Home' Trinidad and Tobago Guardian : September 14th 2014 Contents SBG20 PERSONAL FINANCE
SUNDAY BUSINESS GUARDIAN www.guardian.co.tt SEPTEMBER 14 • 2014
The US has a new and over-
looked majority, one usually
identified by the lack of a
ring on their left hand. For
the first time, a majority of
US adults are single. In 1976,
the earliest comparable sta-
tistic available, 37 per cent of adults were sin-
gle.The implications of all this singleness are
enormous, especially for how Americans man-
age their finances. The single life has its perks,
but can also be more expensive and harder to
Living alone may mean never having to
share the remote, but it can also mean less
financial flexibility. Singles need bigger emer-
gency funds, and have to pay more attention
to protecting themselves with the right insur-
ance. A financial misstep can have greater
repercussions when there s no backup, says
Baltimore planner Lazetta Rainey Braxton.
One of her single clients in her 20s spent
almost two months out of work after a serious
bike accident. Only disability insurance kept
her from financial disaster.
Singles face different challenges at different
ages, though many problems overlap. Here s
a look at some of the biggest financial threats.
1. The savings crunch
Young people are getting married and having
children later. Couples who wait to have chil-
dren in their 30s end up with three big burdens
all at once: retirement planning, saving for a
house and saving for college. The solution is
to start saving earlier in their 20s, says Kather-
ine Roy, chief retirement strategist at JPMorgan
Asset Management. But it can be tough for
young single people to save anything at all,
especially while maintaining a household and
paying off student debt.
2. Planning for long-term care
The late 40s are the best time to start think-
ing about one of the biggest risks facing singles;
the likelihood they ll need long-term care. In
most of the US, a private room in a nursing
home can cost more than $100,000 per year,
according to New York Life Insurance. People
are less likely to be declined long-term care
insurance coverage in their late 40s and early
50s, Roy says. An early start is especially impor-
tant for women, who tend to live longer and
thus pay higher long-term care premiums
Singles---or married couples---who wait to
buy until they re in their 60s may find the
insurance prohibitively expensive. In the last
decade, premiums have skyrocketed and poli-
cies are covering less, warns Timothy McGrath
of Riverpoint Wealth Management.
Wealthy singles might be better off self-
insuring, or exploring alternatives like longevity
insurance. Others might be better off planning
to go on Medicaid, says David Cutner of elder-
care law firm Lamson-Cutner. In that case,
trusts can be used to protect some assets,
which otherwise must be spent before patients
qualify for the federal health plan.
3. Divorcing well
While the overall divorce rate has dropped,
it s doubled since 1990 for people over age
50. More women than men are initiating late-
in-life divorces, an AARP survey suggests.
And very often those divorces are destroying
their finances. Along with the cost of the
divorce, there s the impact of dividing assets
shortly before retirement. Many women make
the mistake of bargaining to keep the family
house, financial planners say, an asset that
can be more of a long-term burden than a
4. Sharing end-of-life plans
Too much time and money is burned in
courtrooms figuring out who should be a
guardian for sick or disabled single people,
That s why aging single people need to make
sure their documents, including power of
attorney and healthcare proxies, are in place.
Those who don t want to rely on friends or
family can hire a trustee to take on their
finances in case they re incapacitated.
The idea of dying alone can be terrifying.
But many older people enjoy the single life.
In interviews with more than 300 people living
alone for his 2012 book "Going Solo: The
Extraordinary Rise and Surprising Appeal of
Living Alone," sociologist Eric Klinenberg
found many older singles, especially women,
were just as happy and more social than mar-
Ava, a retired bookkeeper in her late 70s
interviewed for Klinenberg s book, spends
every weekend with a widower named Victor.
But she insists she has no intention of marrying
him or moving him into her apartment. "I
really don t have much much room here for
a man," she jokes. "I mean, I have no closet
space! Where am I going to put him?"
1. Less interest
Being cheap can lead to savings that really
add up like by avoiding paying interest. For ex-
ample, consider how much interest you pay
each time you make a mortgage loan payment.
By saving up money ahead of time, you can
avoid borrowing money and therefore paying
interest. For most people this may be hard for a
major purchase like a home, but by waiting or
by choosing a less-expensive home, you can
borrow less and save money on interest.
The same concept holds true for credit cards
and student loans. The more you pay for in
cash, upfront, the less money you have to bor-
row. Even if you use your credit card to make
purchases, if you can pay off the balance each
month, you can avoid paying interest.
Taking good care of your credit is another
way to pay less for credit when you do use it.
The better your credit score, generally, the
lower your interest rates.
2. No more full/list price
If you time your meals and cocktail outings
around restaurant specials and happy hour
deals, you will never even pay full price for a
great experience dining out or grabbing drinks
with friends. This doesn't mean you have to de-
prive yourself of visiting your favourite places;
it just requires paying attention to your sched-
uling. If your favourite place has a special on
Wednesday nights, you can arrange to go then,
have fun and spend less.
3. More borrowing, less buying
Another way being cheap can save you
money is if you don't buy things. This applies,
of course, to anything you are going to spend
money on. For example, by borrowing books,
music and movies from the library, you don't
have to buy them. You can also save money by
holding clothes exchanges with friends for
Being frugal almost always equates to a
greater appreciation of money and valuables.
Since you usually opt out of expensive experi-
ences and costly items, you enjoy them that
much more when you decide to indulge.
Being cheap can make you more creative. If
you have a birthday party, wedding or other cel-
ebration that you are invited to, you can still at-
tend and give a great gift. You just have to get
creative ... and often this can result in a more
thoughtful, better gift that will be remembered.
6. Recognising value
Furthermore, you really know the value of
money; being economical allows you to really
learn what a dollar is worth. You are aware that
every dollar saved is a dollar more you can use
for paying off debt or a dollar more for your
savings, vacation or your retirement fund. This
can help you avoid impulse purchases and un-
7. New skills
Since you are likely hunting for the best price
on every purchase, you know how to negotiate
and haggle your way in the world. Being cheap
also teaches you to manipulate a budget and
have a stick-to-your-guns mentality that
comes in handy in various aspects in life, from
your career to love. Learning to prioritise and
track your accomplishments is similarly benefi-
7 benefits of
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