It is vital to save when you are single

BEING single presents some unique financial planning challenges.

Whether you're single by choice, or as a result of a recent break-up or divorce, there are a few things you need to keep in mind when managing money just for yourself.

Since you're the only one earning an income and still have bills to pay, you need to be sure that you're making the most of what you have since you don't have someone else to fall back on.

Create a budget

Budgeting is essential for anyone, regardless of their situation. Every rand you make should be accounted for and you have a clear understanding of where that money is going and how you can allocate money to fund your financial goals. If you get into a situation where more money is going out than is coming in, it's up to you to adjust your budget accordingly.

So start by creating a budget. It should be as detailed as possible without being overwhelming. Some people find it's helpful to track every cent while others find it sufficient to track things in terms of general spending categories. Do what works best for you.

Save for retirement

Your retirement rests squarely on your own shoulders. While there mighty be some supplemental income in the form of pension grant, that alone won't be enough. And chances are you might not have a pension, so it's up to you to plan for your future. If you're young and single, retirement is probably the furthest thing from your mind. But if you delay planning for your retirement by even just a few years you can find you are spending the rest of your working life playing catch-up.

The key to retirement savings is to make it automatic so you don't have to worry about it. It does not matter if you are only able to save R20 a week because something is better than nothing. The more time your money has to grow, the better off you'll be.

Emergency fund

One of the drawbacks of being single is that if a financial crisis comes up, it's up to you to solve it. If you lose your job, it means no income since you might not have a spouse or partner with a job that still brings in a little money. This is why it's so important for someone who is single to have an emergency fund.

The last thing you want to do in an emergency is turn to credit cards or take on more debt just to get through it. As with saving for retirement, the best way to create an emergency fund is to make it an automated process. By creating an automatic savings plan you can begin saving money with little effort.

Learn how to cook

How much money do you spend each year going out to eat? If you've never calculated it, I bet you'd be surprised. Consider this: even if you only spend R30 a day grabbing lunch or dinner out at a restaurant, you're spending R10950 a year.

Obviously, when you're single, going out to eat might be a regular occurrence. Unfortunately, that can also be one of the biggest strains on your budget.

So, take the time to learn how to cook meals at home. With a little practice and smart grocery shopping, you can make restaurant quality meals for a fraction of the cost. -