Suddenly Single: Financial Considerations You Should Know

Losing your partner, whether through uncoupling, divorce, or death, can cause dramatic changes to your financial situation. It can be overwhelming to find yourself suddenly having to manage finances on your own, made even more so by the emotional turbulence of a big life change like this. But this transition also presents an opportunity to, in time, take control of your financial destiny, embrace your independence, and establish a solid foundation for your future.

What you do now can have a lasting positive impact on your future. 

In this article, we will discuss some challenges that come with a sudden switch to a single income – and some relative advantages, too. Financial stability may seem far off, but with practical planning and intentional living, it is attainable. We’ll help show you how.

Financial Challenges of Being Suddenly Single

• Managing living costs after loss of an income

• • • First thing’s first: you’ll need to reassess your budget. Start by making an honest assessment of your new income level and your required expenditures like rent and regular bills. From there, you’ll have an accurate picture to base budgeting decisions on.

• Reduced financial stability due to asset division

• • • This is a time of rebuilding for you, so you’ll need to focus on the foundations first. Start building up your emergency savings and assets gradually to regain stability.

• Increased caregiving costs

• • • It’s likely you’re not only responsible for your own financial responsibilities, but also for the care of others like children or elderly parents. Caregiving costs can become more of a burden when shouldered alone, but there are options to help you move forward like government and community assistance programs.

• Reduced ability to take financial risks without a safety net

• • • With a tighter budget, tying up cash in investments or retirement funds may feel risky, but it’s important to keep future planning in mind while rebuilding your present finances.

• Difficulty changing spending habits

• • • Adjusting to a new financial reality is easier when you take an honest look at your spending decisions and make a new budget you can stick to. 

• Limited discretionary spending due to decrease in resources

• • You may have to forgo some immediate luxuries for now, but as you grow your financial independence, know that austerity won’t last forever. It’s important, however, not to deprive yourself of fun while you’re going through this. Look for lower-cost activities that will help you gain a sense of balance and support. 

Benefits of Being Suddenly Single

• Complete freedom to make financial choices

• • • For the first time in a while, your choices are entirely your own. You won’t have someone else making financial decisions with you that is as vested in your finances as you are. This new freedom can be a lot to handle at first, but if you face it head-on with clear intentions, it can also be incredibly empowering. You can make it so your financial decisions align with your new personal goals and also your specific values, if they weren’t before.

• Potentially decreased expenses

• • • While the loss of a second income does come with many immediate challenges, it also presents you with opportunities to streamline and save. Some expenses, like groceries, rent, or insurance, may now be reduced, allowing you to simplify your financial life and reallocate funds into goals that you alone define.

• Possible change in risk tolerance

• • With only your own financial future to consider, you might feel different about how comfortable you are with taking calculated risks in your investments. Talking with your financial advisor about how your portfolios are allocated is a great first step to reimaging your future.

Tips for Financial Stability When Single

• Create a comprehensive financial plan and budget.

• • • Develop a detailed plan that outlines your income, expenses, assets, and liabilities, and budget out how much money you need to cover your expenses in the short- and medium-terms.
    • Consider various scenarios, including changes in employment and unexpected expenses, to ensure long-term financial stability.

• Build an emergency fund. 

• • • Set aside enough money to cover 3-6 months of essential living expenses to cushion against unforeseen financial shocks.
    • Keep this fund in a readily accessible account like a high-yield savings account to ensure you can quickly access it in case of an emergency.

• Increase your financial literacy. 

• • • Educate yourself on key financial topics such as investments, tax planning, and estate planning to make informed decisions.
    • Attend workshops or webinars, read financial literature, or consider taking courses to deepen your understanding of these critical areas.

• Review and update beneficiary designations.

• • • Check and update the beneficiary information on your retirement accounts, life insurance policies, and other financial assets.
    • Ensure that your beneficiary designations reflect your current wishes to avoid legal complications in the future.

• Reevaluate long-term care and disability insurance.

• • • Assess your need for long-term care and disability insurance to protect yourself from potential future health-related financial burdens.
    • Compare different policies and choose coverage that fits your current situation and potential future needs.

• Maximize retirement savings contributions.

• • • Contribute to your retirement accounts to build a secure financial future.
    • Take advantage of employer matching programs and tax-advantaged retirement plans to maximize your savings.

• Develop a support network. 

• • Cultivate a strong personal support network of friends and family to help you navigate emotional and practical challenges.
  • Build relationships with trusted financial advisors, accountants, and estate planning attorneys who can provide expert guidance and coordinate on your behalf.

Final Thoughts

Big changes like this are hard. It can be easy to let go of the reins of your financial life while trying to manage the emotional fallout you’re experiencing. Even though it might feel impossible, taking charge of your finances now can actually be empowering and help you weather this storm a little easier.   

This moment marks the beginning of a new chapter where you can redefine your financial goals and priorities. Recognize that this will be a stressful period. Focus on addressing only the most urgent financial concerns first. Give yourself the time and space to heal before facing the less-pressing financial decisions.

Take this period in your life one step at a time. And remember to seek support and give yourself grace as you navigate this transition. The more help you have now, the better off you’ll be on the other side of this.

For the last quarter-century, the professionals at SK Wealth have perfected The Integrated Financial Advantage™, a unique financial planning approach crafted to provide our clients with personalized guidance so they can live with intention both tomorrow and today.

Click here to find out more about SK Wealth’s specialized financial planning and investment management services.