Is it easier to save when you’re single? This question sounds deceptively simple, but it’s not. We move though life in stages and it’s tough to compare them. I was single in my early 20’s, got married and we were a DINK couple for ten years after that, and now we have a rambunctious 4 years old son. Eventually, RB40 Jr. will be off on his own and we’ll move to the next stage. That’s the ideal progression, right?
Financial security was important to me even when I was single so I have always saved a good portion of my income. Saving got easier as my income increased because my goal has always been to keep lifestyle inflation under control. Then I learned about financial independence and I made early retirement my mission. We saved much more seriously after that. If I knew about financial independence when I was young, I probably would have saved even more when I was in my 20’s.
What if I’m single again? Would I be able to save a bigger portion of my income with financial independence in mind? Times have changed and there are a lot more tools available now to help you save and invest. It’s easier than ever to increase your income and cut your expense, but a huge portion of the population is still struggling. It’s been a while so it’s tough for me to imagine being single again, but I’ll give it a go.
Being single is the best! You can do whatever you want and nobody will give you a hard time. My knee jerk reaction to this question is – of course, it’s easier to save when you’re single! However, is that really the case? Let’s give it a thorough look and see if that’s really true.
The biggest advantage to being single is the flexibility. You can live as cheaply as you want and hustle as hard as you can. If I’m single with no kid at this point in my life, I’d probably be off seeing the world. I can flit from one cheap country to the next while making a little money online. Or I could stay in the US and can probably still save a good portion of my currently small income.
Here are some of the biggest expenses for the US household.
- Housing – Being single wins hands down. There are so many ways to live cheaply these days. You can rent a room in a friend’s home. Or you can buy a house and rent out your extra rooms. If I was single, I’d probably put a bunk bed in my spare room and rent it out via Airbnb.
- Transportation – I live in Portland, OR so I have a big advantage over most other parts of the country. I could get by with the combination of public transportation, bicycle, and a car sharing service. Alternatively, I could drive for Uber to make some extra income if I have a car.
- Food – I don’t think being single really makes a big impact on your food expenses as long as you cook at home. I’d probably eat easy to cook food more often. A grilled chicken breast with some vegetables and rice is easy to make and very healthy. I’d probably cook in big batches more often as well.
- Discretionary expenses – This is the Achilles’ heel of being single. It’s tough to be frugal on entertainment when you’re single. Going out can cost a lot of money and I’m pretty sure single people go out more than couples. Also, I’d probably spend plenty of money on gadgets, sports equipment, books, music, games, and all the other fun stuff.
- Tax – I’m not an expert, but I think single people pay a bit less tax because of how the tax bracket is structured. Unless you’re in the 10% or 15% bracket, you’ll probably pay more when you’re married. This is because the tax bracket for married couple is less than 2x of a single filer.
Cons of being single
I think the biggest challenge with being single is controlling your discretionary expenses. It costs money to socialize and have fun. Of course, there are many ways to have fun without spending a lot of money also, but many of those things are more fun as a couple.
Dual Income No Kid
Being single was great, but having two incomes can’t be beat. In the old days, being married could cut costs quite a bit because you can share your living expenses. You could practically cut your combined expense in half by moving in together. This gap narrowed quite a bit in the recent years with the sharing economy. Now, you can reduce your cost of living expenses significantly by sharing even when you’re single.
As I mentioned above, the biggest advantage of being single is the flexibility to follow your own agenda. When you’re married, the odds are slim that your partner will share your goal of financial independence. Most Americans are still stuck in consumer mode and don’t give much thought to saving money. Our national saving rate hovers around 5%, for goodness sake. If you are aiming for financial independence, you’d need to convince your spouse to get on board. Luckily, Mrs. RB40 was pretty frugal to begin with and I was able to nudge her to align our financial goals.
You also need to take your partner’s needs and comfort into consideration when you make financial decisions. For example, I’d probably refinance a lot more often if Mrs. RB40 wasn’t around. She hates all that paperwork and the inconvenience.
Let’s see how the biggest expenses look when you’re no longer single.
- Housing – Being a couple can win in just one scenario. That’s sharing a one bedroom apartment/condo. Your housing cost is optimized in that case. If you move up to a house, then your partner probably wouldn’t want a roommate or boarders.
- Transportation – If you can share one car, then that’s the way to go. Having one vehicle each isn’t optimal at all, but that’s unavoidable in most parts of the US. You’ll probably save on auto insurance when you’re married so that’s one good point.
- Food – It really depends on your culinary skills. If you can cook, then it should be about the same. However, if you eat out all the time due to the fact that you can’t cook, then maybe your partner will come to the rescue.
- Discretionary spending – I think being a couple wins here. There are so many frugal ways to have fun as a couple. You can go hiking, play board games, sports, explore the city, and enjoy various free entertainment options around town. You also need to take your partner’s feelings into consideration when you make discretionary purchases. Mrs. RB40 just told me she would spend a lot more on theater tickets, museum memberships, clothing, haircuts, and various other things if she was single.
- Tax – Singles probably wins here as outlined above.
Cons of being a couple
Now that I went through it, saving as a couple isn’t much more difficult. As long as both partners have the same financial goal, then you can work on it together. However, the hard part is to get your partner on board the financial independence train. Most people won’t be able to sacrifice today for a more comfortable future. Our culture is one of credit cards, shopping therapy, and instant gratification. It’s not easy to buck that trend and it will be even more difficult to do it as a couple.
Add a kid or two
Saving money is definitely more difficult when you have a kid or two. All your expenses will increase. Daycare is ridiculously expensive. You need more space so you probably have to move into a bigger home. The kids will eat a ton of food when they’re teenagers.
I’m sure we can all agree that adding children into the mix will be a drag on your saving rate. However, I wouldn’t have it any other way. Kids are so much fun and they keep life interesting.
We focused on the saving part of the equation today, but I’d like to give a quick look on the making money side as well. It’s much easier to hustle on the side when you’re single. You can spend your free time any way you want and if making money is your priority, then you can spend all your time on it. You can blog, drive for Uber, deliver pizza, invent a gadget, sell stuff online, and freelance. The possibilities are limitless. When you have a spouse, you really need to cut back a bit to spend more time together.
Saving is easier when you’re single
So is saving easier when you’re single? For me, I’m pretty sure I’d be able to save more because I would really optimize my finance. Mrs. RB40 said it’s easier for her to save as a couple because she’d spend more if she was single. So I guess it really depends on your mindset. Anyway, I like being a couple much more than being single. There are pros and cons, but life is much better when you have a supportive partner.
Do you think it’s easier to save when you’re single?
For 2018, Joe plans to diversify his passive income by investing in US heartland real estate through RealtyShares. He has 3 rental units in Portland and he believes the local market is getting overpriced.
Joe highly recommends Personal Capital for DIY investors. He logs on to Personal Capital almost daily to check his cash flow and net worth. They have many useful tools that will help every investor analyze their portfolio and plan for retirement.