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When you're young and single, and have no one financially dependent on you, it's easy to feel like you have a lot of expendable income. But now is the time to swap short-term wants for long-term financial gains. Here are five areas where you can save, along with ideas for what you can do with the extra money.

1. Rent Instead of Buying

Even if buying a home is your dream, you may benefit from renting for a while, especially if you're open to job opportunities that may take you across the country or if you need time to make yourself more attractive to lenders. Keep in mind that it generally takes five years for buying to become more cost-effective than renting. This is due to various homeownership expenses, including closing costs, private mortgage insurance, property taxes, and routine maintenance. Use a calculator to see if renting makes more financial sense for you.

2. Share Living Costs

Whether you rent or buy, consider finding a roommate or two. Not only will you pay less rent, but you can also save hundreds each year on the cost of internet, gas, and electricity, among other expenses. Don't discount living with your parents, either; living at home often means lower (or no) rent.

3. Work to Make Things Last

Compare the cost of buying new versus repairing what you have. For example, if you've worn through the soles of a pair of shoes, a cobbler can fix them for a fraction of the price of a new pair. It may also be useful to perform routine maintenance on your home and car to avoid major expenses down the road.

4. Cook as Much as Possible

After a recent survey from the Bureau of Labor Statistics, Business Insider found that 25 to 34 year-olds spend more than $3,400 dining out each year. Instead of going out, host potluck parties and find ways to save on groceries. If you're spending $25 per week on coffee, consider how that could add up to $1,300 a year. That's money you could be putting toward your financial goals.

5. Choose Your Insurance Wisely

Consider medical and dental insurance, especially if you're over 26 and thus no longer eligible to stay on your parents' healthcare plan. However, if you're young and single, you likely don't need a top-of-the-line plan.

Reallocate Your Funds

Once you've accumulated savings, consider putting that money toward a few different categories:

  • Retirement: As Money Under 30 shows, if you save $1,000 each month for 10 years, from age 25 to 35, you stand to gain more by age 65 than someone who saves $1,000 each month from age 35 to 45. The benefits of compound interest significantly decrease the longer you wait. At the very least, make it a priority to maximize any employer matching.
  • An Emergency Fund: Put your emergency funds into a high-interest savings account that you only touch in the event of an unexpected expense that you can't otherwise cover. By having a separate emergency fund, you can leave your retirement account untouched and avoid the penalties that come with withdrawing from retirement savings early.
  • Debt: Balance paying off debt with saving to ensure that you reap the benefits of compound interest. Paying down debt can lower your debt-to-income ratio, while paying credit card debt can keep your debt-to-credit ratio under 30 percent — both of which can help you secure lower interest rates on loans, including mortgages. You can also sign up for a service like KeyBank's EasyUp, which transfers $1 to your savings every time you use your KeyBank debit card. Those small amounts, combined with your regular debt payments, can make a big impact over time.

Use these guidelines to help make the most of being young and single. Having no dependents means that you can focus your attention on your own financial goals — without compromise.

This information and recommendations contained herein is compiled from sources deemed reliable, but is not represented to be accurate or complete. In providing this information, neither KeyBank nor its affiliates are acting as your agent or is offering any tax, accounting, or legal advice.

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