If money is my friend like author Phil Laut said in his book, Money Is My Friend, then why does it seem like a foe sometimes? And, if money is my friend, why does it feel so difficult to manage, especially in certain seasons of life? Why is it that 70% of sudden inheritors lose everything they have gained within 3 years, and why do 70% of widows fire their advisors after their spouse dies?
According to an article written by an incredible widowed financial advisor, Dr. Kathleen Rehl, in the Journal of Financial Service Professionals January 2016 issue, one of the fastest growing segments of the US population every year is widows. I was so shocked. Her study also states that approximately one million widows yearly join this club that they never signed up for, and the numbers are increasing as the boomers age. 70% of all married baby boomer wives will experience widowhood. 80% of men die married, and yet 80% of women die single. The average age that a wife becomes a widow is 59.4, which means, on average, that she would probably live at least another 15 years. I was only 50 when I became a widow. Some of us, like myself, had left our previous careers to raise a family and support our husbands in their occupations, so we are left in a precarious position as sudden inheritors without a job. Also, many women become dual inheritors, having income from both deceased spouses as well as parents, which causes additional confusion. Most of us give it away because we don’t like to profit off of loss.
As these women enter this new and mostly unexpected phase, their top desire is to be heard and guided, not just coerced into what the advisors think is right. These women who are inheritors or have lost finances through either divorce or the loss of a spouse need the space to grieve and need the support to make good decisions in light of their own unique values and desires.
Shortly after my husband passed away, I sat down at my gently-used, beautiful white office desk/sewing table, which held the sewing machine my late husband had given to me right after I had my first grandchild. On my desk was a statement which showed a loss of about $20,000 in penalties for an early withdrawal of an annuity. “What is that? What is an annuity?” I had no idea. Meanwhile, I looked at the stock market, which had declined quite a bit, and I called my advisor at the time and said, “I can’t do this”. I was totally distraught and not sure what to do or who to talk to. I have a family of seven children, in addition to 9 grandchildren at that time, now close to 13. Everything had been dependent on me since my husband had passed away 6 months earlier. I was completely overwhelmed.
Neuroscientist Antonio Damasio explains, “It is emotion that allows you to mark things as good, bad or indifferent.” Neurologists have discovered that when emotions and feelings are compromised, you lose the ability to make good decisions. Daniel Kahneman, a Nobel prize winner in economics for his studies in human behavior and decisions, said that 90% of all financial decisions are made emotionally rather than logically. That means pleasing others as well. In his book Yes or No (which I have read over and over again), author Spencer Johnson said that most of us live in accordance with a disillusion or a false assumption, such as the ability to survive solely on social security while maintaining a similar lifestyle, so these incorrect thoughts shape our ability to make truly informed decisions or to plan accordingly.
In grief, loss of identity, or empty nest situations, brain fog is very normal. However, at the time, I did not understand this fact, so I was trying to plan my future and my new life while my decision-making skills were impaired. I was at a loss. I was a counselor, and I ran a non-profit, so I thought that I should not be experiencing these issues. Wrong! Confusion, pressured decision-making, and managing expectations of ourselves and the expectations that others have of us are just a few of the main issues surrounding widows, widowers and divorcees.
When we are in the middle of this chaos and fog, many times we don’t ask the right questions because we don’t know the right questions to ask. Or, even yet, we trust too much in those who mean well and are trying to lead us, instead of learning to lead ourselves. I have many friends who are widows whose husbands have established their wives well financially but have not prepared them emotionally to handle those finances. Coming out of a pretty traditional marriage, my husband had made all the decisions, financial and otherwise, which left me at a deficit of practical knowledge. So does the blame lie with him or with myself for not having the courage to step up and ask?
If we tend to make better decisions when grounded in truth and reality, how did I get to the point where I could clearly see the situation before me? How did I find my way after making so many wrong decisions? How was I able to change, reinvent my life and career, and grow in better financial wisdom and better decisions?
After much trial and error, I have discovered that what I needed was to learn how to manage my money, make good decisions, increase my income, spend wisely, invest automatically and give generously. I had to figure out how to establish my life around new values as a single individual and work through my emotions of grief without letting those emotions negatively affect the choices that shape my future.
Why is this so important for widows and divorcees? Because we need to know how to emotionally handle the technical side of money and our decisions. I currently teach a practical skills workshop at Santiago Community College, in which we explore decision-making skills, successful communication with your financial advisor, and the process of determining your values and what your goals and desires are for your finances. The course also covers how to manage the expectations of others, how to move forward after a major life transition, and how to love and appreciate your new normal and begin to reshape your future. I was able to start a business which has become quite successful, Nifty Package Co, Daily Money Manager and work as a CeFT © at Hagler Financial Services in Old Town Orange.
