Tag Archives: Marriage

Suddenly Single: Planning to Go It Alone

Untitled-logo trustMost of us cannot imagine the sudden loss of our spouse. Yet, difficult as it may seem to accept, U.S. Census data indicates that the overwhelming majority of married women will be on their own for a significant number of their later years. Should this happen to you, you might be thrust into economic self-survival at a time when you may feel particularly vulnerable and least able to cope. Nevertheless, serious decisions would have to be made, often having a lasting impact on your future financial well- being.

Planning for the Unimaginable

There is an unpredictable aspect of “sudden loss” in that we never quite know how we will react to certain events until they actually occur. While no one can ever be totally prepared to deal with personal trauma compounded by legal and financial matters, there are steps you can take to help you navigate through this difficult period.

The key is to find a way to help provide structure in your life at a time when structure may be disintegrating.

It Happened. . .What Do I Do?

When the initial shockwaves hit, there are matters that will require immediate attention: notification of family and friends; funeral arrangements; and contacting an attorney to review the will and handle the legal aspects of your spouse’s estate. Let your closest friends and most trusted advisors help you with some of these details and short-term decision-making, but proceed with caution regarding major financial decisions such as whether to sell your home, borrow or lend money, invest, make major purchases, and make work/career changes.

During this period, you will most likely face competing demands on your financial resources. If your spouse was the primary income earner, it may take some time to assess your financial situation. During the first few months, pay bills that need to be paid, but spend cautiously, paying attention to cash flow and liquidity.

Rebuilding After the Shockwaves

Certain timetables (e.g., timely filing of tax returns) can’t be overlooked, but much of the financial recovery process should be orchestrated to match your emotional recovery. Some of the important aspects that will have to be addressed eventually will include assessing the needs of dependent children; making housing decisions; determining your income needs; making decisions about insurance settlements; evaluating your insurance needs; and managing money on your own.

Many of these decisions may flow naturally from an appraisal of your needs (and/or desires) to participate in the workforce. Will you want to work? Will economic necessity dictate that you must work? If you are currently employed, will you stay in the same position? If you have not worked for some years, how well will your skills fit the job market? Will you need to acquire more education or enhance your technical skills?

While professional advice will be helpful, don’t allow yourself to be pressured in areas in which you need more time. Your goal should be to develop a sense of command and control concerning your financial future. Align yourself with advisors who will have the patience to work with you at your pace, advisors who will help you gain the knowledge and confidence necessary to go it alone.

Obviously, the earlier you begin to educate yourself concerning financial matters, the better prepared you will be to withstand the impact of facing sudden loss. The quality of your life may depend on your financial skills and your willingness to take responsibility for managing your own financial affairs.

If you have questions about the financial implications of divorce, email our Certified Divorce Financial Analyst, Marcia.Henderson@syb.com, for help!

Resource information provided by Financial Media Exchange.

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6 Money Mistakes Newlyweds Should Avoid

With wedding season upon us, many newlyweds will soon be managing their finances as a pair. The American Bankers Association is encouraging couples to waste no time addressing how they will handle money issues as spouses and financial partners.

“Developing a financial plan can often take a backseat to the excitement of a wedding,” said ABA president and CEO. “But it’s important to remember that this is not only a marriage of hearts but also a marriage of finances.”

To help couples start their journey on strong financial footing, ABA warns consumers of these post-wedding money mistakes:

  1. Avoiding the money talk. Discussing your finances can be a bit uncomfortable for many couples, but those who tackle it head on will be better for it. Understand your partner’s financial goals and spending habits. While you may have different answers, this conversation can help you develop an approach to money management that works for both of you.
  2. Not setting a budget. A mistake many couples make is not establishing a budget early on. After assessing your finances as a pair, determine how you’ll spend your money each month. Are there certain expenses that you should be cutting back on and others you should be saving up for? Coming to an agreement on these things and setting a budget will be beneficial for the health of your bank accounts and your relationship.
  3. Not having a plan for your accounts. There is no ‘right’ way to manage your accounts. Couples can choose to have exclusively joint accounts, a joint account as well as separate accounts for saving or personal spending, or keep things entirely divided. Discuss your preferences together and decide what makes you both the most comfortable.
  4. Failing to set up an emergency fund. Life is full of surprises and unfortunately, some of these surprises can be expensive. Having an emergency fund will help you avoid precarious financial situations should something come up. It’s important that you decide together how you’ll set aside the money.
  5. Not establishing a minimum cost for discussing big expenses. While not all purchases demand a conversation, more expensive ones that impact the family budget should. Determine what that threshold is as a couple. For any expenses above that cost, you both should be in agreement on whether it’s a necessary purchase.
  6. Forgetting to update your beneficiaries. Now that you’ve officially tied the knot, you should likely identify your spouse as the person who will receive the benefits of your will, life insurance policy and financial accounts like your 401(k), checking and savings. Don’t make the mistake of waiting for an emergency to arise to handle this.

    Resource Information Provided by the American Bankers Association