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How single women can tackle the financial challenges they face

Key takeaways

  • There are several financial challenges that can specifically affect single women. 
  • Single women need to be proactive about their financial wellbeing. 
  • There are things single women can do to improve their financial wellbeing, including working with an advisor, prioritizing savings, and covering their insurance bases.

While progress has been made towards equality, it also remains true that women face more hurdles to financial wellbeing than men.

For example, the gender wage gapOpens a new website in a new window means that women tend to make less money than men. In Canada, for every dollar a man earns, a woman earns 90 cents – and if you’re a woman from a diverse background, that gap is even wider.Opens a new website in a new window A recent study by PayscaleOpens a new website in a new window calculated that over a lifetime, this can account for US$900,000 in lost earnings for women.  

There’s also the Pink Tax, which means that women often pay more than men for identical products and services, or may feel societal pressure to spend money on things – makeup, clothing, beauty treatments – that are not expected of men to the same degree.

For single women, this is all exacerbated by the fact that they’re on a single income in a world that has historically been designed for a dual income household. There’s no “discount” for being single, meaning you bear the same financial burden for costs – rent, mortgage, a hotel room – a couple may often split. As we face a rising cost of living, this disparity can feel even more acute. 

“Single income is the biggest challenge singles face, especially when it comes to mortgage or rent payments,” says Kelly Ho, CFP, CCS, DLD Financial Group. “To have a partner or even a roommate cuts your costs in half, and when you’re on your own, you absorb the entire cost. Especially over the last year or 2, the cost of these expenses and overall cost of living has increased significantly.”

Karlee Vukets, CFP, Founder, Karlee Vukets & Co. agrees. “There are typically 3 easy solutions to any financial question – earn more, spend less, or change your time horizon. if you have a dual income household, earn more gets naturally taken care of.”

There are a few other financial challenges unique to single women, including:  

  • If a woman chooses to have children without a partner, she may incur significant costs related to fertility treatment, and if she does have a child, may have to spend more on childcare as a solo parent. As Vukets points out, solo-bearing these costs can also make it harder to save for other traditional milestones, like home ownership.
  • Single people tend to make less than their married counterparts: According to a 2019 Pew Research surveyOpens a new website in a new window, single women reported $8,000 less in median earnings than their married peers. 
  • Gift-giving traditions, which means that single people often spend on celebrating their coupled friends – wedding gifts, baby showers – and may not see that reciprocated. 

How can single women overcome these financial challenges?  

The number of single people is on the rise. For example, in 2021 Statistics CanadaOpens a new website in a new window reported that 4.4 million people lived alone in Canada, up from 1.7 million one person households in 1981.  It’s something Ho has seen in her own client base.

"Many of my single female clients were in their mid-thirties when they first reached out to me. Most were very proactive and shared the same concern – they weren't closing the possibility of never having a partner, but a lot of them admitted to the reality that, I don’t have a partner right now and I need to plan as if I’m not going to have a partner,” she says. “That's what triggered them to seek out financial advice, to make sure they know what their baseline is and what they need to do to ensure that they're not going to run out of money and still thrive in their later years.” 

There are also certain advantages to handling your finances as a single woman, adds Vukets. 

“You're in complete control of your own finances, good or bad, and you don’t have to navigate the financial decisions and habits of others,” she says. “Often couples are navigating 2 different, financial philosophies and ways of doing things that we learn from our parents. How to navigate that together is a challenge for any couple, so being able to do it by yourself, without having to navigate somebody else’s history, can be an advantage.” 

Ho and Vukets shared some additional advice for this growing co-hort as they seek to build wealth and financial stability while navigating a unique set of challenges.  

Work with a professional 

“Don’t be afraid to talk to a professional. It's not scary, and if you are afraid, maybe you've been talking to the wrong ones. It's only scary because you haven’t found the right person yet,” says Ho.

Build an emergency fund 

Emergency funds are important for anybody. The financial planning rule of thumb is 3 to 6 months – either of income or expenses. If you’re a business owner, my recommendation is 6 to 12 months,” says Vukets. “Pay yourself first. So even if it’s $25, $20, $50 a month, have an automatic transfer from your checking account to your savings account every month and build that over time.” 

Cover your insurance bases 

Disability insurance is the number 1 insurance need for anyone, let alone any single person – it is a cornerstone of a financial plan. Especially when you’re young, you need to ensure your future earning ability. Most of the time this is covered through group benefits,” says Vukets.

Critical illness insurance is also important. I call these the most selfish forms of insurance where the person purchasing is also the beneficiary of the benefits, but these are important to have to protect yourself,” adds Ho. “In terms of life insurance, a lot of my clients who are single still own whole life insurance and it gives the best of both worlds because you’ve got access to cash while you’re alive and there’s a death benefit if you have people or a charitable cause you want to benefit from your estate.” 

Put 10% of your earnings toward long-term savings 

"A minimum of 10% should be going towards the long term at any given time. That’s why I think group matching plans or group pension plans are so important because you essentially get a free bonus for saving,” says Vukets. “Group savings and matching plans are what I like to call ‘secret savings’ that help you work towards that 10% minimum savings for the long-term. It comes off your paycheque so you don’t see it and often people are often surprised at how much they've saved in a year through these plans.”

Engage with your finances

“People have a tendency to avoid financial conversations or their finances in general. But engaging in your finances and taking a look at where things are is the hardest part,” shares Vukets. "Take on a beginner’s mindset, be willing to learn, ask questions, and see things in a different way.”

What's next?

  • Work with a professional to find the right strategy for your financial wellbeing.
  • Look into your insurance options, making sure you’re covered for the unexpected. 
  • If your workplace offers a matching program, prioritize contributions to ensure you’re taking maximum advantage. 

The information provided is based on current laws, regulations and other rules applicable to Canadian residents. It is accurate to the best of our knowledge as of the date of publication. Rules and their interpretation may change, affecting the accuracy of the information. The information provided is general in nature, and should not be relied upon as a substitute for advice in any specific situation. For specific situations, advice should be obtained from the appropriate legal, accounting, tax or other professional advisors.

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