(MONEY Magazine) – Kelly Noonan, 33, an account executive for an insurance investigation firm in Middletown, Conn. grew up believing that her financial life wouldn't start until she got married. After all, that's how it had worked for her parents. They tied the knot, then bought a house, a second car, life insurance. Noonan passed her 21st birthday without thinking about a wedding. Her 25th came and went. She saw 30 approaching. And all of a sudden, she woke up. "I started to think, I have to take care of myself because who knows what the future holds," she recalls. "I can't depend on a family. I can't depend on a husband. I hope I'll have those things some- day, but I shouldn't be counting on them."

Until that realization hit, Noonan had avoided even looking at her money. "I was afraid of what I'd see," she admits. She'd charged vacations to Europe, designer clothes and dinners out with friends without a second thought, racking up $10,000-plus in high-rate debt. She tackled the problem methodically. First she transferred her balances to lower-rate cards, then used every bit of her extra cash to pay them off. "Once I got it all paid off, I felt so empowered," she recalls.

The troubles of the past behind her, Noonan turned to her future. She hit up her employers for disability insurance, which they hadn't offered before. She started funding her 401(k) to the max and making a nondeductible $2,000 IRA deposit each year. Along with a fairly traditional mutual fund portfolio, she put some additional money in tech stocks--and since no one else was depending on her to hit home runs, she didn't panic when Microsoft, Biogen and Motorola fell out of the sky. These are the times, she says, when she likes being single.

Welcome to the real world circa 2001. Singles may not rule, but they're getting close. According to the Census Bureau, today 38% of Americans over 18 are single, up from 27% in 1970. Singles' ranks are burgeoning as folks are marrying later, or not at all. And of the 90% who eventually do marry, nearly half find themselves single again after a divorce.

The financial community is only starting to catch on to the demographic shift. Charles Schwab has pamphlets in its "Life Events" arsenal specifically for divorced and widowed people. Outside Philadelphia, Merrill Lynch financial planner Regina M. Hess teaches a course called "Financial Planning for Singles." And titles like Buying a Home When You're Single and Money Power for Singles are popping up on Amazon.com.

It's about time. Because the fact is, when it comes to money, singles are different. That's true whether you're on your own, living with a partner, raising children from a prior relationship, or divorced or widowed after a long marriage. You're different in the eyes of your company benefits department, in the eyes of insurance companies and in the eyes of the Internal Revenue Service. And you need to recognize these differences to plan successfully for your future.

On the pages that follow, you'll find advice specifically tailored for four categories of singles. Some of our recommendations for young singles are essentials for all singles--indeed all adults. But as you age and your life becomes more complicated, so do your financial needs. Read on to learn what you need to know for all stages of your life as a single person.

YOUNG SINGLES, NO KIDS

Arthur Wellington Conquest IV--friends call him Quad--is completely unencumbered. No wife. No dog. Not even an apartment. As a consultant for IBM, the 25-year-old spends his weeks on the road, living in hotels, racking up frequent-flier miles. When he returns home on weekends, it's to his parents' house outside Boston, where he retrieves his only real financial asset: his cherry red Infiniti G20.

He's typical of many young singles these days--great job, competitive salary in the mid-five figures, few responsibilities. It's a fun time. But if you're too cavalier, you miss out on financial opportunities that come around only once in a lifetime. To get your act together, you need the following:

A six-month cash cushion. What would happen if you got pink-slipped? If you have some money stashed away, you'll be able to stay in your apartment, make your car payments, go out to dinner with your friends at night while you're job hunting. If you don't have a cushion, you may find yourself on the futon in your best friend's den. Three months' worth of living expenses invested in an easily accessible account will do if you have securities you could liquidate in a pinch. Otherwise, you need six months'. And while you're at it, says Coral Gables, Fla. financial planner Harold Evensky, identify other funds you could access in a real emergency, such as life insurance policies you could borrow against.

A start in investing. Conquest already has an investment portfolio worth nearly six figures. How has he done it? By stuffing at least $600 a month into his retirement accounts. He maximizes his contributions to his 401(k), buys as much IBM stock through his company's purchase program as he can and buys individual stocks, primarily techs like Motorola and Nokia, through a taxable account. He doesn't even spend his change; it goes into the piggy bank he's had since college, and when he empties it out once a year, the $300 or so he finds goes into the bank.

"I'm a cheap bastard," he says, laughing. "Every time I think about going off to South America for six months or Europe for a little while, I take another look and say, 'If I don't go, in six months I could have this much more in my bank account.'" Conquest knows this is the only time in his life he'll have the opportunity to save this much of his earnings. Down the road he'll have a mortgage, a second car payment, bills for day care and clothes for the kids he's sure he'll have one day. Now he can be selfish about hoarding cash.

That's the right attitude, says Beverly Hills money manager Judy Resnick, author of I've Been Rich, I've Been Poor. Rich Is Better. Young singles, she says, should invest aggressively in stocks--and women should be even more aggressive than men. "Women are likely to live longer and have lower pensions," she points out. Even if you can't put away $600 a month the way Conquest does, compounding will work in your favor. Invest just $25 a month from the age of 21 at an 11% return (the market's historical average since 1929), and you'll have more than $216,000 40 years down the road.

Insurance. Not life insurance. Anyone who tries to sell you that should be shown the door (unless you're supporting an elderly parent or have major debts you'd want to pay off). Disability insurance, which covers 50% to 70% of your salary if you're unable to work, is the ticket. Every working person needs disability insurance, but if you're married there's another ostensibly employable adult in the family to rely on. If you're single, you have only yourself.

If your employer offers coverage, by all means take it, but if it covers less than 60% of your salary, supplement it with a policy you buy yourself. Look for one that adjusts for inflation and pays out if you're unable to work in your own occupation, not just if you're unable to work at all.

A will. If you die without a will, in most states your belongings will go to your parents, followed by your siblings, grandparents and a hierarchy of other relatives. That's fine if that's what you want. But Conquest says he'd actually want some of his money to go to his friends. That won't happen if he doesn't specify it in a will. Unless you have hundreds of thousands in assets, you can probably do the paperwork on your home computer with WillMaker from Nolo ($39.95).

OLDER SINGLES, NO KIDS

As a gay man, Everett Leiter, 48, a speech pathologist in Manhattan, figured he'd never have children. And like many singles, whether gay or straight, he knew he might never find a partner with whom to share his entire life. As a result, he didn't spend a lot of time thinking about his financial future as a young man. Then the AIDS epidemic took hold. "There I was, in my mid-thirties, seeing people at a stage of their life you usually see decades later," he remembers. "A lot of my friends became ill or disabled. I saw them deal with dwindling resources. It put me in touch with my own mortality, and I started making plans."

That's often what happens when you age. Once you see a friend or family member succumb to cancer or slip a disk and have to stop working, it spurs you to take care of your own needs, from insurance to estate planning. If you're married, you know there's at least one person to take care of you and to earn a living for your family. The challenge for older singles is tougher. You have to provide for your own future and figure out which people in your life you can truly count on in an emergency. Like single twentysomethings, you need a cash cushion, disability insurance and a will, but you also need an investment plan that suits your time horizon. You should:

Build your portfolio. As your earning power rises, do more than max out your IRA and 401(k) contributions. If you have self-employment income, stuff up to $30,000 each year into a Keogh or $24,000 a year into a SEP-IRA; both are tax deferred. Invest additional money through a bank or brokerage firm. Leiter was an aggressive stock investor through the 1980s and early '90s, but as he's moved toward his 50th birthday--and come to realize that he may be single for the long term--he's scaled back to 60% equities, including some of the bigger technology stocks, and 40% in bonds. "I invest as if I were five or 10 years older than I am," he says. Particularly in a shaky market, it helps him to sleep at night.

Buy real estate. Historically, singles rented while their married counterparts bought. Over the past decade or so, that's started to change. Today, according to the Census Bureau, 53% of one-person households own real estate, up from 46% in 1985. And why not, says Manhattan C.P.A. David Rhine of BDO Seidman: "Homes are a great investment on a long-term basis, and on a short-term basis they're a great tax shelter." Plus, if and when you sell, you can pocket up to $250,000 in capital gains tax-free as long as you've lived in the house two of the past five years.

It may also be easier to find a property that appeals to you, now that developers are beginning to target the singles market. Once the builders at McStain Enterprises in Denver, for example, found that about 40% of their buyers were single, they did some research and began building to suit that segment of the market. Singles, the company says, want flexible spaces and dual master suites to accommodate a roommate or, in the case of older people, a caretaker. Even if you intend to live alone, it makes sense to buy a place big enough for two. "Particularly in softer markets, two-bedroom condominiums sell easier than smaller units," says National Association of Realtors spokesman Walter Molony.

If you're new to the housing market, ask your mortgage lender about programs available to first-time buyers in your state. Two years ago, Kelly Noonan bought a two-bedroom, two-bath condo. As a first-time buyer, she got a slew of valuable perks. She put only $100 down on her $59,000 place, got a 6.6% rate on her 30-year loan (then running about 8% on average) and by closing in 30 days, got a $2,000 rebate for closing costs and attorney's fees.

Consider long-term-care insurance. There's a mountain of evidence that long-term-care insurance is especially important for singles, says Herb Perone, chief spokesman for the American Council of Life Insurers. People who have no children or spouse tend to go into institutions earlier than others, says a 2000 study from the ACLI. Furthermore, a 1999 study in the journal Demography notes that divorced parents--especially divorced fathers--are less likely to receive long-term-care assistance from their kids than parents who are widowed.

That said, the coverage is expensive. According to Donna O'Rourke, an analyst at Weiss Ratings, which studies long-term-care insurers, these policies are best for people with between $250,000 and $1.5 million in assets. Below the floor, you'll quickly exhaust your assets if you need care and qualify for Medicaid. Above the ceiling, you can invest your own money and use the proceeds to pay for care. A Weiss study found the best age to purchase a policy is 60; earlier and you're buying a policy that could be obsolete by the time you use it; later and premiums rise very quickly.

Flesh out your estate plan. Of course you need a will to ensure that your property is handled as you'd wish. But what about what happens to you if you're incapacitated? Who pays your bills? Who tells your physician whether or not you want the extra dose of pain medication? The answer: no one, unless you make arrangements. Leiter asked one friend to be the executor of his will, another to accept power of attorney for health decisions. "I thought about it for a long time before I actually did it," he recalls. "Once I got the words out, I felt relieved." In turn, he has agreed to take the same responsibility for friends.

SINGLE, BUT ATTACHED

Despite the fact that they're in love and have every intention of spending the rest of their lives together, Dorian Solot and Marshall Miller, both 27, have no intention of getting married. "I would be uncomfortable [getting married] just to get married, when I have a relationship working the way it is," Solot explains. That said, it hasn't been easy.

Solot says she and Miller have experienced "financial discrimination" at practically every turn. They couldn't get on each other's health insurance policies at work. A potential landlord said he didn't feel "comfortable" renting to them as an unmarried couple. And when they moved from Rhode Island to Massachusetts, several insurers told them they needed separate renters and auto insurance policies, which would have cost almost twice as much as the joint policies they previously held. All this inspired them to start the Alternatives to Marriage Project, an online resource organization for unmarrieds. The number of marriage-age adults cohabiting in this country has nearly doubled--to 4.2 million in 1998--since 1990. If you're among them, it's time to:

Shop around for insurance. Married couples may get a discount on their homeowners and renters policies, acknowledges Jeanne Salvatore, spokeswoman for the Insurance Information Institute. The thinking is that marrieds tend to be home more often, minimizing losses from burglary and fires. Singles who live alone are out of luck here, but Salvatore says some insurers will extend that discount to domestic partners--some even do so to roommates--if you explain the relationship and make it clear that you don't live by yourself. By phoning a handful of insurers, Solot and Miller were able to find coverage together at about half the price they were first quoted.

Maintain your financial independence. Ralph Warner, author of the Living Together Kit (Nolo), notes that no matter how committed you are to your partner, if you're not married you need to have your own bank accounts and credit cards (although it's fine to have a joint checking account for household expenses). While a marriage license is no guarantee that your spouse won't empty your accounts and head for Timbuktu, a divorce proceeding provides a legal mechanism to get some (or all) of your assets back. Singles don't have that option. It's also unwise, Warner adds, to cosign a loan or get a joint credit card unless you're ready, willing and able to pay the entire amount.

Title carefully. Titling assets jointly with rights of survivorship is one way to be sure that your assets will go to your partner when you die. Joint tenancy even supersedes a will. But it can be a hornet's nest. Own real estate jointly and the government assumes you each own half, regardless of what each of you actually contributed. If you're intent on buying property together and one puts in more than the other, it's smarter to own it as tenants in common. Typically, you then specify in your deed (or in an attached written agreement) who owns what percent. What if you break up? You can sell and split the proceeds according to the shares specified in the deed. Or one of you can buy the other out. One caveat: As tenants in common, the survivor has no right to the entire property. You'd have to stipulate that in your will.

Focus on estate planning. If you want your partner to inherit your assets, you must say so in your will. Solot and Miller have also named each other beneficiary of their retirement accounts. If you want to take care of your partner but not his or her new companion, or if you want remaining assets to go to your family after your partner's death, you need to set up a trust.

As you accumulate wealth, you may also want to take steps to avoid estate taxes. In a marriage, all assets pass from one spouse to the other tax-free. That doesn't happen with domestic partners. Currently everything over the $675,000 exemption is subject to estate taxes of up to 55%. That may change, but until then, Manhattan-based estate-planning attorney Gideon Rothschild suggests that if one partner is much wealthier than the other, annual tax-free gifts of up to $10,000 can shuffle a decent amount of money around. Real estate and stocks can also be transferred--not tax-free but at a tax savings--using a menu of trusts. As for Solot, she says, "Someone once told me that if he were on his deathbed he would marry his unmarried partner of several decades so that she wouldn't have to worry about the taxes."

SINGLE WITH KIDS

Don Bishop, 48, is now single for the third time. Bishop was 26 when his first wife left. She took exactly half of everything they had--the forks, the plates, the towels--except the children. She left him with two young sons, Steve, then 3, and Tom, 6. "By the time everything was sorted out, we started from scratch," he recalls. "I had to replace everything. And I moved to get rid of the memories." On alternate weekends, when the boys were with their mother, he took on a second job.

When Bishop married Diana, who worked in the accounting department at Goodyear, he never dreamed he'd ever be on his own again. But in August 1990, Diana was diagnosed with breast cancer. She fought valiantly, undergoing experimental treatments in Maryland, Michigan and California. When she died three years later, Bishop recalls a strange sense of deja vu. Again, he was left with small children--Julie was 4, David, 8. Again, he was financially strapped. And he was exhausted. "Being worn out is the biggest adjustment I've had to make as a single parent," he says. "I think I have the night off and then my boy has band practice--he plays the trombone--and after band is jazz band." The constant activity gave Bishop, a licensed boiler operator, very little time to think about his finances.

But he buckled down and did it anyway. He had to. His wife's experimental treatments weren't covered by insurance. Add to that the funeral expenses and the loss of her income, and Bishop felt he was starting from square one. Again. "I refinanced the house and got an equity line of credit," Bishop remembers. "I used that to consolidate the funeral debts and the cancer treatments. I took the money left over and invested it. I made sure my kids were taken care of if something happened to me. I increased my life insurance and wrote a trust so that they would have an income [from my estate]."

For now, he's not even thinking of getting married again. Forget the emotional reasons, he says. The financial ones are pressure enough: As long as he stays widowed, he and the kids are covered under his late wife's health insurance as a secondary policy. Plus, when he turns 60 (just as his younger kids hit college age), he can draw more than two-thirds of his late wife's Social Security--but only if he stays widowed.

If you're on your own with kids, the first thing you need to shore up is your safety net. That entails the following:

Life insurance. The need is obvious: You have to make sure there's enough money to support and educate your children should something happen to you. Your insurance agent should be able to walk you through a worksheet to pinpoint your specific needs. And disability insurance is absolutely crucial.

A viable estate plan. If your children are minors and you don't want your former spouse or partner to have access to any assets you leave to the kids, you need to put those assets in trust. Limited partnerships and limited-liability companies may also be an option.

Investing with both college and retirement in mind. Consider putting some money into a state-sponsored college savings plan, sometimes called a 529 plan after the relevant portion of the tax code. Some 33 states now have these programs, with another dozen on the way. Like an Education IRA, the money grows tax-free until it's withdrawn, but the maximum annual contribution is much higher: $10,000 vs. the Education IRA's $500. Many states allow residents to deduct their contributions on their state tax returns and a couple offer matching dollars.

Re-establishing your emergency plan. Whether you've gone through a costly divorce or the illness of a spouse, chances are your resources are no longer what they once were. Focus on rebuilding that three- to six-month cushion of living expenses. "A lot of people assume they don't need one because they'll always be able to work," says money manager Judy Resnick. "That's a mistake." If your credit rating has suffered, repair it; this means not only paying your bills on time, but getting on the horn to your creditors and explaining your situation if you can't. If you lost any insurance coverage as a result of a divorce, shop for a new policy now.

Giving your investments a once-over. The particular investments that worked for you as a couple may not suit your needs as a single person. Municipal bonds, for example, that fit your two-income tax bracket may no longer make sense based on your own earnings. Owning individual stocks may have been a fine strategy if your spouse kept an eye on them; if you don't care to do that, you may want to transition into mutual funds or hire a money manager.

Finding someone to talk to. When you lose a longtime partner, you also lose your primary financial confidante, the person with whom you debated buying Amazon.com or that vacation home. If you find it difficult to make financial moves on your own, hire someone to help you, suggests financial planner Evensky. A planner, accountant or estate-planning attorney can fill the bill.

Protect what's yours. If you find yourself heading back into a relationship, make certain that you protect what's yours, particularly if you have children. This probably means a prenuptial agreement. It definitely means sitting down with a matrimonial or estate-planning attorney so that you don't have to worry about your kids' and your own financial security down the road.