How to live on one income: budgeting for singles

Living on a one-income budget

Whether you’re a single person or part of a one-income household, working within a budget is critical if you want to achieve long-term financial stability. If you’re having difficulty making ends meet or are struggling to set aside money for the future, now’s the time to analyze your spending and create a budget that will get you back on track.

Compare income and expenses

Add up your total monthly income, including salary and any side income. Then list all your expenses—fixed (rent, utilities, insurance, debt payments) and variable (groceries, entertainment, personal items). The goal is to understand where your money goes and how to control it.

Track discretionary spending

Keep a daily or weekly record of non-essential expenses for at least one month. Use a spreadsheet or budgeting app to reveal patterns that can be adjusted.

Separate needs from wants

Categorize your expenses clearly. Essentials (needs) like rent and groceries take priority. Cut back or eliminate nonessentials (wants) to free up funds for savings or debt repayment.

Set financial goals

Define your short-term goals (like paying off a credit card) and long-term goals (such as retirement or buying a home). Having a clear destination will help you allocate your resources.

Plan for irregular expenses

Budget for occasional costs like car repairs or holiday gifts. Build these into your monthly budget to avoid surprises.

Build an emergency fund

Aim to save three to six months’ worth of essential living expenses. An emergency fund is a safety net that protects you during unexpected events like job loss or medical issues.

Protect your lifestyle and family with insurance

Health, life, disability, and renter’s or homeowner’s insurance protect you from large, unexpected financial losses. Think of insurance as financial armor—it’s worth the cost.

What is a good income for a single person?

A “good income” means different things to different people. What a frugal person might consider to be a good amount might not be enough for someone else. Additionally, the cost of living can vary greatly depending on where you live. But on average, single workers in the U.S. require an annual income of $57,200 to make a living wage in America, according to an analysis by GOBankingRates.¹

What are the average living expenses for a single person?

While estimates vary, the U.S. Bureau of Labor Statistics reports that the average single person spends approximately $4,641 a month in the U.S.2 Of course, these figures will fluctuate based on location, lifestyle, and spending habits.

Sample budget for a single person?

Using the popular 50 | 30 | 20 budgeting rule (50% needs/30% wants/20% savings and debt repayment), here’s an example of what the average single person’s monthly budget might look like. While purely hypothetical, this example includes many common living expenses and is based on the average monthly take-home pay in the U.S. ($4,866) as reported by ZipRecruiter.³

50% Needs – $2,432.50

30% Wants – $1,495.50

32% Savings & Debt Repayment – $973.00

How to save money on one income

Even if you’re living on just one paycheck, you can still build a strong financial foundation. By focusing on smart habits and intentional spending (spending that aligns with your values and goals), you’ll be able to put money aside for the future and move closer to your major financial goals. Here are some practical tips to help singles save more money.

Pay yourself first

Prioritize savings by making it the first line item in your budget. If possible, use automated savings or investments so that the money comes out before you see it—or have a chance to spend it.

Eliminate unnecessary spending

Stick to your spending plan. Avoid impulse purchases by waiting 24 hours before buying nonessential items. Start packing lunch and reduce the number of times you eat out each week. Look into cutting back on the number of subscriptions or cable services you use.  

 Maximize rewards

When you do spend money, try to make the most of it by using credit cards that offer the highest possible rewards. Use cashback apps, coupons, and loyalty programs to reduce the cost of purchases and make them more productive.  

 Negotiate rates

Lower your fixed expenses by negotiating bills like internet, phone plans, or insurance. Consider transferring high-interest credit card balances to lower-interest options if available. Look into refinancing your mortgage (if you have one) to see if you can reduce your monthly payments.  

Compare interest rates and fees

Since interest rates play a pivotal role in the growth of your savings, it’s important to shop around for the best possible rates. Online banks and credit unions generally offer higher rates than traditional brick-and-mortar banks. Also, be sure to compare fees so that you aren’t losing money on the back end.

 Pursue higher returns

Depending solely on traditional savings accounts might not be the most efficient way to grow your wealth. Explore diversified investment options such as mutual funds, stocks, or bonds, depending on your risk tolerance and long-term goals.

 Find new sources of income

Look for a side hustle that you can fit into your busy schedule, or leverage some of your existing skills by freelancing or selling crafts online. Turn your car or home into income-producing assets through ridesharing apps or renting out a room.

It’s important to keep a close eye on your savings and make sure that your money continues to be as productive as possible. If you need any help, a financial professional can assess the situation and help you explore other possible solutions.

Retirement planning on a single income

Planning for retirement on a single income can feel daunting. You often have many of the same expenses as couples—housing, healthcare, and daily living costs—but without the benefit of dual incomes or certain tax breaks. According to the U.S. Census Bureau, the median annual income for individuals aged 65 and older is $47,620.⁴ That income may come from a mix of sources such as Social Security, pensions, part-time work, investments, and more. But will it be enough to support your desired retirement lifestyle? If you’re unsure, the following strategies can help you boost your income and plan with confidence.

Related: How to save money—learn to start saving now

Set clear goals

Start by defining what retirement looks like for you. Will you rent or own your home? Do you plan to travel? What will your healthcare needs be? Estimate your future lifestyle and costs to establish a financial target. This will help guide your savings strategy and keep you focused.

Maximize your retirement accounts

Take full advantage of retirement accounts like 401(k)s, IRAs, or similar programs available to you. Aim to contribute the maximum amount allowed each year to benefit from tax breaks and compound interest. If your employer offers matching contributions, be sure to contribute at least enough to get the full match—otherwise, you’re missing out on free money.

Invest wisely

A diversified investment portfolio can help manage risk and grow your savings. Consider a balanced mix of stocks, bonds, and other assets based on your risk tolerance and time horizon. Review and adjust your portfolio regularly and consult a financial professional to ensure you’re on the right path. While the stock market offers growth potential, it also involves risk—expert guidance can help you navigate it wisely.

Minimize debt

High-interest debt can quickly derail your retirement savings. Focus on paying off credit cards, student loans, or other high-interest balances as early as possible. Living debt-free puts more of your money to work for your future.

Live below your means

Avoid lifestyle inflation. Living modestly now can free up more funds for retirement savings. Cut unnecessary expenses and look for cost-effective alternatives when possible. Every dollar saved is a step closer to financial independence.

Living on a single income can present challenges, but with smart budgeting and disciplined financial planning, you can build a solid foundation for your future. Whether you’re managing finances on your own or in a one-income household, don’t hesitate to seek professional guidance. A financial advisor can help you create a plan tailored to your goals and circumstances. Remember, one of your greatest assets is time—the sooner you begin planning, the easier it will be to reach your goals.

Related Articles

¹Adriana Diaz, “These Are the Salaries Single People Need to Survive in Every State,” New York Post, August 30, 2023. https://nypost.com/2023/08/30/these-are-salaries-single-people-need-to-survive-in-every-state/

²Jacqueline DeMarco, “What are the average monthly expenses for one person?” SoFi.com, July 11, 2025

³After-Tax Salary Comparison by Location” ZipRecruiter.com, July 30, 2025

⁴Thomas J. Brock, “Average retirement income: What is a good income for retirees,” Annuity.com, April 16, 2025