Many Americans are all too familiar with the pain and difficulty of divorce or widowhood. Divorce rates remain persistently high. Additionally, the age of the average widow is significantly younger than you might think. So, recovering after the loss of a marriage, whether from divorce or the passing of a spouse, is a major issue with wide reaching emotional and financial implications. The following is some practical guidance to help you, or someone you care about, grieve the loss of your marriage, while keeping yourself on solid financial ground:
- Work with YOUR trusted professionals.
- Create decision space.
- Align your resources with YOUR values.
Work with Your Trusted Professionals
Assuming you have an established relationship with an accountant, financial advisor, or attorney; whom you trust, I would lean on those professionals when seeking help. There are too many unscrupulous sales professionals out there willing to take advantage of a person who’s experiencing the “fog” that comes with grief. When we’re grieving, we’re vulnerable. So, it’s important to seek and take advice only from people that have proven their competence and genuine concern for our wellbeing. Seeking advice from someone with whom you already have a trustworthy relationship can minimize those concerns. Also, working with professionals that you already have a relationship with can save a lot of time and effort because they already have the information needed to help you get organized, and make informed decisions.
I realize, in the case of divorce, one spouse may not want to continue working with the accountant, financial advisor, or attorney they had worked with while they were married. I can appreciate that. In fact, studies show that the vast majority of women seek out a new financial advisor after a divorce or the death of their spouse. If you feel the need to seek out a new professional relationship during this vulnerable time, look for referrals from trusted sources such as family, friends, or your church family.
Decision Space
First and foremost, financial stability is a matter of consistently making sound financial decisions over time. Unfortunately, we tend to be much less discerning when we’re emotional. There is a portion of our brain that is designed to favor action over contemplation. For example, if we see a mountain lion while we’re enjoying a day in the woods, our minds don’t say, “Hmm, I should investigate and carefully weigh the facts.” Our minds simply tell us to get out of the situation. This strong bias for action during scary times can lead a widow or divorcee to make financial decisions that are not in their best interest long term.
The antidote for emotionally driven action is trustworthy advice and plenty of time to think. To that end, I strongly encourage those who have to start again to make two lists. The first should be a list of decisions that will need to be made in the next 12 months. The second should list those things that can be put off for 12 months or more. As stated previously, when emotions are high people feel an overwhelming need to “do something”. When feeling this way, look at your lists, and work with your trusted professionals to take care of only what needs to be done now. Do what you can to put off high dollar decisions that aren’t imminent for a year or more. Doing so allows you to make progress, while giving “the fog” time to dissipate before approaching bigger decisions.
Align Your Resources with Your Values
I say it all the time, but I’m going to repeat myself. The key to financial wellbeing is aligning your financial resources with your personal values. When forced to press on alone after marriage, there is inevitably a shift in values and priorities. You don’t have to be married long to know that marriage is a give and take, and that each partner’s preferences should be reflected in financial decisions.
Though it’s painful moving on after a marriage, it creates an opportunity to think about what you want to focus on. The more you can align your personal finances with your new priorities, the more confident and resilient you will be. So how do you personalize your personal finances, particularly if your spouse was your chief financial advisor? As difficult as it can be, you have to get it all out on paper! By that I mean, every investor needs to have a monthly spending plan, and an overall financial plan. The monthly spending plan makes sure your day-to-day decisions align with what’s most important to you. The overall financial plan makes sure your long-term financial picture aligns with your wishes. For example, if you want to prioritize a big trip with your best friend, but you’re spending all of your disposable income eating out, your monthly budget will reveal that to you so you can adjust your spending choices and start making progress towards what matters most to you. Similarly, if you want to experience a work optional lifestyle, your financial plan will tell you how much you need to save to get there. So, you might decide to hang onto your old dependable car a little longer so you can save more in your 401(k). Personal finance frequently involves difficult tradeoffs, but the good news is, you’re in charge! Getting it all out on paper is empowering. (You can find a really useful form for getting started with your monthly planning here: https://www.ramseysolutions.com/budgeting/useful-forms)
Conclusion
Unfortunately, grieving after a divorce or loss of a spouse is very common, and it’s wrought with extreme emotional and financial challenges. The value of having a trusted professional in your corner during this process can’t be understated. A trusted professional who’s familiar with you and your finances can help you get organized so you can determine what needs to be dealt with right away and what you can put off. Knowing what you can put off allows you to avoid costly mistakes associated with emotionally driven decisions, and gives you an opportunity to reflect on what’s most important to you as an individual, so you can do the important work of making your personal finances more personal!
