How Single Women Can Take Charge of Their Money

Advice for single ladies looking to increase their salary, save for retirement and more.

Young money girl smiling and holding piggy bank

The financial areas of pay inequality, retirement, real estate and investments are significant for single women. 

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Long gone are the days when a woman needed her husband's or father’s permission to get a mortgage or attended college in pursuit of her MRS degree. Thanks to burgeoning careers, earning potential and a spirit of independence, the median age of a woman’s first marriage shifted to 27 in 2010, compared with 20 in 1950, according to the U.S. Census Bureau. Of course, plenty of women are content to maintain their autonomy and skip the walk down the aisle altogether. About 102 million unmarried people 18 years old or older were living in the United States in 2011, and 53 percent of them were women, the census reports.

Here’s a look at some of the financial areas single women should think about and strategies for working through them. 

Pay inequality. Single or not, women earn less money on average than men. That situation has improved somewhat in the past several decades – the census reports that women earned 77 cents for every dollar men earned in 2012, compared with 61 cents in 1960 – but it’s still a concern, especially for women saddled with high student loan debt. President Barack Obama mentioned the wage discrepancy in his recent State of the Union address, saying it’s “an embarrassment” that this is happening in 2014. Lauren Lyons Cole, a certified financial planner in New York City, says women shouldn’t be afraid to negotiate their salaries. “I’ve definitely seen single women who hesitate to negotiate, but if you don’t negotiate, that’s going to have an impact on earnings for the rest of your career.” 

Catey Hill, author of “Shoo, Jimmy Choo! The Modern Girl’s Guide to Spending Less and Saving More,” agrees. “A lot of women end up with these great grades, but then they end at the negotiating table and they lowball themselves. Once you’ve started at that lowball, your salary builds on itself, usually as a percentage,” she says.

Retirement. Statistically speaking, women live longer than men (86 years compared with 84 for men), but often they have less money saved for retirement. A report released last year by Aon Hewitt, a global talent, retirement and health consultancy, showed that the average retirement plan balance for women was $59,300, compared with $100,000 for men. Some married women might be able to bridge this gap with money from a husband’s pension, retirement savings or Social Security check, but single women need to aggressively save for retirement on their own.

[See: 6 Steps to the Retirement Lifestyle You Want.]

Depending on the client’s income and situation, Cole suggests maxing out an employer-sponsored retirement account before supplementing with an individual retirement account. “Even if they’re not completely comfortable with investments, we can focus on retirement savings,” she says.

Of course, asset allocation matters, too. “If you’re just playing it really safe, you’re not going to end up with a big enough nest egg to last you through retirement,” Hill points out.

Also consider what would happen if your health deteriorated or you had an accident and needed (often pricey) assistance not provided by Medicare. Would you expect relatives to help out? Or could you foot the bill on your own? “In many cases, there should be some discussion about the benefit of long-term care insurance,” says T. Michelle Jones, certified financial planner and vice president at Bryn Mawr Trust in Bryn Mawr, Pa.

[Read: Financial Advice for Modern-Day Cinderellas.]

Real estate. The National Association of Realtors reports that since the mid-1990s, nearly twice as many single women as single men have purchased homes. If you qualify for a mortgage (or have the cash), buying real estate can be a sound financial investment, but it should make up part of your portfolio, not the bulk of your net worth. “A lot of times women aren’t diversifying that money,” Hill says. “They’ll say, ‘I have my house to retire on.’ That’s great, but it can’t be your only savings plan.”

Cole says many female clients seek out her advice when they’re planning to buy real estate. A few of her clients have even bought and flipped properties for a profit. “They’re more excited about real estate and more comfortable with it than they are with the stock market,” she says. 

Investments. Some women, especially those who grew up in the 50s and 60s, are wary of investing money. “It goes back to their childhood years where as young girls, they were taught to cook and clean,” Jones says. “Rarely were they taught to save or invest their money, so there’s a sense of insecurity when it comes to finances.”

As a result, Jones says many women invest conservatively for fear of losing their nest egg. “You can’t just plop money into CDs,” Hill agrees. “It has to be able to outpace inflation. Without that risk, you’re not getting that upside too.” Working with a financial advisor could help determine the appropriate amount of risk given available funds, time and other factors.

[Read: Should Women Use Female Financial Advisors?]

In addition to investing, single-income households need an emergency fund for situations like a job loss or major medical costs. Jones recommends saving at least six months' worth of living expenses.