How Should a Single Person Build a Financial Plan?

Financial planning is an integral part of our lives. Single people who are solely responsible for their financial decisions may encounter certain challenges that don’t always apply to couples. It’s important to be aware of these roadblocks as you consider your future. At Harvest Wealth Partners, we are dedicated to helping you navigate these challenges and create a financial plan that aligns with your goals. Contact our team for individual financial planning services.

Start Planning for Retirement Now

First and foremost, preparing early for retirement is crucial. As a single person, you are relying on a singular income to support your retirement needs. Contributing to your employer’s 401(k) plan or setting up an Individual Retirement Account (IRA) can make a difference in the long run.

It is often beneficial for single individuals to contribute at least enough to receive their employer match and, if possible, contribute up to the maximum amount allowed per year. Tracking your savings and expected retirement expenses will allow adjustments to be made if necessary, such as increasing your contributions when possible.

Building an Emergency Fund

Living on a single income can present challenges, especially during emergencies. Therefore, contributing to an emergency fund is a wise idea. It is recommended to have three to six months’ worth of living expenses saved in an easily accessible account. However, as a single person, you might want to consider increasing this to nine to twelve months’ worth of expenses.

Preparing to Buy a Home

Owning a property is a dream for many. However, it is important to work with a mortgage loan officer who can guide you through the process and help you find a suitable mortgage plan for your budget. Buying a home with mortgage payments that fit into your existing budget is key, and having funds set aside for unexpected expenses will support long-term financial health.

Insurance Options

Preparing for the future is a matter of conserving your assets. Paying attention to disability insurance coverage is crucial as it covers an extended time away from work. Additionally, consider investing in long-term care insurance to cover expenses if you need in-home care or have to move into an assisted living facility or nursing home.

Naming Your Beneficiaries

Without a spouse or children, estate planning can be less straightforward for single individuals. If you don’t write a will, the state’s inheritance laws will determine the distribution of your assets. Therefore, it is essential to specify in writing who you want to inherit your estate and revisit your will and beneficiaries.

Harvest Wealth Partners encourages single individuals to designate a power of attorney to make financial decisions on their behalf in case they are unable to. Similarly, designating a healthcare power of attorney to make decisions about medical treatment is also crucial.

Contact Our Financial Planners

Living single presents various challenges, but it can also be rewarding and empowering. By considering these suggestions for long-term planning, you can prepare for unexpected challenges, build your assets, and create a strong financial future.

At Harvest Wealth Partners, we are committed to guiding you through this process with personalized service, focusing on your individual needs, wants, and financial goals. Contact us today to take the first step toward your financial future.