Is the Single Life Costing You More Than You Think?

While being single can have many perks (you can do what you want when you want) it can be more expensive than you realize. Couples can split everyday expenses, receive tax benefits, and get better deals on their insurance policies.

Here’s a look at all the ways being single is costing you and what you can do about it.

Housing

Let’s start where you live. For most people, housing is the largest expense. If you’re living alone, you’re probably paying a lot more than your coupled up counterparts who can split the cost of rent or a mortgage.

An analysis from Renthop found that single people in New York City and Miami may spend more than 50% of their income on rent, assuming they earn the median income for singles in the area and pay the median price for a studio apartment.

“Sharing a home can be the single biggest lever for lowering costs. Renting a two-bedroom with one roommate often cuts monthly housing and utility expenses by 35 to 50% compared with renting a studio alone,” says Bob Wolfe, a certified financial planner at wHealthyFP.

To save money on housing, Wolfe suggests renting out a spare room or buying a duplex and living in one unit and renting out the other. You’ll have privacy in your unit and an income stream from the other unit.

Taxes

When it comes to taxes, there’s a lot that singles miss out on.

“Single filers often lose out on favorable tax brackets, deductions, and credits available to married couples,” says Christopher Stroup, a certified financial planner (CFP) and founder of Silicon Beach Financial.“The ‘single penalty’ can be especially harsh for high earners.”

Stroup advises singles to be proactive with their taxes. “Maximize all available deductions (e.g., SEP IRA or Solo 401(k) for business owners), and consider charitable giving or donor-advised funds to lower taxable income strategically,” he says.

Insurance

Couples have the advantage of coordinating their insurance and workplace benefits.

“For instance, a couple might find that one person’s medical coverage is more affordable for both people, but the other partner’s dental and vision insurance is better. People can compare and choose the best fit,” said Samantha Mockford, a CFP at Citrine Capital.

Singles have to shop for insurance on their own and it can cost them.

“Multi-person health plans, auto policies, and even cellphone plans often deliver lower per-person rates. A solo policyholder pays the full administrative load alone,” Wolfe says. “Ask carriers about ‘bundles’ that allow unrelated adults at the same address to share discounts. Some insurers quietly offer this for domestic partners or roommates.”

Retirement

Singles are responsible for their own retirement savings and expenses, as they’re unable to rely on a partner’s Social Security income, pension, or retirement accounts.

“Without dual incomes or spousal Social Security, singles need to save more aggressively and plan for longevity risk. Retirement income strategies must account for one Social Security check and no shared household expenses,” Stroup says.

Singles should emphasize saving for their solo futures. “Max out tax-advantaged accounts like Roth IRAs and HSAs,” Stroup said. “Also, consider a long-term care insurance review to protect your future independence.”

Everyday Expenses

Couples even have the advantage at the grocery store and when shopping for streaming services.

“Grocery stores and streaming platforms reward buying in bulk or family plans. Team up with friends or roommates to split warehouse club memberships, meal kits, ride-sharing, or subscription bundles,” Wolfe said.

The Bottom Line

There is much to like about the single life, but higher costs are not one of them. So, make moves to save money and slash some of your higher expenses. Housing is a big cost, but sharing with a roommate is a great way to save money. Save on taxes by maximizing your deductions, and if you itemize your deductions, you could lower your taxable income by giving money to charity. Even everyday expenses can be more expensive when you are single. Work with friends to save on everything from streaming services to meal kits.