Budgeting for the Single Woman

Most of the advice around putting together a budget begins with asking women to get out all of your receipts…. “don’t try to do it all in one sitting”….figure out how much “take-home” pay you make….

We’re going to assume that you know to do all of that.

The question that we most frequently get from women who are on their own – either as newly divorced, widowed, or career –focused, is about trying to figure out what to do with the amounts that are left over at the end of the month, or that have been sitting in cash, or in a GIC waiting for the right time or right advice… waiting for a PLAN!

There are many options:

  • Save
    • Retirement (RRSP)
    • Children’s’ Education (RESP)
    • Future large purchases (Car, real estate…)
    • Investment (TFSA, Open)


  • Pay down debt
    • Line of Credit
    • Mortgage
    • Credit Cards


  • Spend
    • Trip
    • Gifts to adult children
    • Luxury items


  •  Liquid
    • Emergency funds


Deciding how to proceed is a matter of know-how and priorities.   Some general rules to follow (in order of importance) are:

1.  Always have 8 months of accessible funds to cover off on living expenses.  This is to provide funds in case you lose your job, or you suddenly need a new roof or furnace, etc.

2.  Pay off credit card debts immediately.  If you don’t have available funds to do so, at a minimum consider restructuring your debt, e.g. use a line of credit with far lower interest payments.

3.  Whether or not you want to pay down your mortgage or put away money for savings is dependent on your current debt levels as well as the current interest rates.  For instance, at current low mortgage rates, carrying debt at 3% and receiving 5% in a tax deferred RRSP may make sense.

4.  Education for your children (or grandchildren) may be coming up sooner than your retirement.  In addition, taking advantage of government grants in an RESP (Registered Education Savings Plan), and investing FREE money, is very tempting.  However, be sure to dispassionately consider what you are able to afford.  You need to ensure that putting away money for your kids’ education won’t severely impact your retirement plans.  It’s one thing to delay your retirement savings or adjust them slightly, but it’s quite another creating an under-funded retirement.  This also holds true for cash gifts to children.


People don’t plan to fail.  They fail to plan.  Make certain that you are receiving proper advice, and that you have played out all of the scenarios: both numerically and emotionally.


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