Newly Widowed: Tips for Dealing with Tough Financial Decisions

When the death of a spouse happens, it is often a harrowing experience in more ways than one.

Not only are you dealing with the emotional fallout of losing your partner, but you also have to deal with the financial fallout.

Many marriages and couples thrive on a “division of labor.” For example, one spouse might be in charge of the groceries while another is in charge of the budget. It is also not uncommon for the husband to be the primary breadwinner, while his wife works part-time or tends to home-life. 

Whether or not this describes your situation, one question is certain: “How do I move forward?”

In this article, we’ll explore the challenges and financial considerations that are unique to widows. Here’s what you need to know.

First, Give Yourself Time to Grieve

If you are newly widowed, chances are that you haven’t had time to process your loss.

Other responsibilities have come to the forefront. Planning a funeral, commemoration of life, and burial service can leave you feeling sleep-deprived and overwhelmed.

But here’s the thing: it’s impossible to think clearly if you are exhausted and grieving. Remember, the worst financial decisions are often made when people are in the midst of crisis, despair, or hopelessness.

So be intentional about taking the time to take care of yourself.

Everyone mourns in different ways. Acknowledge and accept that. Healing doesn’t happen overnight. 

Not only is the grieving process important so you can think about your finances clearly, it is also good for your soul. 

Of course, there are some financial matters that are more pressing than others such as paying the mortgage or paying the electric bill. During this time of grief, consider breaking down your financial tasks into three categories:

1. Urgent 
2. Soon
3. Later

By approaching your finances this way, you can make sure that important business items don’t fall in-between the cracks while also giving yourself the space and bandwidth to mourn your loss. 

7 Money Management Considerations for New Widows

It is never easy to pick up the financial pieces after the loss of a partner.

Instead of viewing your financial responsibilities as a singular, overwhelming mountain to climb, consider thinking of it as one actionable step after another. 

1. Step one: Focus on the transition period.

There will be new budget limits after a spouse passes away. Not only have you lost a source of income, but there are also fewer expenses for food, gas, etc. If your spouse handled the budget and you don’t know where to start, I recommend reading my previous post: how to make a realistic budget that actually works.

Even if you weren’t responsible for the family books or participated in the process, you can do this! The article was written to simplify the budgeting process to help you thrive in any situation. 

The most important task during this process is to understand your new monthly expenses as well as your new monthly income. Without these two figures, it will be impossible to truly get your budget back on track.

2. Step two: Understand your rights and obligations.

Most Americans have some form of debt: credit cards, car loans, personal loans, or student loans.

However, just because you were married, it doesn’t automatically mean that your spouse’s debts are now your debts.

It’s not uncommon for credit card companies and other lenders to pressure the surviving spouse to pay off the remaining balances of a late spouse. Before assuming any debts, it’s important to meet with an estate attorney so you can understand what obligations you have and don’t have to worry about.

3. Step three: Make a claim.

Do you own any life insurance policies? If so, now is the time to contact your life insurance agent and make a claim.

Chances are that they will offer you an account to hold the money, but these accounts typically are not insured and have low-interest rates.

Consider rolling the money into a higher-interest savings account like CIT Savings Builder or into any account that is backed by the Federal Deposit Insurance Corp.

Keep in mind that federally insured accounts only protect you up to $250,000 per bank, so if your life insurance policy is for more than that, you may want to consider using multiple banks.

4. Step four: Apply for benefits.

Depending on your age, your late spouse might have been already collecting Social Security benefits. After the passing of your spouse, you can expect a one-time $225 death benefit from Social Security.

If you have children who are still minors, then you will want to schedule an appointment as soon as possible with your local Social Security office. You and your children may qualify for survivor benefits, but the benefits begin at the date of application, not the date of death.

Meeting with your local Social Security office will ensure that you are informed on your options and can have your benefits calculated appropriately.

5. Step five: Talk to other people.

Do you know anyone else who is a widow? Try reaching out to them to ask about their decisions and choices. What do they wish they had done differently? What do they recommend that you do?

Not only is it wise to learn from someone who has experienced a relatable loss firsthand, but you might also find some emotional healing through this process.

Another idea is to meet with a certified financial planner, especially if you expect to receive a large lump sum of money from a life insurance policy. It might be tempting to discuss finances with family members, and while there’s nothing inherently wrong with that, having an objective third party can help you make wise financial choices in a time of chaos.

6. Step six: Be loving, but firm.

Unfortunately, surviving spouses are often approached by other family members who ask about receiving an inheritance.

This can be especially common for widows who have grown children or grown step-children. They might say something along the lines of, “If my Dad were alive, he would help me with this need right now.”

This type of pressure can be inappropriate or outright cruel.

Until you have your bearings, it is ok to keep money matters to yourself. Of course, if your husband had a will, then you should honor it. But in other situations, it is ok to take your time to fully understand your new financial landscape.

7. Step seven: Watch out for scams.

This is why it’s so important to focus on the transition period first and to understand your obligations and rights.

It’s ugly, I know, but there are many scam artists who intentionally prey on the recently bereaved. They do this because of the tumultuous emotional state and because they hope you haven’t had a chance to understand your legal obligations. 

The Bottom Line

Fortunately, the principles of finance are the same whether you are married, single, or widowed.

At its core, finance boils down to money in vs. money out. 

If you’d like more help to get your budget back on track, I recommend reading how to make a realistic budget that actually works.

Do you have any other questions? Do you have any insights that you think would be helpful for other readers to hear?

Please let me know in the comments section below! 

At The Budget Mom, we are focused on building a supportive and encouraging family. Feel free to join our Facebook Group to meet other like-minded moms.