Confessions Of A Regretful Widow

Windfalls are complicated. People often feel isolated after receiving a financial windfall whether after a death, divorce or sale because of emotional attachment. They are scared. They are uncertain about what to do. No one feels sorry for windfall recipients or even understands their burden. They have few places to turn.

This article is for people who’ve received a lump sum of money that they define as significant in amount or in meaning. I’ve designed it to gently nudge you away from destructive behaviour and towards healthy, productive behaviour through the use of this confessional, personal, raw email. I answer the email and subsequent responses so that you will see the relevance in the financial lessons because it addresses a concern that might be similar to yours.

You will feel comforted that you are not alone in your seemingly insurmountable struggle and as a result you will gradually gather motivation to learn and make confident decisions in managing your windfall.

Email subject line: Confessions of a regretful celebrator:

It pains me to admit this, but think I sort of celebrated the fact that I finally had control of my life after my brilliant, fabulous, loving, successful entrepreneur of a husband died suddenly. Maybe it was one of the many unhealthy ways I grieved his death and attempted to accept that he was gone, but what started with a few purchases blossomed into a lot of purchases.

I had always resented that I couldn’t buy the car I wanted. It’s a dumb and materialistic thing, I know, but I resented that my vehicle was a “family” decision. I’m sure my friends and family thought poorly of me, but within the first few months of my husband’s death, I traded in the kid- and dog-friendly SUV with the good resale value and excellent safety rating for a spectacular and slightly impractical car that I’d been admiring and coveting.

I suppose this was the first example of one of those dopamine-faking actions that hooks people into addictions because, as I look back over the past four years, the trend is obvious and rather terrifying.

I won’t give you details of all the upgrades and “investments” in my home I have made but I’ll just say they were substantial. Also, not one single purchase produced any sort of lasting feelings of safety, self-sufficiency, happiness or whatever else I was seeking.

Please share with your other clients my advice that if there is part of them that is bashfully and even shamefully excited about having control over their money and financial decisions following the death of their husband or wife, implore them to think very hard about why they are spending their money and what they hope to gain from the purchase.

I have wasted a lot of money, energy and time that could have been devoted to real healing and rebuilding my life as a widow. And now I feel guilty and ashamed that I’ve blown through a lot of money and I’m scared that I have jeopardized my future.

Email reply subject line: X Marks the spot: “You are Here” on your map

Please don’t be so hard on yourself. The advice you provide to other windfall recipients at the end of your letter is excellent and you’ve obviously done a lot of self-reflection in order to reach a point to be able to write this email.

My advice to you is to picture yourself looking at a map that says: You Are Here. It really doesn’t matter how you got to this point; all that matters is that you have arrived at this X Marks the spot ‘You Are Here’ sign and you have an opportunity to navigate purposefully from here now.

Before you can choose what direction to go on the map, I think we would be wise to figure out exactly where you are though. Specifically, let’s address, head-on, what you’re worried about, which is whether you’ve jeopardized your future. We’re going to figure out how much you can spend every month without guilt of overindulgence and without fear of running out of money.

The way we’re going to do this is by taking stock of your income sources in terms of how much and when (very important and easy to forget this second ‘timing’ part) money flows to you from which sources and how likely it is that the income will continue.

The flip side of this is that we’re going to take a look at where your money is going and whether you have fairly steady monthly expenses or if your expenses jump around a lot month to month (we call this smooth versus lumpy cash flow in the business).

The benefit to you of looking at how your cash flows in and out is that you’ll become more comfortable and confident in your new solo situation. You’ll know what you can afford to spend every month and every year, you’ll know if and when you should be frugal or can be extravagant.

You’ll be able to move on with your life without worrying about whether or not you can pay your credit card in full or whether you’re blowing through your investments so quickly that you’re going to run out of money.

Once you think about this as simply taking control of your cash flow, you will not feel like it is an oppressive budgeting punishment, but rather an exercise that allows you to understand what you can and cannot do (or should and should not do).

I can almost hear you groaning and recoiling with dread! It won’t be that bad, I promise.

Email subject line: Never been such a procrastinator as these days…

Would you believe me when I say that my intentions were good? I really did intend to get right on this exercise, but the days and weeks have gone by with me finding all sorts of reasons to bury my head in the sand and not do what I know is important.

You see, I never had to worry about these things before and even thinking about budgeting reminds me that my husband is gone and I almost resent having to do this now. And when I’m not feeling resentful, I’m feeling guilty for having this money all to myself.

I do really want to take you up on your offer to help me through this exercise of knowing where my money is coming from, when I can expect it to arrive in my bank account and also where my money is going. I see the benefits.

Maybe I just need you to walk me through smaller steps. Maybe if I just have one task at a time, I’ll actually get something done.

What I can tell you right now is that I paid off the mortgage with some of the insurance money, so I do not have mortgage payments. I put the rest of the insurance money in my bank account and I hate to admit it, but there isn’t much left because I’ve just been paying my bills out of that account for the last four years. I probably should have invested that money, but I simply did not want to think about it.

I haven’t done a great job of getting a handle on my spending. I keep forgetting – sounds ridiculous, but I’m in the habit of buying what I want. I do want to stop this bad habit though and I’m ready, so I’m very thankful for your help.

Email reply subject line: Let the procrastination end!

I think that’s a great idea - I’ll break down this big job into smaller tasks and hopefully make everything less daunting. Let’s start with getting a really good sense of where your money is coming from.

The first thing I’d like you to do as you’re on your computer reading this email, is to log on to your bank website and scroll through the last year of transactions.

Please open a new spreadsheet (or use a good old-fashioned piece of paper) and put the months of the year along the top. Then under each month put the total amount of deposits for that month that went into your account. Please don’t worry about where the deposit came from at this point, let’s just focus on the total amount of all deposits for each month.

Remember, we’re just looking for deposits into your account, not the account ‘balance’ or amount of money in the account. These deposits could include annuity payments, government and work pension payments, and paycheques, for example.

We’re focusing on what’s called ‘cash flow’ and this is important for you, very practically, because you want to see if you can match what’s coming in to what’s going out. And if there’s a mismatch, we’ll figure out how to increase the money flowing in and/or decrease the money flowing out.

By covering an entire year and only looking at the totals, not the details of where the money is coming from, you’re getting a sense of your total annual income.

If I know you well enough, and I do, you’re going to start to think about how much of this income isn’t really yours because it came from your husband’s work pension and so forth. Please just allow those thoughts to come and go, but permit yourself to very simply and objectively, almost cold-heartedly, consider the total amount of income flowing into your bank account. I know it’s hard, but you’re ready.

This is your starting place for figuring out if this is enough for you to live on or if you need to use your investments to supplement that income.

How’s this for step one? Is this something you can tackle, I hope?

 Email subject line: Not as bad as I’d expected…

Well, I didn’t like it, but I did it! I cursed you as I sat at my computer, I don’t mind telling you, and even wished I’d never admitted to you that I needed help with this stuff. But now that I’m done, I’m glad you forced me into this exercise.

I hate to ask, but what’s next?

Email reply subject line: Not the budget police!

You did it! Step one complete. Well done. You now have a record of how much money you received each month for the last year. And from what you’ve provided me I can see that this is all income that is certain to continue (as opposed to rental income or dividends that would have some uncertainty), so we can assume that this income is your ongoing ‘paycheque’.

Now it gets quite a bit less enjoyable, I’ll forewarn you. But it’ll be worth the effort, I promise you.

Please log back into your bank account. I’d like you find the total monthly withdrawals from your bank account over the last year. Open your spreadsheet or pull out your piece of paper where you recorded your monthly income and add a new line right underneath called: expenses. For each month you’re going to record the total withdrawals from your bank account – not the details, not the individual expenses, just the totals.

Now log on to your credit card website and do the same thing: record the monthly total amount charged to your card. Don’t even look at the individual charges at this stage. We just want the monthly totals of how much you charged to your credit card.

I expect you just experienced a jolt to your stomach, remembering the ‘discussions’ with your husband about household and personal expenses. Like the thoughts and feelings you had when you recorded your income sources, just let them come and go, but objectively and even cold-heartedly carry on and simply record what you spent. Do not allow yourself to judge whether you should have spent that money or whether you think you’ll spend that much ever again, just robotically record the expense.

That’s it for step two. It’s harder, I know, because you probably won’t be able to turn off the self-criticism, judgement and memories of those ‘discussions’ with your husband around money and your regrets around spending decisions since he died. But remember your ‘You are Here’ mark on your map. Take a deep breath and just give it a try – you can do it.

Email subject line: Worse than I’d expected…

Well, that was horrible. After several false starts, I reluctantly attach what I’ve recorded as my expenses for the last year. I am not having fun.

Am I done yet?

Email reply subject line: Not the budget police!

Nice job. I know it’s horrible, but you’re doing great and making wonderful progress.

Looking at your spreadsheet of monthly total income and monthly total expenses for the last year, I can see that we’ve got some ‘cash flow timing’ issues to solve. There are months of the year in which you have big lump sum expenses resulting in larger monthly outflow than your inflow.

This is easier to fix than you are probably thinking right now. What we’re going to do is see if we can ‘smooth out your lumpiness’– believe it or not, this is semi-technical personal finance lingo, as odd as it sounds. All it means is we’re going to do what we can to make your expenses more consistent each month rather than all over the map so your monthly expenses better match your monthly income.

But overall, your spending is in line with your income, so you have not jeopardized your future. This news will hopefully give you a sense of comfort, at least on the topic of cash flow.

I’m afraid the next step is going to probably be pretty awful. I’m not going to sugar coat it and pretend it’s fun or tell you everyone else finds it enjoyable and easy – most don’t. But it’s essential.

I now need you to dig into your expenses in a bit more detail than the monthly totals. This is only way we’ll be able to figure out what expenses we can ‘smooth’ out.

Start with the automatic withdrawals that come out of your bank account. On your spreadsheet, add a column on the far left and state the date on which these automatic payments are withdrawn. Then add the monthly automatic withdrawal amounts.

Does your car insurance come directly out of your account, for example, and do you spread these premiums out monthly in equal amounts or pay annually?

What about your home utilities bills – are these expenses smoothed out so they’re the same every month with one catch-up month or are they lumpy depending on your monthly usage?

What month do you pay your home insurance premium? What about your income and property taxes – when did you pay and how much?

Are you in the habit of taking cash out of this account for spending money and if so, (without judging yourself or feeling self-conscious about this exercise – I’m not the budget police) list all the cash withdrawals for the year – the amount and the date. How consistent are these amounts throughout the year?

Still with me?

That’s all for now. You won’t enjoy this process, but you’ll enjoy the feeling once we’re done this whole exercise of not needing to worry about whether there’s enough money in your account when your home insurance premium is deducted or you have to pay your income tax.

Email subject line: Starting to see the benefits of this exercise…

OK that wasn’t so bad. Turns out I don’t have a lot of expenses taken directly out of my bank account, so it wasn’t too horrible to list the annual and monthly automatic withdrawals.

I do wish I’d known about the lumpy and smooth terminology while my entrepreneur husband was still alive. All these memories of ‘discussions’ as you rightly called them in quotes around how much money I could expect him to be able to deposit in our bank account for the month came surging back to mind. Our income was never smooth because of his business, but I never had the courage or felt I had the understanding to have a conversation about smoothing out our expenses to reduce my stress of household management. Better late than never, I guess.

My car insurance happened to have been due last month in the midst of this exercise, so I asked about spreading the cost out over the year rather than making one lump sum payment. They charge a bit for that privilege, but I went for it – I’d rather spread that cost out over the year, I think. I’ll try it anyway.

And I might call the utilities companies and ask for details on what you mentioned about making those payments equal throughout the year rather than ‘lumpy’ (nice to be learning the lingo). Then again, I might never get around to doing that. You know what though? Boy does it feel good, as small and inconsequential as it is, to be making this decision to call or not call, to change or not change, purposefully rather that out of fear or procrastination. As tedious as all of this homework has been, I’m thankful for this outcome.

Are we there yet?

Email reply subject line: Remember - not the budget police!

I’m so impressed with your progress. You’re more organized and on top of things than you realize. Really good work.

OK. Another warning: this stage might be rock bottom in terms of tediousness and potential for procrastination. However, since you mentioned that you have very few expenses that are automatically debited from your bank account, that tells me that you have many expenses that are charged to your credit card. I do this too and find it the best way to track my spending.

You’ve already recorded the total monthly credit card amounts due for each month over the past year. Well, your next piece of homework is to roll up your sleeves and get into the details of your monthly charges.

The process I recommend is the same whether you download digital statements, spread paper statements out over your dining room table, or convert your monthly statements to spreadsheet format (this makes for easy sorting, but don’t worry at all if you don’t feel like getting so technical).

Because this exercise is unpleasant for just about everyone (I happen to love it, but you know I’m not normal), I am going to break the effort up into two phases.

The only thing I’d like you to do right now is to please record all of the regular automatic monthly charges to your credit card – things like gym memberships and subscriptions that are exactly the same every month. For now, please list each item separately on your spreadsheet with the monthly amount. Later, you can cluster all the subscriptions together as a category for example, but at this stage we’re going for detail.

That’s it. Do not let your eyes wander to the other charges that change every month like food and clothes and travel. Just keep laser focused on those expenses that you’ve committed to pay on your credit card every month and are automatically charged.

Again, let me emphasize, you are not to judge your decision-making. You are to record factually what is currently being charged to your credit card.

Good luck – take a deep breath and go for it – you can do it.

Email subject line: Not too horrible…but I’m scared of what’s next

Well, you were right, this task definitely brought out my worst tendencies towards procrastination for all things budget-related. I sure did appreciate only having to look at the regular monthly charges on my card – thank you for that luxury.

I can admit that I found a few surprises. Nothing terribly expensive, but I’d forgotten about a couple commitments I’d made and have been paying for monthly. I’ve already called to cancel one subscription. I know you told me not to judge my spending mistakes, but it’s hard not to. I’m trying to take your advice and move on from here without being too mad at myself.

I am already guessing what you’re going to have me do for Phase Two of this credit card expense exercise and I am already feeling anxious and resistant. Am I right in expecting that next I have to comb through all my credit card expenses and be reminded of what I’m spending in restaurants and at stores? Isn’t there another way to do this? Please say yes. 

Email reply subject line: Truly, not the budget police.

I do not have good news for you. Yes, Phase Two is to comb through your credit card charges to get a sense of how much you spend on life. And no, there’s no easier or better way to do this than to go through everything by hand.

It will be easier, however, if you launch into this exercise with the attitude that you’re doing it for someone else, not you. And it’ll be much easier with the attitude of doing it for the purpose of making sure ‘they’ are spending enough on things that matter to them.

Remember, this is not an exercise in putting yourself on a restrictive budget, but rather it is an exercise in objectively, factually, cold-heartedly recording where and when you’re already and currently spending your money. This is how you’ll know how much income you need and when you need to receive it. And this is how you’ll gain the comfort and security of knowing you’re living within your means.

Here’s how I recommend you tackle Phase Two:

Day 1: comb through the monthly charges for the last year and record the amounts you spent on restaurants. Just put the monthly amount you spent in restaurants lumped as one expense.

Day 2: record the amounts you spent over the past year on food from grocery stores and lump it together as a monthly expense. Never mind if you know you buy things at the grocery store that aren’t strictly food – you can call this line item Food and Household if you want to remind yourself that you buy more than just food at the grocery store. I do this.

Day 3 and onward: continue to choose a theme of expenses and just limit yourself to recording that monthly expense for the year on your spreadsheet. Lump the expenses together in ways that are meaningful to you.

Take as many days as you need to get through this exercise and then take a few days at the end to make sure you haven’t missed a whole category like dental expenses that probably aren’t monthly and might be easy to miss.

Remember, you’re doing this for you, not me – you’ll find the results satisfying even though the process will very likely be tedious and time consuming. You will appreciate that I’m making you do this, you will.

Email subject line: I need a vacation after that exercise…

OK. Done. I suppose it wasn’t as bad as I’d expected, but it wasn’t my idea of how to best spend my time.

Email reply subject line: We’re pretty much done!

Thanks to all of your diligent work, you now have your own cash flow timing schedule. You know what months to expect big payments like your home insurance and property tax, so you know to avoid other big expenses in those months if you can avoid it. And if you can’t avoid it, or don’t want to avoid it, you know that you just need to save up enough in the months prior to make sure you have cash on hand to pay those lump sum bills.

You mentioned you’ve started ‘smoothing’ out some of your expenses like your car insurance – keep doing that. Knowing you, I think you’ll find your personal finances more manageable if you can think of almost everything in terms of monthly expenses rather than try to keep track of when annual payments are due and how much you need to have on hand.

This next and final step is a personal one and please know that I’m not asking you to share the answers with me. It’s also best if this step is a slow and ongoing process that you simply keep in the back of your mind as you evaluate purposefully where you are spending your money.

Are there expenses that you have noticed throughout this exercise that you have continued because you and your husband enjoyed that thing together and you haven’t been able to cancel?

Are there expenses that are related to what your husband valued, but that you don’t really value?

Are there new expenses that you have taken on since your husband died that were maybe in the category of what you described as unhealthy in your letter? Do you really value whatever it is that this expense is related to or, when you’re honest with yourself, is this something that you spent money on in your way of grieving? Just make a note of these expenses and mull this over for a while.

Remember that this is not an exercise to put you on a strict spending diet – we have discovered that your income covers your expenses, so you don’t HAVE to limit your spending. But because this was the main concern you expressed in your email to me about your spending regrets, I would like to push you out of your comfort zone a little and ask you to consciously assess whether your money is being spent in line with your own values as of today, not the past, not anyone else’s values.