Budgeting can be difficult, but budgeting as a single woman is even harder. Budgeting for yourself requires you to budget your time, your money, your desires and so much more.
This blog post has tips on how to budget for a single woman with various budgets in different areas of your life. Plus these are some great financial tips that will help keep you on track with managing your money successfully.
This is a guest post from Kim, a committed bachelorette and personal finance loving cat mom!
(This post contains affiliate links. If you click on a link and make a purchase, I may make a small commission at no extra cost to you. As an Amazon Associate I earn from qualifying purchases. You can read more here)
how to make a monthly budget for single woman, man or person
Creating the ideal budget for single women is in truth no different to what is needed for any singleton. You only have the one income to spend.
You are responsible for every single dollar that is spent, whether that is on fixed expenses, shopping, taxes or investments.
How do you save for retirement, buy a house, or even pay off your debt without that sweet second income?
It can be done and this is how.
Take inventory of how you spent your monthly income last month
The first step toward creating a budget for single woman is to take stock of how you used your money last month.
You need to know how you have been spending money before you can allocate money to the right categories going forward.
This includes the following:
- How much did I spend on food? Utilities? Cable TV and Internet access? Electricity, gas, oil for heating or gasoline for my car?
- How much did I fork out going out with friends? Going to the movies, theater or concerts?
- Did I go on any vacations last month and if so how much was that expense?
- Do I have debt? If so how much do I owe in total on each credit card?
You need a clear picture of where your money went before you can create a budget because it is important to know what expenses are fixed and what expenses you can budget for and change at any time.
After taking inventory of your monthly income and spending it is important to decide how much money you will budget for each area in the future.
types of personal budgeting methods You’ll want to use
There are a few budgeting methods that can work for you. Choose the one that you feel is going to help you to balance your monthly budget both now and in the future. And of course it needs to feel easy to follow!
Budgeting using percentage breakdowns
The first is the 50/30/20 budget method which is a very popular, simplified way to track your spending and debt.
What is the 50 20 30 budget rule? The 50 20 30 rule was made popular by Senator Elizabeth Warren who was keen to simplify financial planning for everyone regardless of income.
It basically means that 50% of your money will go to fixed expenses, 20% is reserved for savings and repaying debt. The remaining 30% is for you to spend however you please.
That 50% category includes rent, minimum debt repayments, car payments, food, car insurance, utility bills. Basically everything that you are required to pay out for and you need in order to survive.
The 20% should go towards your emergency savings, investments, retirement and extra money for paying off more than the debt minimum repayments.
The final 30% category is for you to spend however you please.
Why I don’t like the 50 20 30 rule
Personally, I don’t like this method because the categories are skewed in my humble opinion. If you’ve got debts, spending 30% of your income on wants and unnecessary things is not sensible.
You should be aiming to be debt free so more money needs to be in that 20% category. You still need some fun money but not 30%.
For example: If your job pays you $2000 a month after taxes, 30% of $2000 is $600 of free spending, on anything you happen to fancy buying.
Whereas you only have $400 (20%) to pay off your credit card, build a savings pot of three to six months of expenses and throw into an investment account for your old age!
The method that many financial professionals prefer, is a simple spreadsheet that allocates all of your income to one or more spending categories. You give every single penny you earn a job so you don’t view it as extra monies to go spending with.
A zero-based budget is what I recommend for single people. It forces you to allocate any extra income that comes along right away instead of letting it sit in your checking account.
How do you use the zero budget? Basically, you start by allocating money for your fixed expenses like rent, utilities, rainy day fund and groceries.
Then when all of those are taken care of, you can budget what’s leftover to pay off your debt in full plus any emergency savings or investments that you want.
The zero-based budget is a very powerful way to force yourself to save money because it makes sure to budget for debt repayment and savings before you splash out.
The reverse budgeting approach
I recommend budgeting using a reverse budgeting approach. I have used this method for a long time because it makes budgeting simple.
It’s all about paying yourself first (that’s your future self) so you set goals for saving and spending according to what you want to achieve in years to come.
Once this important step is done, figure how much you are going to save every week or month for each of your goals.
For example; you might want to create a goal to pay for an exotic vacation next year. You’d set up a separate savings account and figure out how much you need to set aside each month into that account.
Once your savings are budgeted for, allocate the rest of your income to your living expenses, rent, bills and discretionary spending.
A budget is only as good as you sticking to it so don’t plan to save money for all your goals if you can’t manage what’s leftover in the discretionary budget!
Budgeting with the envelope or cash system
Another budget method is one called the envelope budget system. It is also known as cash budgeting because you budget cash to pay for things instead of using credit or even debit cards.
The envelope budget method is very popular because it’s simple and easy to follow. You can’t overspend when you use cash and there’s no need to worry about getting into debt.
But it doesn’t work so easily with online budgeting software or budget apps although it can be done. It requires you to track much more which in my view negates the simplicity of the system.
The envelope budget system works by using cash for everything that is not set. So you wouldn’t pay your mortgage, credit card bill or car insurance this way. They still get paid via your bank account.
But all those transactions you use your credit or debit card for, they are where you stop using plastic and start using cold hard cash.
I have a detailed post on using the cash envelope system which I would encourage you to read. But in summary, work out which budget categories you could switch to the envelope system. Common categories are:
- Transport costs
- Household items
- Fun money
Then draw out the exact amount of money you need for each of your envelopes to see you through to your next paycheck.
Track all your transactions for your budget categories on the back of the envelope and use only the money inside it for that category.
Once the envelope is empty you should spend nothing more until payday when you can replenish your envelopes.
how to Create a budget FAQs
how should a beginner budget?
The key to budget as a singleton, is the same as for couples, you just need to get started. Choose a method that’s going to work for you. You can always swap to another if you don’t like the first one.
For more help and budgeting tips check out my post on budgeting tips for beginners.
how much money to allocate to your budget?
All of it!
Seriously, never leave anything unaccounted for because it will just get lost in the ether. This is why I also enourage you to track everything that happens with your dosh. What, when and where you spent it.
What budget category to use?
The budgeting method that works best will depend on your income, budget and spending habits but either way remember these three steps:
- take note of how you spent last month,
- decide what expenses you will have this month (some are fixed and some are flexible)
- create a budget plan to follow this month
Why is being single so expensive?!
Being single comes with a whole range of expenses. You don’t split bills and rent, you can go out more and eat at home less plus the fun budget is all yours to pay. Your utility bills, internet and cable all cost similar to those of a couple, but there’s only one income to fund it.
Being single is expensive – you need to budget like hell if you want to keep your finances in check.
How much should a single woman have in savings?
The amount of savings you should have at any given time depends on how stable your income is, what your financial plans are and the stage of life you are in.
Whatever life stage you are in, if you’re still working then having 6 months of expenses in an emergency fund is a great first step. If you lose your job you will be truly thankful for that fund.
Creating a series of sinking funds to cover your irregular expenses is also extremely practical.
I have always craved the idea of financial wellness where you don’t have to worry about your finances. So budget for the worst and hope for the best.
what is a good budget for a single person?
The simple answer is, the one that you create, own and stick to. If you are a spreadsheet whiz using the envelope budget system may well not work for you. Whereas if you have been using your credit card way too much it might be exactly what you need.
Money tips for singles
Here are a few tips to help you not only create the perfect budget for you but to also keep it going and make it work for you both now and in a few years time.
Pay your fixed expenses first
Mortgages must be paid, insurances must be paid. Make sure all your fixed, important expenses are paid, before you start thinking about what else you want to be spending out on.
Be aware of variable expenses and irregular ones
Not every expense is conveniently monthly. Some are yearly, quarterly or even bi-monthly. You need to know about these expenses and plan for them. Use sinking funds to set aside funds for when the bill pops up.
Make debt repayment a priority
Debt costs you dear. The interest on many credit cards and loans can top 20%! Get rid of high interest debt ASAP.
Set financial goals
Everyone works better when they’ve got goals or targets to aim for. Same goes for your finances, set goals and see yourself striving to meet them.
Find an accountability partner
An accountability partner is someone who knows what you are triny to do and keeps you accountable. You’ll succeed much more easily when you have to explain yourself to someone else.
Make sure you have insurance
When you’re single, you don’t have another paycheck to rely on. You need insurance! Unemployment, critical illness etc.
Build your emergency fund
If you don’t have one set up yet, today is the perfect day to do so. Start with $1000 and then continue to build it until it has 3-6 months worth of expenses in it.
Save for retirement
Social Security is not something you want to rely exclusively on given it’s not that much each year and who knows if it’ll still be around for you when you retire?
Saving for your own retirement just makes sense. Grab your employers company match but do more than that. A Roth IRA or a SIPP (UK) are two retirement savings vehicles to investigate.
Learn about financial planning
You’ll know more about retirement planning if you invest in your own financial education. You are reliant upon you and no-one else.
You need to understand your finances. Personal finance for women is a little scary when just starting out but it’s so important! Read books to improve your knowledge. These are my top 4 recommended books.
Budget for single woman, man and all
To create a successful budget as a single woman, you need to first decide which budgeting method is best for your lifestyle. Each of the different approaches we’ve covered has their merits and drawbacks.
Choose the one that sounds most appealing or makes the most sense based on your situation. Once you have chosen an approach, keep in mind that it will take some time before it becomes second nature- so be patient with yourself!
The key to successfully following through with any system is sticking with it long enough for it to become habit forming. I hope this helps you find success in establishing a plan that leads you towards financial freedom!
Start taking back control of your money by grabbing your copy of the Money Saving Starter Guide today.
Come and follow me on Pinterest for more money saving hints and frugal tips!
Last Updated on 20th September 2021 by Emma