aside, now is the best possible time to do so. Your emergency fund is your shield to keep you from going into debt for every unplanned expense.
• Add to your job skills: Finally, now is the time to become the kind of employee any employer would be lucky to have. If there's a way to gain more knowledge in your field (or to develop new skills via a side hustle), you'll be helping to shield yourself against a potential layoff if the economy goes south. You might also be able to parlay new skills into a new job.

This isn't an easy time to live through, and if you're a single woman and have made it this far on your wits and your grit, I'm proud of you. Prioritize debt payoff, emergency savings, and improving your position in your career to stay ahead of the curve.