But if you’re going it alone—with no added financial help from a partner or spouse—you might be feeling a little extra pressure.
And you certainly wouldn't be alone.
Get started with a free financial assessment.
Get started with a free financial assessment.
According to 2012 data from the National Association of Realtors, some 25% of home buyers are single—and 16% are solo home-buying women.
So it got us thinking: Does purchasing a home by yourself differ greatly from sharing the responsibility with a significant other?
To find out, we asked three single women in the market to buy if they'd share what type of home they're eyeing, how they're saving up for a down payment—and why they think now is the perfect time to purchase.
Then we had Hank Lobel, CFP®, with LearnVest Planning Services, weigh in on their game plans and analyze how close they really are to reaching their American dream goals.
The Sacrificing Side-Gigger
Beth Lacey Gill, 35, director of marketing at a nature center, Baltimore, Md.
What she wants to buy: I’d love to purchase a home with three bedrooms and two bathrooms, plus a fenced-in yard where my dogs can play.
The perfect location would be 20 minutes from my work, 15 minutes from Baltimore’s Inner Harbor, and close to the highway—so I’m looking in Catonsville, Halethorpe and Arbutus. All three towns meet those qualifications and are up-and-coming places to live.
The houses I’m interested in are in the $220,000 to $240,000 range, which might be slightly steep if I were to live alone. But I’ll have a roommate—a friend who is planning to move with me wherever I go—who will help me pay my mortgage.
Where she stands: In addition to my regular job, where I earn $60,000 a year, I have a side business selling homemade jellies and jams, I work at an aquarium on the weekends, and I pet-sit. I've also made some everyday sacrifices in order to save more, like not buying concert tickets or new books. All in all, I'm saving $400 a month.
It's advisable that your home's principal, interest, taxes and insurance not exceed 28% of your net income, so buying in the $220,000 to $240,000 range is realistic for Beth.
My parents have given me a very generous donation of $10,000 for the down payment, which upped my savings account balance to $16,000—just $2,000 away from my goal of $18,000. I’m still saving 5% of my regular paycheck for retirement, but I funnel the rest of my savings into one account, so I don’t have a separate one for emergency savings right now.
What the CFP® says: At LearnVest, we believe it's advisable that your home's principal, interest, taxes and insurance not exceed 28% of your net income, so buying a house in the $220,000 to $240,000 range is realistic for Beth. That said, it may be helpful to focus on saving more than $400 a month, given the amount of work she’s doing between her 9-to-5 and the side businesses.
I recommend that she use 90% of her extra income, if possible, to work toward her savings goals, like the down payment, leaving her with 10% to spend on fun things she enjoys now—which I believe is a good spending formula to follow even after she's purchased her house. Very few people are willing to make the sacrifices Beth has to save for a down payment, and even fewer keep working that hard once they’ve met the goal.
My other concern is Beth's financial foundation—and that the $16,000 she has saved for the down payment is doubling as her emergency fund. Ideally, Beth should consider contributing to—or have already funded—a separate emergency savings account with six months’ worth of her take-home pay, which she can tap in to in the event she's confronted by an unexpected expense.
She can look into opening a high-yield online savings account for her rainy day fund, and save for both priorities simultaneously. This way, when she buys her house, she probably won’t feel like all she has left is $100 for emergencies and a 30-year obligation.
RELATED: 7 Reasons You Need an Emergency Fund
The Multitasking Entrepreneur
Hope Mirlis, 43, wedding officiant, relationship counselor and private yoga instructor, New York City
What she wants to buy: In 2007 I sold my two-bedroom condo in Atlanta, and after taking some time off to travel, I moved to Manhattan two years ago. I now rent a studio in Washington Heights, a neighborhood in northwest Manhattan.
If I can afford it, I’d like to buy a one-bedroom apartment that's big enough for me to host clients and private yoga students—either in Inwood, the northernmost Manhattan neighborhood, or Astoria, Queens. They’re both places that are up-and-coming, with restaurants and shops close by, plus easy transportation.
I’d also love to have a washer and dryer in the apartment, lots of light and a rooftop deck. In some newer buildings, there are green spaces on the roofs—and that would be fantastic for my lifestyle.
I’m going to start searching soon to figure out what’s out there, and then decide what I need to save up. One-bedroom prices vary greatly depending on the New York City neighborhood. I have found they could start around $125,000 and go all the way up to $500,000. So, for more options, I'm also planning to look at large studios.
I’m impressed that Hope has been able to save so much. But her income is a little troubling, given the risk she’ll be assuming—even with a hefty down payment.
Where she stands: My account balance is $225,000—including $100,000 from the sale of my home in Atlanta—so I’m not too worried about a down payment.
I also have an emergency fund with six months’ worth of living expenses, and I continue to put $700 into my investment accounts each month. And I'm on track for retirement.
I've recently transitioned from nonprofit work to self-employment as a wedding officiant, relationship counselor and private yoga teacher. This year, I expect to make about $40,000. The challenge I'm facing now is to keep the income flowing and continue growing my business. But I’m used to living within my means, and have always paid attention to my expenses.
What the CFP® says: I’m impressed that Hope has been able to save so much money, and that she's maintained a six-month emergency fund to help cover unforeseen expenses during her transition to self-employment. But her income situation is a little troubling, given the risk she’ll be assuming by purchasing her own place—even with a hefty down payment of at least 20%.
Hope is self-employed in an industry that could be considered very elastic—there’s a lot of discretion to it. So between that potential instability and her $40,000 income, I really wouldn’t recommend she apply for a loan of more than $150,000, which may not buy her what she's looking for in New York City, especially when factoring in possible co-op maintenance fees and insurance.
Another thing she should consider is whether she’ll be allowed to work out of her home. Oftentimes condo complexes and associations have restrictions about home-based businesses. Would that thwart her ability to earn an income? She should make sure she understands the charters and any guidelines she’ll be forced to comply with as a homeowner before signing on the dotted line.
The Recent College Grad
Alyssa Bedrosian, 22, public relations professional, Greensboro, N.C.
What she wants to buy: The Greensboro market is less expensive than other major cities, which is great for someone like me! I graduated from college in December 2013 and have been living with my parents, but I'm hoping to buy a home next summer.
I'd like to purchase a two-bedroom, one bathroom property. I’ve been looking for a single-family home, but lately I've become more interested in condos because there's less upkeep and yardwork involved.
If I can, I'd like to live in the downtown area, especially the Lindley Park neighborhood. There are a lot of young people there, and it’s close to shops and restaurants. Homes are in the $115,000 to $150,000 range in that area, but I’d like to stay closer to $115,000.
Where she stands: By living at home and carefully watching my lifestyle expenses, like eating out and shopping, I’ve managed to save about $700 to $800 a month—even though my salary is in the low $30,000s.
There are some months when I can even save $1,000 from my paycheck, and that doesn’t include putting 10% into my 401(k). So far, I’ve saved $8,000 toward my $20,000 goal—but that's my down payment savings and emergency fund combined.
Sure, the mortgage may be affordable, but ancillary expenses can create an obligation she can’t keep up with. In some condos, H.O.A. fees can add up to 50% of the mortgage cost.
I love living at home, but there are some challenges. In some ways I still have to follow the rules my parents have in place, so wanting to be more independent is definitely a motivation to keep saving. Also, looking at neighborhoods I like gets me excited about moving toward my goal.
In truth, I'm finding that it's tough to buy as a single person because you just have one income to work with—but I like that I can choose a home that fits my needs only.
What the CFP® says: Alyssa’s aggressive savings habits are admirable—but, like Beth, I’d like to see her consider building a six-month emergency fund before prioritizing a home purchase. At her age, living with your parents can be a great way to help build up more cash for this goal.
Her price range for a home seems reasonable given her income, but I would recommend thinking twice before buying something just because you can afford it. For one, being a homeowner is a commitment—not only to a bank, but to a lifestyle and a location. It’s an anchor. Having a home could seriously impact Alyssa's ability to change industries or move to another city in the future.
But if Alyssa does decide to buy—and she’s seriously considering condos—she shouldn’t forget that there are usually home association fees to take into account. Sure, the mortgage may be affordable, but ancillary expenses can potentially create an obligation she can’t keep up with. In certain markets, H.O.A. fees are minimal, but in some luxury condos, they can add up to 50% of the mortgage cost.
Alyssa should also make sure she knows exactly what she'll receive in exchange for the fees—a weight room or pool, for instance, or just lawn-care services?—and that she's researched and is comfortable with the management style of the H.O.A.
LearnVest Planning Services is a registered investment adviser and subsidiary of LearnVest, Inc. that provides financial plans for its clients. Information shown is for illustrative purposes only and is not intended as investment, legal or tax planning advice. Please consult a financial adviser, attorney or tax specialist for advice specific to your financial situation. Unless specifically identified as such, the people interviewed in this piece are neither clients, employees nor affiliates of LearnVest Planning Services, and the views expressed are their own. LearnVest Planning Services and any third parties listed in this message are separate and unaffiliated and are not responsible for each other’s products, services or policies.
Certified Financial Planner Board of Standards Inc. owns the certification marks CFP®, CERTIFIED FINANCIAL PLANNER™, CFP® (with plaque design) and CFP® (with flame design) in the U.S., which it awards to individuals who successfully complete CFP Board’s initial and ongoing certification requirements.