Living on your own can be an exciting rite of passage that marks the start of adult life. Or it can mark the end of a relationship, a shared residence and combined financial resources. In either case, there will be some new money management choices and challenges.
According to the Vanier Institute of the Family, single-earner households are much less likely than 2-earner households to be able to handle the financial consequences of unemployment or disability.
4 tips for managing your finances on your own
1. Begin with a budget
Tracking your cash flow and being prepared for emergencies are essential to living alone. Use a budgetBudget A monthly or yearly estimated plan for spending and saving. You work it out based on your income and expenses.+ read full definition to help you cut back on expenses where you can and put more in your savings.
2. Match your lifestyle to your income
Going through a breakup? If a relationship ends and you come to live on your own, your financial situation can drastically change. You many need to consider downsizing your house and changing your lifestyle to meet your new income.
3. Choose the right housing option
One of the biggest choices you will make if you live alone is whether to rent or to buy your residence. Use these resources to help determine what’s right for you and how this decision will affect you financially.
4. Have a plan to replace your income if you need it
In 2006, 11% of Canadians aged 15 and older were living on their own, compared to 2.6% in 1951. (Source: Statistics Canada)