“Barbara, I don’t mean to pry,” said her family’s long-time attorney, “but did you or Roger manage your home finances?”
Two weeks earlier, Barbara lost her husband of 30 years only to a heart attack. The emotional toll has been terrible, but still she knew the importance of this question. Barbara worried about it often. “It was Roger,” she replied. “He wrote the checks, paid the bills, managed the budgets, everything. And I’m not even sure how to order new checks. What should I do next?”
When the spouse or partner who handles the monetary for a household is no longer there (for any reason, including death and divorce), it can make the other person feel extremely vulnerable. Learning how to manage the day-to-day financial responsibilities as well as understanding how to set and reach long-term security goals can be overwhelming, particularly when stress levels are high and emotional turmoil clouds a person’s thoughts. The good news is that any major financial decisions do not have to be made immediately. In fact, it is usually best to wait out the storm of stress and grief before beginning to tackle big issues, like selling a home or how to best use a life insurance payment towards financial security.
Compared with 30 years ago, people seem to be more aware of the basics of balancing a checkbook, paying a mortgage, understanding their credit score, and accessing their money electronically. Yet, for large segments of the population (e.g., Baby Boomers), the major financial matters are being handled by one spouse/partner or the other. When life transitions occur in settings like this, someone may need direction and a whole lot of education to deal with a new financial reality.
For example, changing from a two-person to a one-person household does not cut expenses by half. The rent or mortgage still needs to be paid. The food bill will be less but the fixed costs remain. That new car payment does not go away, and home utility costs do not drop by much (if at all—will the cable bill decrease? Not likely!).
Divorces present separate areas of concern. If joint accounts are not separated expeditiously, one former spouse may be exposed to the risk of the other’s financial missteps. For example, if a former husband declares bankruptcy after the divorce, and his name is still on a joint account or mortgage loan, this may well result in stress, money, and anger for the former spouse.
Financial advisors like Isakov Planning Group know how to help people facing life transitions. We know what help to provide, and when to provide it. Our experience and fiduciary responsibility to our clients enable us to offer one-on-one coaching sessions or even group seminars and workshops for people who need to gain a handle on their finances and into a position of empowerment or feeling in control. We can help create a new budget for families whose incomes and expenses have changed dramatically. Along with income changes, tax planning strategies may be altered as well.
Contact Isakov Planning Group to learn how we can help ease the way after life transitions into a less foreboding financial future.