What Single Women Need to Know About Money

A number of years ago, I wrote a book about women and money called Think Single! The title wasn't a reference to marital status. Rather, it counseled all women to think independently about their finances.

But single women do have special financial issues, as summed up by Kristan McMahon, a 42-year-old lawyer from Annandale, Va.: "It's great that I'm the only person I have to take care of, but it's scary that I have no one to take care of me. I am my own safety net."

There are more single women than single men in the U.S. -- in 2014, 53% of unmarried residents 18 and older were women, according to the Census Bureau -- and statistically, women live longer, which brings its own concerns. "Who do you ask to handle things in an emergency if you don't have a spouse or kids to back you up?" says Jennifer Robinson, a single public relations executive in New York City.

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Women who have been widowed or divorced may have access to other resources, but women who have never married are on their own. And the cost of living for a single person can easily be more than half that of a married couple. "I pay the same rent as the people next door with two incomes," says Robinson.

Women often face income and savings shortfalls as they approach retirement, says Kimberly Foss, a certified financial planner in Roseville, Calif. Foss's goal is to "get them as caught up as possible."

There's no magic bullet, so single women need to be even more focused on following basic financial advice. For example, Foss recommends that her female clients have 12 to 18 months of cash in reserve rather than the traditional 6 to 12 months. "It may take you longer to find the next job or recover from a crisis, and you have no other source of income," she says. For the same reason, disability insurance is critical for single women while they're working (see Why You Need Disability Coverage), as is long-term-care insurance or some other backup plan for when they get older.

Buying financial security can be an expensive proposition, so one of my neighbors has a contingency plan: Turn her home at some future date into a group house, à la The Golden Girls.

Start young. It's best to start to "think single" when you're young so that you can take advantage of time and the magic of compound interest. "Save, save, save," says Sheryl Garrett, founder of the Garrett Planning Network. She recommends putting 5% of your paycheck into a retirement account and 5% into a savings account. "The 10% figure is meaningful but not so painful that people can't stick with it," says Garrett. A millennial who craves experiences might be well served to take $5,000 at age 25 and open a Roth IRA before setting off on that trip around the world, advises Foss.

Robinson wishes she had been more diligent about following that advice. "I made every mistake," she says, such as cashing out a 401(k) account when she was younger to move to Washington, D.C. Now she's making up for lost ground by contributing the $24,000 annual maximum to her 401(k), including the $6,000 catch-up contribution for people 50 and older. "I'm trying to balance the financial wherewithal to be cared for later in life with living in the moment," she says, and she's sharing her experiences with the young women in her office.

McMahon did follow the advice of her parents, who "instilled great spending and saving habits." She squirreled away incentive bonuses she earned during nine and a half years of working for Verizon's antitrust practice, which gave her a cushion to leave her job. She hopes to begin a new career with a nonprofit or an association. "Healthy savings brings peace of mind," she says. And opportunities.

TAKE OUR QUIZ: Are You Saving Enough for Retirement?