Staring down the singles’ penalty
Common sense tells you that people who live alone use a greater percentage of their income on regular living expenses compared to couples.
When you dissect the average person’s monthly budget, the basics include rent or mortgage, utilities, cable and Internet, cellphone, groceries, entertainment, transportation expenses, and loan payments, says Mitchell Weiss, adjunct professor of finance at the University of Hartford. “When two people come together, many of these monthly expenses would be fully or partially consolidated,” Weiss says.
Some singles view their increased costs as a penalty for living alone. For instance, at the grocery store, “single servings” of meat and other items cost more per ounce than the family-size varieties.
“There’s really no avoiding the singles’ penalty,” says Deana Arnett, senior planning consultant at Financial Planning Services in northern Virginia. “That’s why budgeting, in a lot of ways, is even more critical for single people. It really depends on how extreme you’re willing to be with budgeting and lifestyle items. It is really a matter of prioritizing and deciding how much you are willing to sacrifice.”
Once you decide where you can cut corners, living alone doesn’t have to be a burden. Here are some solutions for saving money in your budget.