A Woman’s Guide to Managing Money

WIDOWED: Paige Smith

If there’s any life stage where money and emotions get dangerously intertwined, it’s widowhood. Right after losing your spouse, when you’re coping with enormous emotional struggles, you’re expected to step up and handle daunting financial challenges. It’s a brutal one-two punch.

Atlanta’s Paige Smith can relate. When her husband Randy passed at age 38 after an auto accident in 2004, she found it hard to cope. “I went through shock, disbelief, anger, sadness, everything,” says the 40-year-old mother of two boys. “Only now, over two years later, am I getting to the point where I can breathe again.”

Smith was immediately thrown into the world of handling finances——especially challenging since Randy, a customer service manager, paid all the bills. “I didn’t know what needed to be paid, or when it needed to be paid. He had personal accounts too, and I had to know what was going on with those. To this day I’m still figuring out finances.”

Her journey was made a bit easier by both Randy’s life insurance policy, and a worker’s compensation settlement, since he was traveling on business at the time of his auto accident. Together, those have enabled Paige to stay at home to raise her two boys, instead of having to toil at a 9-to-5 job at the same time.

It’s not easy to manage lump sums like that when you’re in a shaky psychological state. The central rule of thumb is to not do anything in haste, or blindly hand everything over to a financial planner you don’t already know and trust. Beware, also, of a strange but common reaction to insurance money. “Since you got it by way of your husband’s death, there might be negative connotations to it,” says Wall. “So you might subconsciously try to get rid of it, by investing poorly or shopping in excess.” Instead, use it wisely by covering any funeral costs, eliminating outstanding debts you held as a couple, and putting the rest aside for a while until you’re emotionally ready to handle it.

Have wills in place, updated once a year if necessary, and with multiple copies made. “That way, if anything happens you’ll have everything you need right away, which will eliminate a lot of the stress and burden of a very difficult time,” says Freeman.

You should also have all that paperwork in order as soon as you get married. Consider setting up a living trust if you don’t own your house in what’s called ‘joint tenancy,’ or if you have significant assets outside of retirement accounts (which will likely automatically go to you as beneficiary). The alternative of going through the usual probate process could sap away a big chunk of your assets.

Smith’s husband didn’t have a will in place, which initially complicated life since she had to go through the probate process. Now she’s creating a program, called PS Outreach, for women like herself. “I want to help other widows get to the ‘new normal,’” says Smith. “You just have to take it one day at a time.”

Action Plan

— Have your paperwork in order. Lack of a proper (and updated) will from your partner could leave you struggling in a difficult emotional time.

— Use life insurance wisely. If a spouse’s passing leaves you with tax-free insurance money, use it to cover funeral costs and any outstanding debts, and——after a long period of reflection——save or invest the remainder depending on your age and risk tolerance.

— Think about living trusts. If your assets as a couple are in trust, it could spare you the headache of going through the sometimes lengthy and costly probate process..

Helpful Resources

— Widows Wear Stilettos (New Horizon Press; $14.95): Carole Brody Fleet’s book (and Website of the same name) offers help and support for young widows.

— www.wiserwomen.org: The site of Women’s Institute for a Secure Retirement helps women take financial control over their lives, with a particular focus on navigating the challenging golden years.

— www.wife.org: The site of the Women’s Institute for Financial Education, the oldest nonprofit devoted to women’s financial independence.

This story originally appeared in the February 2009 issue of Black Enterprise magazine.