You’ve likely heard the expression “two can live as cheaply as one.” While it’s not entirely true, there’s no denying that cohabitators typically enjoy cost effectiveness by sharing housing expenses like rent or a mortgage, as well as utility bills, internet, groceries, insurance, etc.

The number of single women has been rising steadily. A 2024 Statista report showed there were 8.6 million single females in Canada in 2022. It’s safe to say not all these women lived solo, but it doesn’t change the fact that women often encounter more financial challenges than men, such as pay inequities that result in lower earnings, less career advancement owing to caregiving duties, and having (on average) a longer lifespan to fund.

Without addressing these challenges, single women solely responsible for covering their own expenses could face more precarious financial conditions than those in a dual-income home. Here are some tips to help single women better manage their financial circumstances and be more confident about their future.

Work with a professional

In a Women of Influence+ 2024 survey, over 40% of respondents were concerned about their long-term financial security. These findings are concerning as the amount of wealth that women are set to control could jump in the coming years, largely a result of expected inheritances. For single women, managing this wealth effectively is key to achieving financial independence and enjoying a comfortable retirement.

However, whether it’s a lack of time or lack of confidence in financial matters, many women are hesitant about investing to build wealth. That’s where a financial planner can add value. They’ll identify each client’s unique circumstances, goals, challenges, time horizon and risk tolerance before creating a personalized plan designed to help clients spend less, save more, budget smarter and invest better.

Tailored financial advice can account for realities like living on a single income or facing gender-based obstacles to earning more money. If you’re unsure about financial management, a good advisor will carefully walk through your plan and answer your questions along the way.

Maximize tax efficiency

When living on a single income, being tax efficient will help your money stretch further. In part, this means using registered accounts like the RRSP and TFSA. RRSP contributions are tax deductible, lowering the income tax you pay (or increasing your tax refund). As well, growth and income achieved in the plan is tax deferred, facilitating faster compounding of wealth. You’ll typically access RRSP funds in retirement, at which time your tax bracket should be lower than when you worked. Since you make TFSA contributions with after-tax dollars, any growth and income generated in the account is tax free, saving you money over the long haul.

Looking to buy a home? Consider the FHSA, which offers qualifying first-time homebuyers the opportunity for tax-deductible contributions and non-taxable withdrawals. The FHSA is particularly useful for single people who aren’t pooling financial resources with a spouse/partner. And, if you’re raising children, an RESP may help you save money more tax efficiently for their post-secondary education, plus government incentives accelerate asset growth in the plan.

Bonus tips

As a single woman, you may wish to explore five other ways to enhance your financial situation:

1. Automate investing. By setting up automatic contributions to your investment account, you’ll invest methodically to build wealth, plus you won’t be tempted to use that money on non-essential expenses. It’s a way of instilling financial discipline to benefit over the long run.
   
   
2. Create an emergency fund. Relying only on your own income is extra challenging when faced with job loss or sudden repairs. An emergency fund provides some financial stability as you deal with an urgent situation.
   
   
3. Have adequate insurance. What if you became disabled or experienced a critical illness? Being on your own requires preparing well for the unexpected. Insurance coverage can help protect your finances as you focus on your health.
   
   
4. Use employer matching plans. Many companies match your RRSP contributions to a certain degree, while share-purchase programs and health savings accounts may also provide “free money” to help grow wealth. Consult your company’s HR department to see what’s offered.
   
   
5. Earn extra income. Whether you call it a side hustle or the gig economy, making more money can bolster your financial independence. It’s even better when a new income source intersects with a passion of yours (e.g., photography, pet care, fitness training).

Ask an Alterna Advisor about financial planning aimed at addressing your specific needs.