Creating a financial plan early can alleviate stress when times are tough. The loss of a spouse can be devastating.
It is more than just managing the personal loss of a loved one—but that of a life partner, co-decision making, fellow parent, best friend and financial partner. For some, it can kick off another phase in their lives, one of clear financial future, although laced with the sadness that comes with loss. For others, it can be an incredibly traumatizing time, especially when there were no clear financial plans in place before the passing.
Over the past few years, I have seen many families endure and adjust to the loss of a spouse, due to the pandemic. I have seen homes thrown in disarray and families in a state of confusion. I have also seen seamless cases, with minimal paperwork and an overall relatively smooth exit of their loved ones. In either situation, the one constant is that you are suddenly making decisions on your own around funeral costs, living arrangements, debts, investments, your children and your work.
You may no longer be able to afford your home and your children may have fewer opportunities than they did with two incomes. Suddenly the things that were manageable with two people become the burden of one person. This has made me realize how important it is for individuals and families to be properly prepared for this unexpected life event, regardless of age.
For young people, this may feel like a really uncomfortable conversation to have. Young people are typically the upwardly mobile group, exploring all that life has to offer, beginning a career, raising children, looking at first mortgages, best rates for long term planning and moving from one part of the world to another. They are not accustomed to dealing with spousal or partner death. Many older adults on the other hand may be working diligently to pay off their mortgages while the rates are low. They are also typically foregoing spending in other areas, taking out the value of their homes and borrowing against the equity to buy second properties or to assist their children with first time homes.
Whatever the age bracket one may be in, making the time now with a clear mind to put proper plans in place will help provide comfort and peace of mind, knowing you don’t have to worry as much, should something unexpected arise.
If this is something you have not considered previously, it is not too late to get started using the following steps as a guide:.
- Have a conversation: Talking with your spouse about where you stand financially is a good place to start. Have conversations to discuss the various possibilities. Take time to get in touch with a financial planner and have conversations and clear plans regarding your money. Based on an assessment of your current financial health, your financial planner will be able to advise what you need to do and how to include your spouse in your financial plan. Discuss the what-ifs, prepare for the unknown and protect yourself and your spouse for all possibilities.
- Update all necessary information: As a couple, ensure you and your spouse are both aware of your collective banking details, including your debt, mortgage, assets, pensions, and beneficiaries. Do you have protection in place should you lose income, find yourself as the sole owner of credit cards, or have a mortgage or vehicle debt? You both should be aware who your insurance providers are, what your coverage is and when and if it expires. Ensure you have an updated will, with your spouse properly designated where appropriate. Many times, these things are simpler and more affordable than many people believe. Do not assume anything. Ensure you are well informed.
- Utilize the protection offerings your financial institutions provide: Various financial institutions have diverse packages to support individuals and families and help them properly prepare for the future. Engage the services of certified financial planners and insurance providers to protect you before something happens and to help you through the process in the case it does.
The more prepared you are financially, the less stress you will face through these life changes. Having financial peace of mind has no specific dollar value. It is a sense of calm that ensures the fundamentals are looked after and you can take care of the personal needs of yourself and your loved ones.