The initial twelve months following your husband’s death is what I call the “year of transition”. It is important to realize that your judgment—your ability to make the right decisions—during this emotionally trying time may become impaired.
When a relationship is lost, part of the structure that guides one’s actions goes with it. Until this structure is rebuilt, the mourner and her money are very vulnerable. Long term decisions are regularly made for the wrong reasons, decisions that can seriously impact your future. Often, there is a sense of deprivation, sadness, and disorientation, which makes you particularly vulnerable to the misuse of money.
Grief causes confusion and it can influence your financial decision making ability. This is because your brain is actually functioning differently. You are not going crazy. It is common to experience confusion and memory loss during this time. Scientifically, it’s called cognitive disconnect. This is why it is so important to write everything down. Matters of finance can become especially difficult when you are uncertain or unfamiliar with various decisions coming your way.
During this time there are several pitfalls to avoid: take no drastic action such as selling your house, quitting your job, moving in with or closer to your family, buying insurance, loaning or giving money to a family member/friend, or making any major investments. Watch out for scam artists. Many widows have become prime targets for fraudulent demands for the repayment of loans that do not exist, claims of overdue premium notices for life insurance policies, or being asked to receive merchandise C.O.D. that was never ordered. Unless you knew about the debt or order beforehand, do not pay it. Turn over all unusual bills to your lawyer or other trusted professional advisor.
Try to take financial decision making slowly. As a widow, the supply of your money is a limited resource. Take the time to understand what those resources are, where they are, and what they are doing. Defer major decision making until you feel more confident about acquiring financial information. In six months to a year, you will be better able to consider any necessary financial decisions. During the period of time when you are actively grieving:
- Have money in the bank. You will need readily available cash, not only to support you during this period, but to also enable you to pay debts and funeral expenses.
- Consider putting all death benefits or insurance proceeds into money market accounts, savings, certificates of deposits maturing in less than one year, short-term Treasury bills, or other accessible and relatively safe investments.
Over the next several months you will have time to assess your financial situation more thoroughly.
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