Is living alone a luxury? It certainly has its benefits, from getting to choose your own furniture, wall decor and brand of laundry detergent to maintaining sole control over your finances. Living alone can also be more expensive than sharing a household with an income-earning partner—so expensive that some people think of the additional cost as a "singles tax."
How can single people overcome the cost-inefficiencies of living alone? Let's cover a few ideas for saving money and optimizing your long-term finances when you're single.
What Is the Singles Tax?
Living on your own simply costs more money. Single renters living in one-bedroom apartments alone pay an average of $7,000 more than their cohabitating counterparts yearly, according to a 2023 Zillow analysis. Add to that the cost of paying for all your own utilities, insurance, furnishings, streaming services, home repairs and so on.
There are other major drawbacks too: If you're temporarily disabled, you'll have to survive on your disability benefits alone without a second income to help keep you afloat. And if you need a vacation, you could pay hundreds or thousands of dollars more in "single supplements" for the privilege of staying in your own room or cruise ship cabin.
The good news? There are steps you can take to help improve your financial situation if you're feeling the weight of the singles tax.
1. Be Creative About Your Living Situation
If the financial burden of paying for your own place feels like too much, think about alternative arrangements that can bring your costs down:
- Get a roommate—or rent a room in someone else's place. Though finding a compatible roommate can be a challenge, splitting the costs of rent and utilities is cost-effective.
- Consider co-living. In a co-living arrangement, multiple adults share living space while maintaining affordable individual housing. For example, four individual rooms might be arranged around a common living area in an apartment building, or small individual homes might share communal living spaces in a co-living development. Co-living is not available everywhere, but it is a cost-saving alternative where it exists. Rents are typically more affordable than single, self-contained apartments, and residents say they like the social aspects of sharing a living space.
- Rent out your garage or storage space. If you have a garage, parking space or storage area you're not using, you may be able to rent it out to raise a few extra dollars. Rental apps like Neighbor, Pavemint or Stow It can make the process easier.
2. Boost Your Income
One way to compensate for a higher cost of living is to make more money. If you have the opportunity, consider working overtime, starting a side hustle, freelancing or developing a passive income stream. You don't necessarily have to double your income to see benefits. An extra $200 a month could cover your utilities and phone bill.
3. Save Aggressively
Everyone benefits from having an emergency fund. But because singles may be more vulnerable in a crisis than households with two or more incomes, the practical and strategic advantages of having money in the bank are big. Spend conservatively and stick to a budget so you can squirrel away as much money as possible.
4. Buddy Up
You don't always need a romantic partner to take advantage of deals and discounts. Find a travel buddy to share a hotel room or vacation rental. Split bulk purchases with friends; use each other to claim referral bonuses; ask if you can share family memberships even if you aren't technically "family"—just be careful to avoid violating a company's terms of service. One of the big challenges to living single is having to bear sole financial and logistical responsibility for everything that happens, planned or unplanned. Friends and family can lift some of that burden. Anyone who will take you in or otherwise cover for you is worth their weight in gold.
5. Get a Tax Advisor
There's an ongoing debate about whether singles or married couples pay more in taxes. For your individual purposes, it may not matter. Tax brackets, contribution and deduction limits, and other elements of the tax code may sometimes favor married couples, but many of these differences are minor. Instead of pondering the issue, consider working with a tax advisor. You can't change the tax code, but you can optimize your tax filings to pay the least amount possible.
6. Get a Financial Advisor
While you're at it, you might also consider working with a financial advisor who can help you build wealth over time. Learning more about investments, tax strategy and retirement planning is a great idea for anyone, single or otherwise. If you're not yet ready to work with a financial advisor, look for personal finance courses or other resources that can help you get started on your own.
7. Invest in Your Own Happiness
The relatively high cost of living single can amp up anxiety around money, driving you to work more, scrimp more and worry constantly about finances. Your emotional well-being is valuable too. So while it's great to be conscientious and manage your money wisely, it's also okay to cut yourself some slack and strive to create a life you love.
The Bottom Line
Does it cost more to live on your own? It might. Bearing the whole cost of renting or buying a home, paying for utilities and other essential costs, and managing your finances single-handedly is undeniably a challenge. But the singles tax doesn't have to stand in the way of financial stability and long-term financial goals.
Singles may want to put a little extra thought into home affordability, budgeting, retirement planning and overall financial wellness—to compensate for the additional challenges of living on your own. And because good credit can play an important role in accessing favorable rates on loans and credit cards—and even securing a lease on an apartment or house—checking your credit report and credit score is an additional measure you can take to help keep your finances in fighting shape.