Managing Finances on Your Own

By Beth Allwood - September 25, 2017

Losing a spouse, whether by divorce or death, can take a big toll, both emotionally and financially. It's important to understand your assets and debts, especially if your partner managed the finances. Below are some things to keep in mind as you face financial decisions when these life changes occur.

Take Your Time

You may have some big decisions to make when you're in charge of the finances on your own, but make sure you think them through carefully. Don't let emotions rule your decisions; instead, take your time and talk to a trusted person who can help you weigh pros and cons of financial actions.

Create an Action Plan

After some of the emotions have settled, it's important to plan for your new financial situation. That includes creating a new budget and considering how your retirement needs will change. In divorce, some of your savings may go to your ex-spouse. As a widow or widower, you may need to manage benefit payments you receive.

Stay Focused

Your income may have changed, but your long-term goals for security should stay intact. The life change could mean finding ways to set aside more money for retirement. Be careful to follow your budget. The temptation to use credit cards can be greater when your income is reduced. However, accumulating debt now could have a negative long-term effect on your financial future.

Pay Attention to Details

In addition to the larger financial decisions mentioned above, you will have a lot of details to manage when a family change occurs. It's important to review the beneficiary and ownership information all accounts to determine whether you need to make some changes, including retirement/pensions, transfer on death, IRAs, wills, personal property and auto insurance.

Finally, even though you're facing financial decisions on your own, it doesn't mean you have to go it alone. A good support system of family and friends can help you deal with the emotions you're experiencing. For money decisions, talking to a financial professional might be worth your time and effort.