No matter how long I’ve been an independent financial adviser, I still feel slightly crass discussing something as prosaic as ‘financial advice for widows’ in my writing.
Part of that is my own hang-ups, but it’s also a reflection of the very simple reality that each person that has lost their spouse is experiencing their own, deeply personal, tragedy.
So to then waltz in throwing around terms like ‘financial advice’, ‘budgeting’, investing’ and ‘planning’ doesn’t feel terribly sensitive.
But, while a spouse passing away is undoubtedly one of the most difficult times of somebody’s life, I also believe that good, fundamental financial planning – done with empathy, sensitivity and awareness – can make a difference to the process.
Because not only is this period emotionally overwhelming – it can also be extremely financially daunting.
And this is so very true if you’ve never been the one who managed the household finances.
The Stress of Making Decisions
So now, all of a sudden, you’re responsible for making all of the financial decisions for you and your family.
Big decisions, small decisions – it doesn’t matter.
They all take a toll.
They all contribute to your stress and worries.
Often at a time when, honestly, what you’d rather do is just close the front door and not speak to anybody else for a few days (or months).
However, I also appreciate that, at some point throughout the process, people will need some help in working out their next steps.
Which is where this guide comes in. My hope is that this brief summary of how financial advice can help widows provides you with a (clearer) understanding of financial advice for widows.
If this then helps you navigate this difficult time – with all the decisions, considerations, worries and stress – then it’ll be worth ignoring my inner voice as it tells me I’m being crass.
Why Financial Advice is Crucial for Widows
Because, inevitably, when you lose a spouse, your financial situation will have drastically changed.
You’ll now be dealing with new expenses, changes in income, and the complexities of managing investments and debts.
Good, impartial, robust, independent financial advice can help you make informed decisions, all geared towards helping you make this next chapter of your life a safe, secure and meaningful one.
Here are some of the steps I suggest taking, at the different stages of the long adjustment process.
Steps to Take – Immediate
Even thinking about the financial side of things while the dust is still settling can be incredibly difficult. But there are some elemental items you should really consider sorting out in the time immediately after their passing:
- Tell The Groups Who Need To Know: There are a few groups you need to tell early on in the process. There are the Institutions – the banks, insurance companies, superannuation funds, any other group that’s involved in your financial life. institutions of what’s happened. Then there are the advisers – their solicitor, accountant and financial adviser. If you have an investment property, let the property manager know.You may also need to let Centrelink know, depending on your financial situation.
Retain copies of all correspondence for the duration of this entire process too – you never know when you’re going to have to refer to something that was said months ago.
We note down the time and date of any calls we make, as well as the name of the person we spoke to and notes of the interaction too.
This can be complicated by being able to access accounts and funds that are solely in your late partners name, so try to be deliberate as you work through this step.
Consider enlisting the help of a close friend that you can completely trust.
- Collect the Paper: There’s this bridge between the emotional impact of your loss and the administrative reality of the next steps – and this bridge is built of paper. So much paper. It’s best to start gathering it all together now, because you’re going to need it all.Collect the essential documents like their will, insurance policies, superannuation account details, photo identification (licence and passport ideally) and statements for any accounts. It might also help to have their birth certificate and, when it’s available, their death certificate too.
File these into groups if you can, or lean again on your trusted friend to do it.
These documents will be crucial for managing your finances and settling your spouse’s estate.
- Update Your Beneficiaries: It’s likely that you and your spouse has listed each other as the beneficiary of any financial account you held – so that if you were to pass away, the money would have gone to them. Unfortunately, that isn’t a possibility anymore, so it’s important to update these nominations for your own personal accounts. Things like any life insurance policies, superannuation accounts and investment accounts should be updated.It can be easiest to draft a template email and then send that to each of them separately. This email should also ask for them to provide you with the paperwork they require to formalise the process.
Creating a Budget
Ah, the ‘B’ word – budget.
There are a lot of people who are uncomfortable with this word. Maybe because it makes them feel guilty for not ‘being better’ at managing their money. Or perhaps they fear how it can restrict their ability to live their life their way.
As financial advisers, helping people come to grips with what a budget really offers is a big part of our work (the structure, when designed properly and rooted in your real life, gives you back control, freedom and confidence).
So I know that one of the first steps in managing your finances is creating a budget.
Even if you’ve never kept one before, the process of collating the information into one document will give you a much greater clarity on your situation.
Sometimes it’ll show you that your position is better than you feared – but just seeing it in black and white will immediately dilute your fears and worries about having ‘enough’.
And if it doesn’t, it’ll help crystallise in your mind what changes might be needed – and what can be done.
Having your own budget will help you understand your income and expenses, allowing you to make informed decisions about your spending and saving.
Here are some tips for creating a budget:
- List Your Income: Include all sources of income, such as salary, pensions, rental income, dividends, other and investment income.
- Track Your Expenses: Record all your expenses, including fixed costs like mortgage payments, school fees and utilities, as well as variable costs like groceries, entertainment and travel.
- Identify Areas for Savings: At some stage in the future, it will be important that you look for areas where you can reduce expenses and increase savings. Probably not right away, but if your budget is showing a big, red number at the bottom, then it might become more pressing to find a way to close that gap. Because that gap is what will constrain your options – not actually seeing it.
I’m going to draw a line under this part of the blog here – stay tuned for part two of this post about why Financial Advice is crucial for widows.
My hope is that by reading these two posts, you can start mapping out your first, tentative steps into this new chapter you find yourself in.
By following the steps outlined in this post – from the basics of financial planning, creating a budget, managing debt, investing and preparing for the future – we help you get to the point where you feel at ease with your money, and confident about the financial part of your future.
If you’d like to have a chat about your current position, you can use this link to find a time that works for you, for us to have our free 15-minute call.