At some point in your life, you may find yourself living alone. It could be in your apartment when you get your first job after college. It could be after a divorce in midlife or in old age after the death of a spouse. Regardless of your age or relationship status, living alone carries unique financial circumstances. Following are some important considerations for your solo financial life.

Daily expenses: One benefit of living with another person is that you may save on rent or a mortgage, utilities, cable, food and other costs of living. When you live alone, all those expenses are yours to pay in full every month. If money is tight, it’s worth looking at ways to minimize those bills. Budget spending so that you make sure you’re living within your means.

Emergency savings: We recommend having three to six months of expenses in a savings account for emergencies. When you are your sole support, you may want to have six to eight months saved up. You never know when you might lose your job, have an accident, face a legal issue or run into some other kind of trouble. Keep in mind that if you do need to use your emergency fund money, you want to replace it as soon as possible.

Life insurance: If no one else depends on you for support, you probably don’t need life insurance, which is primarily used to help those who will suffer financially if you die. It’s worth taking a moment, however, to be forward-looking. Perhaps you have a parent, sibling or someone else in your life to whom you’d like to leave money. In that case, term life insurance is inexpensive for younger people and could provide a benefit for a loved one if you were to pass away while young. If you are older, you may find life insurance prohibitively expensive. But if you are still concerned about providing for a loved one, you might want to consider other estate planning strategies to accomplish this.

Long-term care insurance: Long-term care insurance pays for your stay in a care facility after you aren’t able to take care of yourself alone. It kicks in when your doctor certifies that you need help with more than two activities of daily living, which include basic things like eating, dressing and using the bathroom. Not everyone needs long-term care insurance. Wealthy individuals may be able to cover these costs on their own. People with lower net worth and few assets, and even some middle-class consumers, could find it difficult to pay the high premiums this insurance requires. Additionally, long-term care insurance premiums can go up substantially between renewal periods. Be sure to do your research before you buy.

Keep in mind that even though after age 65 you will have Medicare, government-sponsored health insurance for the elderly, it pays only for medical care. It doesn’t pay for you to live in a nursing home or to have paid help for your daily activities of life. Once your assets have dwindled to certain levels, you will qualify for Medicaid, which covers custodial care in a nursing home.

A will: You might think you don’t need a will if you have no spouse or dependents, but if you have family members, a will would be very helpful to them. The state in which you reside decides how to dispense the assets of those who die without a will. This is the probate process and can take a long time. It may also result in dispensations you would not have wanted. Creating and signing a will can help your next of kin immensely. You can hire a lawyer to make a will or do one yourself with forms you buy online. If you have no relatives or friends you wish to leave your assets to, you can leave them to a charity, college, organization or any other entity you choose. Contact the charity or organization to find out how to make this happen.

Illness or incapacity: What happens if you have an accident or become too ill to manage your finances and bills? You might want to create a notebook of passwords, bills you pay, credit card numbers and other pertinent information so someone can step in and take over if you are temporarily incapacitated. Just make sure it’s kept in a safe place. You can offer a trusted person an extra key, and show him or her where you keep the notebook in case something happens to you. This may be sufficient for short-term illnesses. However, if you become permanently incapacitated, you’ll want to have a legal document, known as a power of attorney, in place. This gives someone else the right to manage your finances on your behalf. You can work with an estate-planning attorney to set this up.

Taxes: If you’re living alone, you probably file your taxes as “Single,” which offers fewer tax breaks and results in higher taxes than “Married Filing Jointly.” If you’re young or middle-aged, the best way to lower your taxes is to contribute the most you can (up to the limit) to 401(k) or IRA retirement plans. If you’re older, you want to be sure to check “yes” for the “over-65” higher standard deduction, which will help reduce your taxes.

Final Thought

It may be challenging to be on your own, especially if it follows years filled with family. It could also be pleasant to be able to keep your own schedule, eat what you want when you want, and spend your money on your wants rather than those of others. Knowing that you are protected financially will give you a sense of security that will enhance your general well-being.