Married or single, planning your finances usually includes a partner, girlfriend, or boyfriend. At most, it would consist of your extended family, parents, or some close relative. Including your relationships in your financial planning would mean an added advantage for either one of them. If one is earning more, and the other is earning at a lesser annual package annually, the plans change and adapt.
But, practically thinking, what if one of them passes away? What if their feelings change? Or maybe they want a change of environment? It varies from one person to another, depending on their gender (especially for women), culture, environment, and situation they are in. Let’s see some of the typical everyday situations on why it is crucial for every individual to plan their finances as “planned singlehood.”
Retirement plans usually include family members. According to a recent report from the Employee Benefit Research Institute, 51% of women among women retirees who are divorced or widowed have stepped away from work earlier than planned. It implied the other 42% are married women who have stepped away from the workforce than planned.
Divorces and never-married women workers evidently have lower financial assets than married women. But both sets of people would have planned their finances considering that their partners would be with them throughout. While women who were married have an advantage in planning, that’s not the same with unmarried or widowed, or never-married women. The confidence levels of stability in life, managing day-to-day finances, saving for retirement, and ability to cover emergency expenses are much higher for married women than other women. These added advantages don’t mean that married women are always at an added advantage. There are instances when unmarried women get to concentrate on their work. Also, other women get to have a full life, possibly taking care of their health and being themselves.
When it comes to men, the statistics usually show that their savings are high when they remain unmarried. Because of the traditional norm that a man works for a living, the differences between married and unmarried men are that single/divorced/widowed man gets the upper hand. They tend to work beyond their retirement plans and potentially save more.
A couple can potentially rely on two social security incomes at the time of retirement. Meanwhile, an unmarried person, in addition to having one security number. They would also need to consider long-term care insurance as they age. Irrespective of your relationship status, due to the unpredictability of life, it is crucial to plan one’s retirement, considering that they are going to retire single. In addition, if they have some assistance by the time they retire, it would be an added advantage.
Younger generation plans
According to CNBC, certified financial planner Kathleen Rehl said, “Women are getting smarter about money, especially younger women. But still, traditionally, there may be a division of labor where the husband dealt with investments and wives dealt more with day-to-day cash.” She added, “I’ve had widows who had no idea how much they were worth.”
The younger generation seems to be ahead in their thinking, the idea of being independent and considering practical situations. Planning for an uncertain future has become important in recent times, especially during the COVID-19 pandemic. The younger generations have seen such a struggle for the first time, and people from most economic backgrounds have been impacted highly. It was the economy, nothing personal or specific, but uncertainty as a whole. The importance of personal financing, both short-term and long term is increasing.
In the earlier generations, the times were such that women either don’t work or worked to pass the time. Despite the family situation, the ideology was always that a man will work and a woman will depend on the man. Many well-appreciated women in history came out to society as a result of “need” rather than want. Previously, widowed women were seen as a figure of “pity and poverty.” However, they had to fight and come out as leaders in women’s and welfare movements. These are the women who have been driving forces for social change.
Now, the times are changing. Women’s employment rate is increasing. Despite the change, the traditional norms and thinking continue. It influences plans and thinking processes. Men tend to accept the ideology that they are going to sacrifice their hard-earning money. At the same time, women may not necessarily consider the idea of being single or spending for the family or someone else. Housing is one of the major expenses. It burns a hole in one’s pocket without proper planning of “singlehood financing.”
In India, according to a survey by Tata AIA Life Insurance, many women have failed to take charge of their personal finances. They also underscore the percentage of women that has gone ahead in deciding their finances. While financial independence is one concern in such instances, the ability to secure enough money for oneself to face the toughest circumstances in life is much needed.
People who have been dependent and turned their life into entrepreneurs by turning passion into professionalism are much appreciated but not particularly encouraged. During tough times, when a dependent woman is divorced, the ideal solution is in societal terms. Women leave the financial decision to the men in their families. In such cases, planning finances with singlehood ideology is a far-fetched idea.
By now, solid reasons why one should plan “singlehood finances.” Decision-making power is at the core of bringing this change, then considering practical scenarios. “Planned singlehood” is like the insurance planning for one’s life to be independent irrespective of the challenges in life.