25 February 2022

6 tips to help cash-strapped singles achieve their financial goals

25 February 2022

Single people might be particularly affected by rising living costs, as bigger chunks of their income are often put towards regular bills.

Official figures show Consumer Prices Index (CPI) inflation reached 5.5% in January, the highest level since March 1992.

People living alone spend an average of 92% of their disposable income, while two-adult households spend 83% of theirs, according to Office for National Statistics (ONS) analysis of 25 to 64-year-olds released in 2019.

Tips for single people to help their money go further (Alamy/PA)

Those living on their own are more likely to be renting, and feel less financially secure than couples without children, the ONS said at the time.

Recent research from Zoopla (zoopla.co.uk) found private sector rents are now £62 per month higher on average than when the UK coronavirus lockdowns first started.

With less cash to spare, it can also be harder to put anything away into savings.

With these issues in mind, Al Ward, head of digital investing at abrdn (abrdn.com) has some suggestions to help single people hit their financial goals…

1. Review your outgoings

Ward suggests: “Check through your bank statements to see exactly how much you are spending and when. Then choose an amount you can realistically afford to save each month, and set yourself a specific goal that will allow you to measure your progress and check if you are on track.

“There are many free money management apps you can download onto your phone that could be a convenient and powerful way to track your saving and spending habits and think about money in the right way. Alternatively, some banks provide useful online tools to keep tabs on your spending, so it’s worth seeing what your bank offers.”

Reviewing all your outgoings could help you to decide how much you can realistically save each month (Joe Giddens/PA) (PA Archive)

2. Check your entitlements

Entitlements, such as council tax bill discounts, could help some single people make their cash go further.

“You may only be saving a small amount every week, but every little helps and could amount to a larger saving over time,” says Ward.

Having a water meter fitted could also help to keep costs down. It may also be worth looking at any water-saving gadgets, such as showerheads and tap inserts, to help you save money in the long run.

3. Find out what help is available to get on the property ladder

Trying to save enough for a deposit at a time when house prices have increased by around £24,500 in the past year alone, according to figures from Halifax (halifax.co.uk), can feel like an impossible dream.

But there may be some schemes which could help. Lifetime ISAs, which can help people saving for their first home, are available across the UK.

Ward adds: “Don’t forget there are plenty of government schemes to help you out.”

There have also been recent signs of lenders expanding initiatives for people with smaller deposits. For example, Nationwide Building Society (nationwide.co.uk) recently expanded the availability of its Helping Hand mortgage for first-time buyers to people with 5% deposits.

4. Set up an emergency fund

You may not have a big cash lump sum to put away, but by saving small amounts regularly, you can still build up a savings buffer over time.

Ward says: “Although saving rates might be low, easy access accounts or ISAs can be useful for this sort of thing. You may not see a huge amount of growth, but it means the money is accessible if you do need it at a moment’s notice for an emergency – such as your car failing its MOT, or a new boiler.

“When choosing where to put your emergency savings, consider what else you might need from your account, like unlimited or flexible withdrawals, easy access and online banking.”

5.  Consider investing for longer-term goals.

Ward says: “Kickstarting your investment journey doesn’t require a large sum of money or a wealth of investment knowledge. You can open a stocks and shares ISA with a ready-made investment option from just £1, and can then invest whatever you want, whenever you want, up to a maximum of £20,000 a year.”

Bear in mind the value of investments can go down, as well as increase.

6. Finally, don’t be afraid to ask for help

If you’re struggling with money worries and dilemmas, it can help to speak to someone else – whether it’s a trusted friend or family member, a debt help charity or a financial adviser, depending on what the issues are.

Ward says: “Conversations about money can be difficult. But speaking out to a friend or family member can ease the burden, and help you realise that everyone carries their own financial worries.”

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