February 1, 2017 / 2:28 PM / 2 years ago

Stay single to avoid somebody else's money mess

NEW YORK(Reuters) - Would you rather be single forever, or put up with a partner who is financially irresponsible?

A woman uses her Apple iPhone while waiting to cross 5th Avenue in New York, September 20, 2012. REUTERS/Lucas Jackson

For Renee Sylvestre-Williams, the choice is easy: Single.

“Being with someone financially irresponsible just wouldn’t make any sense,” says Sylvestre-Williams, a 42-year-old writer in Toronto, Canada. “If I’m coming into a relationship, I don’t want to take on the burden of all his financial problems.”

According to new data from financial planning firm LearnVest (www.learnvest.com/), Sylvestre-Williams is part of a healthy majority. LearnVest's Money Habits & Confessions Survey found that 58 percent of people say they would choose to be single for the rest of their lives instead of partnering with someone with messed-up finances.

That might help explain why single-person households are at record highs, accounting for nearly 28 percent of all American households in 2014, according to the U.S. Census Bureau. So is the percentage of single-parent households, according to Pew Research.

For true romantics, it might be shocking to discover that finances are such a critical factor in our choice of partners. After all, most profiles on Match.com or eHarmony.com talk dreamily about long walks on the beach, not about checking each other’s credit scores.

At the same time, the data offers some hope: Putting your finances on a positive track is not just good for your retirement accounts, but actually makes you a more appealing romantic prospect.

“Marriage can be risky, financially, especially if you have a spouse who has substantial debt or is bad with money in other ways. By living single, you take all those kinds of complications off the table,” says Bella DePaulo, a project scientist at the University of California, Santa Barbara and author of the book “Singled Out: How Singles Are Stereotyped, Stigmatized, and Ignored, and Still Live Happily Ever After.”

The LearnVest survey also found that more than two-thirds of Americans in relationships, 68 percent, say money is a bigger source of tension than sex. Almost a quarter, 24 percent, have broken up with partners over money issues.

While avoiding marital money messiness in one thing, being (and staying) single presents its own financial challenges.

A few tips for going solo:

* Know that the retirement bar has been raised

Without the financial cushion of a working partner, your own money choices become all the more critical. Whereas those in a relationship might cope with job loss by leaning on their partner’s income for a while, it is all on you.

That means spend less, bolster your emergency fund, try to reduce fixed monthly burdens like housing costs, and work on diversifying your income streams (with a side hustle or rental property), says DePaulo.

On the back end of your earning years, plan on working as long as possible and delaying Social Security benefits to boost payouts.

* Get your paperwork in order

Just because you don’t have a life partner, that doesn’t mean you are absolved from life’s annoying paperwork. Atlanta financial planner Niv Persaud suggests drawing up a HIPAA release form, healthcare proxy and financial power of attorney, in the event of emergencies. Instead of a wife or husband making difficult health or money decisions during a crisis, you can name a sibling, parent or close friend to call the shots.

* Put a planner to work

American dollar notes are displayed in this photo illustration in Johannesburg August 13, 2014. REUTERS/Siphiwe Sibeko

Every financial planner on the planet urges the importance of having the “Money Talk” with your spouse: To get everything on the table, bounce ideas around, and agree on a plan together. If you are on your own, a financial planner can help fill that role. “Singles need someone to hold them accountable, too - and a financial planner can be that person,” says Alexa von Tobel, LearnVest’s founder and CEO.

* Build your own ‘insurance’ network

In one sense, having a life partner is kind of like having an insurance policy for whatever craziness life throws at you. But it is not the only one available: In the absence of a partner, work on cultivating other relationships with people who will be able to step in and help during times of need.

Editing by Beth Pinsker and Dan Grebler

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