Positive Steps for Facing New Financial Realities
Losing a spouse is a devastating experience. The emotional toll is difficult enough, but many widows also face looming challenges to their finances. According to the most recent data available from Congressional Research Services, 15.5% of widows aged 65 or older live below the poverty line, compared to 5.8% of married women. While there’s a lot that the recently widowed must process, it’s important to take a few key steps to ensure financial stability for the future. With that in mind, here are three financial resolutions for widows to take in 2024.
1. Intentionally Build Your Team of Financial Experts
Focusing on financial matters while you’re grieving can be difficult, if not impossible. The idea of setting financial resolutions for widows may seem overwhelming in your early grief. However, the sudden need for self-reliance makes it important to be structured and pragmatic in financial affairs. One of the wisest financial resolutions for widows is to assemble a team of professionals to build a competent framework for money management.
Widows have many options for experts specializing in certain aspects of finances, such as estate planners, elder care specialists, credit counselors, and insurance agents. While all of these professionals may be helpful for different needs, it may be most beneficial to begin with a financial advisor as the foundational professional on your team – ideally, a fiduciary who is legally bound to work in your best interests.
2. Document Your Finances and Goals
Many widows are used to managing their family’s finances and know the ins and outs of budgeting. However, others may have left that responsibility to their spouse while they were living. If you find yourself in the latter category, your fears related to managing your finances or running out of money may be very real.
One of the strongest financial resolutions for widows to assuage those fears is to put finances and goals for the future in writing. There is power in putting your goals in writing, and doing so allows you to establish total clarity about your current financial situation and help you devise a blueprint for maintaining financial security going forward.
It may be helpful to break this resolution into three smaller steps:
Get Clear on Your Current Financial Status
One of the key financial resolutions for widows in 2024 should be to make a detailed, written inventory of their finances. This starts with gathering account information and documentation, including wills, bank statements, life insurance policies, and investment portfolios.
With that information in hand, you can begin making a list of your assets, debts, and expenses. Assets include bank accounts, investment accounts, real estate, vehicles, and personal property. Liabilities and debts may include mortgages, credit balances, personal loans, and outstanding bills or taxes. Common monthly expenses include rent, utilities, transportation, insurance premiums, loan repayments, discretionary spending, and other obligations.
Once you’ve analyzed the various components of your finances, make it a point to itemize the income you expect to make in the future, whether from odd jobs, retirement fund distributions, Social Security benefits, or income-generating investments. You want to have an understanding of all your resources and where they will be needed.
Consider Your Future Goals
Once you’ve taken full stock of your assets and liabilities, your next step is to outline your financial and personal goals for the future. This task is particularly important because your spouse’s death can impact the goals you set as a couple. You may need to reframe these goals to reflect your new reality.
Your primary goal should be to establish financial security for yourself and any dependents you have. This includes making retirement plans, which you likely discussed with your spouse while they were alive. Another of the most critical financial resolutions for widows related to this goal is to create and contribute to an emergency fund to cover unforeseen expenses.
Subsequent goals can include estate planning, debt repayment, ensuring adequate housing, and setting investment objectives. However, it’s important to set aspirational goals as well: traveling, furthering your education, taking on hobbies, donating to charities, and nurturing relationships with families and friends.
Create a Realistic Budget
With your current status and future goals in mind, your next task is to set a reasonable budget. Your budget should categorize your various expenses, income, contributions to savings, tax budgeting, investments, or anything else that involves a financial transaction.
A financial advisor can be especially helpful in this stage, particularly one with experience helping families and individuals navigate life transitions like the loss of a spouse.
3. Review Your Investment Portfolio
A person’s investment goals can change significantly after the death of a spouse, as they’ll likely face decreased income and increased expenses. On the other hand, they may inherit assets or insurance payouts that can help with future finances.
Whatever happens, one of the most prudent financial resolutions for widows is to rethink your investment holdings to reflect your current and future needs. You may feel less inclined to take on as much risk as you did when you were married, or you might want to take on more risk to accelerate growth or make passive income.
A financial advisor can help you keep this resolution — in fact, they’re indispensable for this purpose. Your adviser can serve as a partner and guide for key investment decisions, having experience tailoring portfolios for people from all walks of life. While a fiduciary helps set up the structure and framework for your financial future, a financial advisor with good references and a strong track record can find ways to increase your wealth as you tackle this and other financial resolutions for widows.
Financial Resolutions for Widows to Move Forward with Confidence
Losing your spouse is one of the most difficult life transitions a person can experience, and it can be difficult to focus on practicalities like money matters. However, financial uncertainty only adds to the fragility many widows already feel, so it’s important to have a plan for your own security. These financial resolutions for widows can help get you through the hardest times and set you up for a more prosperous future in the new year and beyond.
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