In my last post, I discussed the benefits of having a financial “buddy” to help you over the 12 to 18 months following the death of your spouse. I highly recommend finding someone you trust to help you carry out some of the financial decisions that you’re going to have to make during that time. However, I fully realize that sometimes it simply may not be possible to have someone by your side at all the meetings with bankers, accountants, and such. Here’s some tips to help you go through the process when you don’t have a buddy by your side.
First things first
There are a lot of financial decisions that can wait for some weeks or months, but some things have to be attended to almost immediately. You will have to perform a financial triage and begin by taking control of the absolute essentials. The essentials are your monthly bills, your mortgage and loans (if any), and your home, car, health, and life insurance. .
Go through all your regular bills and familiarize yourself with them. For bills that vary from month to month, take a look at several months worth to get an idea of what the average expense might be. Here in Canada, heating bills can be all over the map depending on the season. You don’t want any surprises, so make sure you know what these bills will be like at their peak. If you don’t have paper records, contact the utility company and they can give you an accounting of what your annual bills have been.
While you’re going through the bills, make a note of when each bill is due. Many will be monthly, but some like insurance and taxes may be quarterly, semi-annually, or annually. If your cash flow is intermittent, you’ll want to make sure that you tuck away enough cash ahead of time for when the bills need to be paid. Make doubly sure that you know when any insurance payments are due and how much they will be. You don’t want to find out you’ve had policies cancelled because of missed payments.
If your spouse had a system of record keeping and bill payment, you’ll want to familiarize yourself with that. But don’t feel like you have to keep that system if it doesn’t work for you. Organize the bills and record keeping in a system that works for you. You could use colour coded files, set up a spreadsheet on the computer, or have a system of different binders and accordion files. The type of system might be different than your spouse’s, but get a system in place. It’s important.
As part of your system, you’ll want to get yourself a workbook or journal designated solely for your financial notes. Get yourself a nice one, in a colour or cover you like. Jot down reminders for yourself, and take it along when visiting the bank or any other financial institution. Get in the habit of taking notes in these meetings of important points discussed. You may also want to keep your book close to your phone so you can write down key points after phone conversations with your banker, insurance agent, accountant, etc.
Back to bill paying. I recommend getting as many bills as possible set up to be paid automatically from one of your bank accounts. You may find in the first year of widowhood that you can be forgetful at times or (more likely) you just don’t feel like doing some of these mundane tasks. Setting up your bills on autopilot will take this humdrum chore off your to-do list. If you’re unfamiliar with how to set up automatic bill payments online, just see someone at the bank you deal with and they can help you with this.
You will have to go see your bank early on to set up all but one account in your name. It’s a good idea to keep one joint account open for a while. In the coming months that you may receive funds in your spouse’s name – some last employment deposits, deferred bonuses, refunds of any type, and maybe even money owed from other sources. Remember, you still have access and control of a joint account, so keeping one open won’t be a problem. You can close the last joint account when you know no other transactions in your spouse’s name will happen.
To begin with, just focus on the general banking accounts. Changing the title on other assets such as investment accounts (including retirement accounts) can occur at a later date. The same goes for changing the title on your house.
If you still have a mortgage or any outstanding lines of credit or personal loans at the bank, you should meet with one of the bank’s lending specialists to discuss the particulars. If you had mortgage insurance or another life insurance policy, you may be able to eliminate all or the majority of this type of debt fairly quickly, a move I highly recommend. If it’s not possible to clear off all the debt, you’ll have to work with the bank to make further arrangements. I’ll discuss this specific topic further in future posts.
Cancel any monthly discretionary monthly bills that were your spouse’s. These are things like subscriptions and memberships. If they’ve been prepaid for a year or more, check to see if you can get a refund for some or all of the unused portion.
Lastly, don’t be surprised if you start getting financial advice from all sorts of people who feel compelled to help you. It could be friends or relatives, your neighbour, or even people at the bank you deal with. You’ll need to prepare yourself for people telling you what you should do with your money, your house and your life in general. If you find saying no to certain people hard, just say something like “that’s on my list of things to consider and I’ll be dealing with that at a later date.” But do not let anyone convince you that you need to make any major financial or lifestyle changes in the first year of widowhood.
For now, focus on the essentials:
- familiarize yourself with all the regular bills and expenses and the dates they need to be paid
- set up a system to keep track of monthly, quarterly, semi-annual, and annual expenses
- as part of your system, get a notebook to keep track of meetings and phone conversations you have with anyone regarding your bills and banking.
- get as many bills as possible set up to be paid automatically
- change most joint accounts into your name
- keep one joint account open until all the last income and expenses in your spouse’s name have been cleared.
- If mortgages and and other loans can’t be cleared immediately, set up an appointment at a later date to discuss making new arrangements.
- Cancel any subscriptions or memberships that were in your spouse’s name and see if any refunds on unused portions are available.
- Don’t let anyone one push you into making any major, long-term decisions. Practice telling people “no” or at least some form of “not now”.
