Finances

Finances. Yes, You Can!

Most widows, like you, are concerned about their finances. Our surveys show that finances are consistently the first or second in importance in a grocery list of issues. While each circumstance is different, some guidelines apply to us all. You need only three things to master your finances:

The desire to do so. (Necessity is a good motivator as well.)
The willingness to read and become informed.
Basic math skills of adding and subtracting, or a calculator.

Where do we start? Often our mind skips back.

“Don’t worry, honey, I’ve taken care of everything.” (Translated: The shoe-box in my closet with random papers makes sense to me.)

“Our financial planner is on top of all this.” (Translated: There is a good plan in place; I was uncomfortable bringing you into the discussion.)

It is not unusual for couples not to have discussed the likelihood that one would leave this earth before the other. Regardless of circumstances, let’s start at the beginning.

Please know there is a HUGE reward for tackling this important part of your life. There is great peace of mind on getting a handle on your money. This peace softens the rawness of our emotions, our anxiety, our grieving. Those feelings do not go away, but peace about our financial future is a good thing.
OUR FIRST EIGHT STEPS (Don’t think 8, think one step at a time.)
1. Don’t make any decisions for awhile.
2. Start tracking all your expenses. Basic budget forms are included in this site.
3. Pay your bills promptly.
4. Find out how much you have in assets and your liabilities as well.
5. Organize all financial documents
6. Talk to other wise people about their decisions and your choices.
7. Call Social Security to obtain survivor benefits. See Advocacy Resources.
8. Reinvest your husband’s money

1. Don’t make any decisions for awhile.
Times of turmoil are typically not times of clear thinking. I hear so many stories, from sad to horrific, of women who have made their circumstances worse by acting quickly. Yes, there are some instances where an immediate decision is necessary. One widow, facing a large mortgage, two leased car payments, and credit card bills had to put her home on the market, and secure less expensive housing in order to begin to get her financial house in order. Most advise not selling your residence immediately. Wait until your life takes on its new rhythm and then make that decision.

Widows are frequently preyed on with offers of great ‘deals’ on an investment. And a lump life insurance payment may seem like lots of money to a woman who has not managed finances before. One widow lost $200,000.00 in life insurance money in two years on a ‘hot tip’ from her husbands friend. Having been a stay-at-home Mom, she found herself in the job market sooner than she wished to be, poorer, but wiser.

If you have money to invest, look at our section on Investing and Saving for more in-depth information. Be especially careful of purchasing annuities as they are an expensive tool that results in your money later going to that company, not your family.

Be alert to the temptation to be an impulse buyer as a source of comfort. Yes, you are hurting, but increasing your credit card balance is counter-productive at best and lethal to your financial future and credit score at worst. Take a long walk, watch the sunset with a cup of tea, take comfort in God’s creation or create a simple scrapbook. True comfort is free.

2. Start tracking all your expenses.
Are you a paper and pencil person? Do you like computer tools? Fortunately you have lots of easy to use resources. If you and your husband kept a budget, staying with that method will simplify your life when everything seems to be in a tail spin.

If you did not keep the family books or participate in the process, never fear. YES, YOU CAN! If you are a paper and pencil person, let’s walk through the process together. If you wish to use the computer, you might go to our ‘Basic Budget Tools” site and explore some possible tools.

Let’s walk through the paper and pencil method.

Download and copy our Monthly Budget forms, page 1 and 2. I have included them with permission from Crown Financial Ministries, an excellent resource of financial tools. I suggest stapling these inside a manila folder, one on each side and keeping it in a convenient place. For starters, open it each day and simply record in the date box coinciding with the category, the dollar amount you spent that day.

Sample_Budget.pdf (Right Click- select “Save Target As”)

Don’t get distracted or frustrated by the fact that you do not know what your consistent monthly income will be. You need not have established a basic budget yet; in fact this first step will help you do so.

Just get started writing every thing down.

While this step requires no mathematics, no profound economic insights, not even 5 minutes a day, IT IS THE SINGLE GREATEST STEP YOU WILL TAKE TOWARD FINANCIAL FREEDOM.

At the end of each month, as you total each category, you will see your real financial behavior. Then you can ask yourself the question, “Is this what I want?” “Does this reflect wise balances for my future?” “What changes can I make?” “What changes must I make?”

After a few months, download Income Allocation from our Basic Budget Tools site. Use your findings and decisions to establish your budget.

Congratulations! You’ve started! It gets easier, and–trust me–becomes actually fun!

3. Pay your bills promptly.

Many widows are surprised to discover that they have little credit history. Bank accounts and credit cards may have been in their husband’s name and that worked fine. However, it may be difficult to open accounts or get a credit card in your name, given this circumstance. Having a credit history–a good one–is important it todays world.

If a bill is specifically your husband’s, you may inform the source of your husband’s death and tell them it will be paid with the settlement of the estate.

If the bill is in both names, or, of course, yours, pay it promptly. This may seem difficult in the midst of all you need to do and the state of your emotions. However, it is a simple act that will aid you in the long run. Your credit score is affected by the timely payment of bills. On-time payments count for 35% of your credit score. Also, the less debt you owe on you cards, the better your score will be. If you must, at a later time, say, purchase a car by borrowing funds, your interest rate will be affected by your credit score. If you have no credit history, securing one credit card, using it judiciously, and paying the entire balance before the deadline will start building your credit history.

In order to check your credit score, we have listed the three common credit score companies in “Advocacy Resources.”

4. and 5. Find out how much you have in assets and your liabilities as well.
Finding and organizing your financial documents can be simple, hard, surprising, and time consuming. Just remember, YES, YOU CAN!

One son, while helping his mother, emailed Widow Connection stating that it took one year for him to track down all his father’s obscure investments after his death. Thank God for a persistent son!

We have included two forms in “Basic Budget Tools” (List of Debts and Your Financial Statement) that you may download to keep records as you work through this process.

There are a few sources that are helpful in the ‘finding’ process: past tax returns, the benefits administrator at your husband’s job, your husbands accountant or lawyer, and simply opening all the mail carefully. The benefits administrator should be able to explain the details of your husband’s pension, 401 (K) and life insurance plans.

It is not uncommon during this step to discover a new emotion creeping in alongside your grief, anxiety, and fear–anger. Oh, my dear sister on this journey, you may discover that your husband was overly optimistic, not practical, talked of a will but never made one, or any number of unpleasant to smelly surprises. Your anger may be justified. Your disillusionment may be real. Your husband’s choices may have hurt you. That is, however, the past. I have three suggestions:

Go to his grave-site and talk it out–be real.

Forgive. If you are a believer, remember that you have been forgiven much. His clay feet, clay wallet, and clay bank account are the results of him being human. It is unlikely that he created your mess on purpose.

Roll up your sleeves, sharpen your pencil and your mind, and prayerfully move forward.
6. Talk to other wise people about their decisions and your choices.
We ask good cooks for their recipes; we ask financial advice from those who’ve done it right. Get information from lots of sources. Get references from friends and associates about good certified financial planners. I asked three different planners what they would do with a specific sum of money given my needs and goals. The proposed plans I received were important information in making my choice. Before choosing a financial planner:

Interview at least three

Check their reputation

Consider a fee-based CFP first (i.e. advice not based on selling a product).

Be especially careful if considering a friend or relative.

I found it helpful to read lots of financial papers and consumer magazines. Also talking with other widows about mistakes they’ve made and hearing what they wish they had done differently helps us sort our choices.

7. Call Social Security to obtain survivor benefits.
See Advocacy Resources for contact information. You may make an appointment and go to your local office, or in some cases accomplish what’s necessary over the phone. If you were both collecting social security before, you will receive only the greater of the two benefits. If you are collecting retirement income from another government fund, you must choose one and cannot collect from both. In my case, I am not eligible for either my social security or my husbands as I am a retired public educator.

8. Reinvest your husband’s money.
If you are not ready to make long term choices, park your money in a high-yielding CD until you are more comfortable making decisions. Often life insurance companies will offer to put your money in an account and give you a check book to draw on the account. Your guaranteed interest rate will be low. I resisted the temptation of ease to opt for a higher return elsewhere. In my case, the lump disbursement box to check was in small print in an obscure location. Also the salesman of the policy insisted that the check be mailed to him upon which he would bring it to me. (In other words, he wanted to sell me an annuity.) I had to be quite forceful in order for the check to be mailed directly to me, stress I certainly did not need at that time. As I mentioned earlier we as widows can discover we are very important to investment institutions and salesmen/saleswomen of their products.

Beware of new friends who are interested in your financial needs and future. Just because an individual worships where you do or is known by your friends does not make them a sound or wise financial planner or investment advisor. Read, learn, check the product and the person out. While you may have missed some money by leaving it in a safe CD while you were becoming informed, in that learning time you may avoid putting money in an unwise place with high costs for moving it out to a place more appropriate for your needs.