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A heartbreaking truth for single Americans: Renters are paying a ‘singles tax’ of up to $19,500 — here’s how to feel financially secure even when you live by yourself

A heartbreaking truth for single Americans: Renters are paying a ‘singles tax’ of up to $19,500 — here’s how to feel financially secure even when you live by yourself
A heartbreaking truth for single Americans: Renters are paying a ‘singles tax’ of up to $19,500 — here’s how to feel financially secure even when you live by yourself

Living alone has its perks. You get to watch what you want on TV, there are no timetable tussles for the shower, and no one steals your leftovers from the fridge.

But flying solo also comes at a cost. A big one.

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Renters living alone in a one-bedroom apartment face a yearly "singles tax" of up to $19,500 in America’s most expensive cities, according to a report released earlier this year from real estate giant Zillow.

According to a survey commissioned by Forbes Advisor, 93% of U.S. singles feel the burden of the singles tax and one-in-three respondents admitted to staying in a relationship longer for the financial benefits.

Nationwide, singles pay nearly $7,000 extra per year to live alone in a one-bedroom apartment, according to Zillow. But don’t despair, there are ways to turn use that independence to your financial advantage.

The singles tax

The size of the singles tax — how much more you pay per year compared to a couple living in the same apartment — varies widely depending on your local real estate market.

Singles in New York can pay up to $19,500 more a year than someone living with a partner in the same one-bedroom apartment, per Zillow's analysis of StreetEasy data.

Other cities sucking the savings out of single Americans include San Francisco, with a $14,114 singles tax for a one-bedroom apartment, San Jose ($12,401), San Diego ($11,774) and Boston ($11,546).

If you want to live alone in a city, but you’re looking to save some dollars and dimes, Detroit and Cleveland oould be your best options. According to Zillow, they have the lowest singles tax out of the 50 largest U.S. cities (by population) at $4,483 and $4,387, respectively.

On the other end of the spectrum from the singles tax is the so-called "couples discount." Couples get to split everyday costs like rent or groceries and being paired up can also boast some tax advantages.

Zillow found that, compared to renters living solo, couples nationwide save a collective $14,000 per year by cohabitating. In the most expensive areas, New York City and San Francisco, couples can save up to $39,000 and $28,227, respectively.

Read more: This janitor in Vermont built an $8M fortune without anyone around him knowing. Here are the 2 simple techniques that made Ronald Read rich — and can do the same for you

Rent a problem for many

The U.S. rental market is not only tough for singles. Rents across the country have been stubbornly high for the past few years because people can’t afford to buy homes. This means there’s been growing demand and shrinking supply in the rental market, which has further pushed up prices.

In January, renters in apartments and single-family homes paid 8.6% more than they would have 12-months ago, according to the National Association of Realtors (NAR). The monthly rent change was 0.7% or 8.8% on an annualized basis.

But some believe rent relief is on the way.

“Apartment construction activity is at a 40-year high. As these new empty units steadily reach the market, rent growth will tame down,” the NAR’s Lawrence Yun wrote in a blog post. “That will also pull back the overall consumer price inflation.”

However, Zillow’s home trends expert Amanda Pendleton urged renters to be cautious.

“Even though rent prices are starting to cool, they are still significantly higher than they were a year ago,” she said. “Renters considering going solo this year must decide how valuable living alone is to them, and if the cost is worth it.”

If you do opt for the single lifestyle, here's what you can take do to shore up your financial security.

Take control of your finances

Being single means that any financial mistakes you make can carry more risk. If you choose to live alone but are worried about your budget being stretched beyond what you can handle, there are other ways to protect your finances. Of course, the easiest way to avoid paying the singles tax is to live with a roommate and split some costs — but that's not a sacrifice everyone is willing or able to make.

Either way, you should ensure your finances are as healthy as they can be. Take for instance your credit card bill: If you don’t keep up with your monthly payments, you could end up paying interest on your interest, and your balance can quickly spiral out of control. The same goes for other types of loans, like car loans.

If you're carrying a balance, paying down debt should be a top priority.

However, many Americans may be juggling multiple lines of credit. If interest rates are sapping every last bit of income you have for the month or you're having trouble keeping track of what you owe who, you might consider consolidating your debt into one lower-interest loan.

If you’re paying for rent on your own, chances are you’re also covering car costs solo. As the costs of car ownership grow more cumbersome, you can also take a look at your current auto insurance policy and shop around for a better rate to help bring those monthly bills down.

Finally, it’s important to make sure you’ve taken the necessary steps to protect your wealth if things go sideways — for example, if you lose your job — because you can’t rely on a partner to pick up the slack.

Keeping an emergency fund with about three month's worth of money — including all expenses like rent, bills, groceries, loan payments, car expenses and so on — can be key to financial security.

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This article provides information only and should not be construed as advice. It is provided without warranty of any kind.