It is challenging to manage personal finances when your spouse passes away. It may not even be the first thing on your mind when that happens to your family. You could be making arrangements, talking to family and friends, and even comforting your children if you have any. The point is that when your partner dies, money might not be an immediate concern. It might also be informative to know that the medical news shares that heart disease is the leading cause of death for most Americans.
However, you would need to get around to it in the near future. It could be a lot sooner when you have young children at home you have to look after. Apart from the emotional support they need, there is no way around the fact that you would need to get your finances in order so you can provide for your children.
This is a lot harder when your spouse had a very active role with your finances. Though it is advisable that couples always know what the other one is doing, there are times where you decide to focus on specific areas in your household. You may not manage personal finances but you are the one responsible for keeping the household running and attending to all the needs of your children.
That will all change since you need to make sure that you are able to pick up the pieces for you and your family. It is a lot easier if you have no children yet but the pain will make it challenging to try and move forward. There is no easy way to go about it but there are steps you can take to help you moving in the right direction.
Allow yourself to grieve
One thing you need to do before you manage personal finances is to allow yourself to grieve. This is part of the process you need to go through. However, it is not a destination. Do not stay in that state for extended periods of time. This is not to say that you cannot grieve for your loved ones because you will always remember them for as long as you live but you have to move on as well.
If that process includes getting away for a few weeks then do so. If it means crying at night and visiting your spouse’s grave, be there. You have to go through that stage in your life. This is because healing, acceptance, and being able to move on are crucial in helping you live your life after a devastating loss of a dear person in your life.
If you choose to ignore this stage, it can come back to haunt you when you least expect it. It could be as simple as breaking down when you hear their name, crying uncontrollably when you see someone that looks like them. These things can still happen even after you grieve but you start to slowly accept and lower the chances of them happening when you give yourself time to feel the grief of your loss.
Gather all relevant financial documents
The next step you can focus on is to gather any and all relevant financial documents you would need in understanding and managing your finances. One of the first documents you need to get your bank account statements. What you might have with you at the moment is your household budget. That is a good start but you also need to make sure that you are on top of your savings.
Most of these would be deposited in the bank and if you have more than one, you need to have those statements. It is easier if you can access them online but if that is not possible, you can go to your bank and request for it. Get a record a few months before your spouse died so you can get an idea of how your finances are growing.
Life insurance policies are next and is quite important as your spouse dies because it gives you an idea of how much you will be getting. You would need to look for the original insurance policy to get the amount by which your spouse was insured for. This is normally a sizeable amount which can go into your children’s college fund, for your own retirement fund, or in paying down the house.
Audit your finances
To manage personal finances after a loved one passes away, you need to take a look at what you are dealing with at present. Audit your finances to have a better understanding of where you are at present. If you were able to gather all your financial documents, this would be a lot easier to go through. You need to look into each and every one of them to have a better understanding of your finances and move forward.
Your household budget is normally a great place to start because it already has a detailed version of your current income and expenses for your family. Next step is looking at your bank accounts and any other funds you were both saving for the future. This is usually not included in your household budget and in separate forms.
There is also insurance money that you could be getting after your spouse dies. This fund is for you and your family and will be a big help especially if you have children. More than the money at hand, you also need to look at your payables and other debt obligations under your name. This gives you the overall picture and points you in the right direction.
Revise your household budget
One of the very first changes you need to make to manage personal finances after the death of a loved one is to revise your budget. The previous one takes into consideration income and expenses for both of you when your partner was still alive. Now that it is just you, and your children if any, you need to reflect that change in your budget.
There is a big possibility that you were a two-income household when your spouse was still alive. Now that you are alone, you need to start making changes in your budget when it comes to your income stream. You might have to cut it down by half if you have been putting in almost the same amount into your budget every month.
This could sound like a challenging to do on top of having to deal with the loss of a loved one. However, you also need to cut down on some expenses and it could help you manage your finances better. It may not match the decrease in your income but you at least have some elbow room when you start making adjustments on your budget.
Manage personal finances better with a concrete action plan
Now that you have an idea what your budget looks like and where your funds are, you can move forward and start creating a plan. It can be geared towards creating a financially secured future for your children or even in paying down all your debts. You can also look at how you can add a little extra money into your budget every month with a side business you can manage.
It is tough to try and manage personal finances after your spouse dies but you need to make sure that money matters are intact for your family’s sake. It is not something you throw out the window but rather something you need to focus on to ensure a great future for you and your children.