Personal Finance, Relationships

How to Maintain Your Finances in Difficult Times

When my mother died, I worried a lot about my father. How will he cope? What will he eat? Despite my worrying, I didn’t need to worry much about his finances. His forethought saved his financial life, despite our family’s terrible loss.

Dad always has been a stickler for details. This carries over into his bill paying and investments. During their marriage, he was the one who took care of the bills. He was the one who managed the income. He was the one who made sure they could afford their comfortable life.

Of course my father reeled from the loss of his wife. We all did. Mom and Dad’s lives had meshed together well from the time they started dating. They had a good life together.

Two years later, dear Dad is slowly piecing his emotional life together. During this time, it seems he has ignored his finances. In reality, he has been able to rely on advice from his trusted financial advisor and the clear, efficient way he managed their money before and after Mom’s death.

Deposit money electronically

I remember when the miracle of automatic deposit became a reality. Ever since its inception, Dad faithfully used it for both his and Mom’s paychecks. When they retired, they set up their Social Security and pension payments to be deposited automatically too. By never having to step foot in the bank to physically deposit a paycheck, it was easier for him (and Mom) to resist taking cash out.

Pay bills electronically

Dad was also an early subscriber to automatic payment. Every bill that could be paid through automatic withdrawal is paid from his checking account. This was a blessing in his time of grief: the money was deposited automatically, the bills paid automatically, and he could keep an eye on his checking account from time to time through the bank’s telephone banking system. Although one doesn’t want to make a habit of this, it was good there was one less thing Dad had to worry about during the first months without Mom. Dad is again taking care of his financial housework, which includes balancing the checkbook and tracking investments.

Get an advisor you trust

Dad’s financial advisor has been a family friend for years. Happily, she is also really good at what she does. With a lot of common sense, and a good feel for what amount of risk her client is willing to take, Dad’s advisor was able help him make the most of the money my mother left. This financial advisor helped reinvest my mother’s retirement portfolio to provide consistent income for my father, a plan that was way beyond what even my father – with his savvy saving and spending habits – could imagine.

Pay more than required

When my mother was sick in the last year of her life, the credit card bills and medical expenses piled up. Dad chipped away at these expenses during his first year alone by paying as much as he could to each creditor over the months. By paying more than the minimum required by the credit card company, he taught me that you can actually make headway on your bill. The next month’s bill has a chunk out of it so the interest is less. It is truly delightful to watch your bill shrink away.

Keep good records

There were also a lot of loose ends to tie up with insurance after Mom’s death. Final claims had to be filed, final bills paid – all that detritus had to be finished. This was not easy, but Dad had kept paperwork on the treatments, unreimbursed expenses and payments made by himself and the insurance companies. When there were questions, he was able to produce documents to provide the information. His tax preparer was able to use the paperwork on unreimbursed expenses on the taxes as well.

Share the hiding spots

Yes, it’s morbid, but when tragedy hits, it’s comforting for your trusted person to know where your will is stored, where the bank accounts are, what debts are outstanding, and where your important financial records live. If you’re a widow or widower, this is especially important. My parents took me on the tour every few years, and since Mom’s death, Dad continues to keep me apprised of where his finances stand. This includes where he keeps his credit cards to where he stores the safety deposit box key.

Update your will and beneficiaries

While you’re at it, make sure your will is updated. Do you have someone to take care of your children? Have you appointed an executor to be your personal representative? Is that still someone you want to represent you? It is also important to make sure the beneficiaries on any accounts are up-to-date. Families grow and change over the years, and your stated beneficiaries may need to change too.

There is so much to be done when tragedy hits. Unfortunately finances are one of those things that need to be monitored whatever happens. It makes a tragedy a bit easier to bear if one’s finances are set up well.

2 thoughts on “How to Maintain Your Finances in Difficult Times

  1. I’m sorry to hear about your loss.

    On the harsh practicalities of dealing with death the advice you give is spot on. Indeed this advice would serve anyone well in any personal or financial storm. It is especially timely advice given the current problems we are now facing in the world economy.

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