I don’t remember ever making a conscious decision that I was going to build my financial life around one income forever. I wasn’t spending money assuming that eventually a partner and a second salary would arrive either. I think I just didn’t plan particularly hard for either possibility.
There is a difference between those things that I probably wouldn’t have appreciated when I was younger. You can be financially independent in the sense that you work, pay your own bills and support yourself without necessarily thinking very far ahead about what happens if you are still the only person doing all of those things in 10, 20 or 30 years.
At some point, the hypothetical future has to stop being part of the financial plan. I could meet somebody next year. I could be single for the rest of my life. Either is possible. But I can’t make decisions today based on the salary of a person I haven’t met.
That doesn’t mean I think being single is financially harder in every respect. I don’t have children whose education I need to plan for. I make financial decisions for one person. Nobody else’s spending habits, debts or financial priorities have to be negotiated alongside mine. But there is another side to being the only person in the financial plan. If the income stops, all of it stops.
One income isn’t necessarily worse. It is different.
I saw this quite clearly when redundancies were being offered at work. For some people, part of the calculation was that they would receive a lump sum and their partner would continue earning while they looked for another job.
My calculation couldn’t include that. I don’t know that having a partner with a stable income would have changed the decision I made, but I know I would have given the redundancy more consideration. There would have been another layer of protection between losing my salary and things becoming seriously difficult.
Instead, I had to consider what would happen if finding another job took much longer than expected. One possibility was that eventually I might have to move back in with my parents.
I’m very fortunate that this was a possibility rather than a fear of having nowhere to go. I have family members who would let me live with them if something went badly wrong, and family who would have some capacity to help me financially for a while if I genuinely needed it. Plenty of people don’t have either of those things, and I’m very aware of the difference that makes.
Would I enjoy asking for that help? Absolutely not. I would probably have to be dragged to the point of admitting I needed it. But knowing the safety net exists still makes it a safety net.
That’s one reason I don’t think comparisons between single people and couples are particularly useful here. A married couple might have two salaries, or they might have one. They might have children, enormous expenses and no savings. Both people might be working and still living from one payday to the next. A job loss in that household could be every bit as serious as it would be in mine, perhaps considerably more so when other people are depending on the money.
The more useful question isn’t necessarily who has it harder? It’s what happens if something goes wrong?
For one person, the answer might be a partner’s income. For another, savings. For someone else, parents or siblings. It might be insurance, a redundancy payment, a second job or the possibility of moving somewhere cheaper. Some people have several of those options. Some have none.
Being single doesn’t automatically mean having no safety net. But it can mean having to think more deliberately about where yours actually is.
Housing makes one income feel very real
Nowhere does this become more obvious to me than housing.
Saving for a deposit on one income is difficult enough when you’re also covering the full rent yourself. But in Ireland, where I live, there is another fairly brutal piece of arithmetic involved. Mortgage lending rules generally limit a first-time buyer to borrowing four times gross annual income, although lenders are permitted some lending above that limit.
There are perfectly sensible financial-stability reasons for lending rules. Unfortunately, understanding why a rule exists does not make the house at the end of the calculation any larger.
In today’s market, I could maybe buy a shed.
What can be particularly frustrating is knowing how much you’ve been paying in rent and then discovering that this doesn’t simply translate into being allowed to borrow enough to buy an equivalent home. The exact mortgage systems are different from country to country, but trying to enter a housing market on one income is hardly an exclusively Irish experience.
There is an obvious alternative for single people: buy with somebody else. I actually considered buying a house with a friend when I was younger. I’ve also seen siblings buy together. It can make complete sense at the time. Two incomes, two people contributing to the deposit and a home neither might have been able to buy alone.
The difficulty is that a mortgage can last considerably longer than the circumstances that made buying together seem like a good idea. I’ve seen what can happen when one person’s life changes and they want to move on. Perhaps they meet somebody and want to buy a home with their partner, while the person remaining in the original property can’t qualify to take over the existing mortgage alone. Selling isn’t necessarily an attractive solution either, particularly if the property has fallen substantially in value.
A decision that helped two people move forward together can eventually leave both of them stuck.
That doesn’t mean friends or siblings should never buy property together. It means “just buy with somebody else” isn’t quite the simple solution it can sound like.
Sharing accommodation is simpler, of course, and if I could go back in time I probably wouldn’t have been in such a hurry to live alone. I actually quite liked sharing with someone when I was younger. There were obvious financial advantages, and at that stage of life there was nothing unusual about it.
But I’ve now lived alone for more than ten years. Part of the problem with deciding to share again is practical. At 40, you don’t necessarily have a collection of friends looking for someone to share a house with, and the thought of moving in with strangers feels very different from how it did when everyone was younger. But part of it is simply that I’ve become used to my independence. My home is mine. I like the privacy. I like being able to decide how I live in it.
If living alone became financially impossible to sustain, I would make a different decision. What I wouldn’t do is voluntarily give it up for the next ten years simply because somebody could show me a spreadsheet proving that I’d have considerably more money at 60.
Perhaps that isn’t the mathematically optimal financial decision. But I’m not sure the purpose of financial independence is to make every decision according to which one leaves you with the most money.
Some future expenses don’t have names yet
Having no children obviously changes my financial responsibilities. I don’t have to think about putting one child through university, never mind several of them. There aren’t school costs, childcare costs or all the other expenses that come with raising a family.
Research in the US reflects some of that financial difference. Majorities of adults without children told Pew Research Center that not having children had made it easier to afford the things they wanted and to save for the future.
But I think there’s another side to this that is easy to miss. A parent saving for a child’s education has a future expense with a name attached to it. The fact that they are putting money aside doesn’t mean they get to keep that money as some wonderful financial buffer. They’re preparing to spend it on something they already know is coming.
My future expenses can be less obvious. I need to think about retirement. I could lose my job. My housing situation could change. I could become ill. I might need care when I’m older. There may be expenses twenty years from now that I haven’t even considered yet.
That doesn’t mean my future is financially more frightening than somebody else’s. Parents have all of those uncertainties too, on top of responsibilities I don’t have. In fact, Pew’s research on Americans over 50 found that parents were more likely than people without children to say they frequently worried about having enough money as they aged.
Again, nobody wins the competition.
But I do wonder whether a family creates a kind of financial accountability that can be easier to avoid when the only person affected by your decisions is you. That isn’t true of everyone. Some people are naturally extremely responsible with money regardless of their relationship status, and having a partner certainly doesn’t guarantee sensible financial behaviour.
Still, there is something different about another person knowing the financial plan. There may be children whose future needs force certain conversations. There may be two adults saying we need to put money aside for this rather than one person deciding whether Future Me really needs the money more than Present Me does.
The freedom of being answerable only to yourself is genuinely freedom. It can also make you very good at negotiating with yourself.
Who exactly am I leaving all this to?
I didn’t start a pension until I was in my 30s, and at the time I felt horribly behind. I’d been unemployed before, and that experience had made me think much more seriously about wanting to be financially independent later in life.
I have life cover too, and the types of jobs I’ve had have generally come with death-in-service benefits. None of this means I’ve built up some enormous fortune, but it does mean there’s a slightly strange possibility that I could be worth considerably more money dead than I currently have sitting in the bank.
Which raises a question I probably should have answered by now: who gets it?
If I had a partner and children, there would probably be a fairly obvious answer. That doesn’t mean estate planning is automatically simple for someone with a partner and children, but there is at least a more obvious direction in which most people’s minds would go. Mine can go in several.
Do I leave everything equally to my siblings? What if one sibling is financially established and another isn’t? Should that make a difference?
Do I skip my siblings and leave it to nieces and nephews instead? If I do, does everybody get an equal share? What if I’m much closer to some than others? What if one genuinely needs the money more?
There probably isn’t a morally correct answer to any of those questions. But they are decisions somebody in my position has to make if I want to decide where things go.
A will is also one of those things that’s very easy to treat as a problem for Future You, particularly when you’re healthy and don’t expect anything to happen. Unfortunately, death has never shown much respect for people’s administrative schedules. If you don’t make decisions about your estate yourself, eventually the law makes them for you.
I should probably sort that out. Perhaps publicly admitting that will embarrass me into doing it.
The point isn’t to have the most money when you die
I think I used to understand financial independence mainly as being able to pay my own way. I still think that’s part of it. But the older I get, the more I think it also means building enough resilience into my life that one bad event doesn’t immediately remove all of my choices.
That’s harder to measure. It might mean savings. A pension. Insurance. Keeping your skills current enough that you can find another job. Having people you could call if everything went wrong. Knowing what you’d do about housing. Making a will. Perhaps even being willing to take on additional work for a while if circumstances demanded it.
Being single gives me some flexibility there too. I have more control over my time than I might have if I had children depending on me. If I genuinely needed to take a second job or try to create another source of income, there are circumstances in which that might be easier for me. Then again, in a couple there are potentially two people capable of solving the same problem.
There it is again. For almost every financial disadvantage I can identify in one kind of life, I can think of circumstances that reverse it.
So I don’t think I’ve discovered that single people need to save more, worry more or live more cautiously than everybody else. I certainly don’t think the answer is that we should spend our 40s depriving ourselves because there might never be another income.
I could save money by giving up living alone. I could probably eliminate all sorts of things I enjoy and send the money straight to my pension. Future Me might be delighted with the result.
Present Me still has to live here.
There has to be some balance between protecting the woman I might be at 70 and allowing the woman I am now to have a life she actually enjoys.
Perhaps that’s what financial independence means to me now. Not having so much money that nothing can ever go wrong, and not pretending that I’ll never need anyone. Just making sure that the financial plan I’m building actually belongs to the life I’m living.
Because somebody else may eventually become part of that life.
But I don’t think I should need them to arrive for the plan to work.