Creating a Budget After the Loss of a Spouse: Financial Tips for Widows and Widowers
Losing a spouse is devastating emotionally and financially. Navigating this type of loss can feel complex and overwhelming. As you work through grief, the reality of managing finances entirely on your own sets in, and you must scale this new financial mountain without the help of your spouse. Whether you’re newly widowed or have been managing solo for a while, building a budget can bring stability during times of uncertainty.
What Are the First Steps You Should Take After Becoming Widowed?
In the first few weeks, focus on key legal and financial actions to settle your spouse’s estate. These early steps provide solid groundwork for your broader financial planning efforts, help you regain control, and avoid missed deadlines or financial pitfalls.
Key actions include:
- Notify Social Security and pension providers.
- Contact your spouse’s employer for any final pay, benefits, or retirement benefit accounts.
- Change beneficiaries and update your estate plan documents.
- Apply for any qualified survivor benefits or government assistance.
Afterward, consult with your financial planner or advisor to help you understand and manage any changes to your accounts and subscriptions. This step ensures that you have a smoother transition during this challenging time.
How Do You Start Budgeting After the Loss of Your Spouse?
Creating a new budget begins with understanding your current financial picture. Don’t rush the process—give yourself time but know that clarity brings confidence.
Gather the following:
- Your spouse’s death certificate (needed for account changes).
- Bank and investment statements.
- Credit card bills.
- Monthly utility and mortgage or rent statements.
Use this information and create a monthly budget. Prioritize essential expenses such as housing, utilities, groceries, and health care. This foundational step is vital to helping build long-term financial security.
How Can You Track Your Income and Expenses Effectively?
Once you’ve addressed immediate tasks and assessed your current financial situation, shift your focus to tracking money in and out. Accurate tracking provides you with insight into your financial habits and helps with budgeting for widows and widowers.
Use these tools to stay organized:
- Budgeting apps—such as Copilot Money, Nerd Wallet, YNAB (You Need a Budget)—for your digital mindset.
- Spreadsheets for a more manual, customized approach.
- Paper planners for a hands-on method.
Keep in mind that your income may change upon your spouse’s death. Log all income sources—this could include Social Security benefits, pension income, life insurance payouts, part-time work, or investments. Match these against fixed and variable expenses each month.
What Expenses Can Change After Losing a Spouse?
After your spouse passes, several household expenses may decrease—but others might increase. Understanding this shift is crucial for financial planning for widowers and widows.
Common changes include:
- Housing costs: May decrease if you downsize or increase if you refinance.
- Food and utilities: Likely lower with one less person at home.
- Health insurance: May increase if you lose coverage under your deceased spouse’s plan.
- Transportation: Might drop if you need one vehicle instead of two.
- Taxes: Your filing status will change, affecting your tax bracket.
Keep an eye on discretionary spending, especially as emotional purchases can creep in during a time of grief. Identify non-essential spending and reduce or eliminate the culprits. Financial advisors can guide you through the shift in expenses, helping you account for all household costs.
How Do You Manage Joint Accounts and Debts After Your Spouse Passes?
Joint accounts and debts need prompt attention to prevent financial surprises. Contact each institution to notify them of your spouse’s passing and learn about account procedures.
Focus on:
- Removing your spouse’s name from joint accounts.
- Closing unused or unnecessary credit cards.
- Reviewing any outstanding debts—certain companies may forgive or reassign debts.
- Checking for automatic payments that may no longer be necessary.
Managing debt is a key part of ensuring financial security for the surviving spouse. If your spouse had private debt, such as personal loans, consult a financial or legal advisor to determine your responsibility. You might also need to restructure certain debts to fit into your new financial reality.
What Should You Know About Your Spouse’s Life Insurance Policy?
Life insurance can provide a critical financial cushion, designed to provide peace of mind with financial security for the surviving spouse. Contact the life insurance company soon after receiving the death certificate to begin the claims process.
Know the following:
- The policy’s payout amount and how it’s distributed.
- Tax implications (most life insurance proceeds are tax-free).
- How the funds can support your short- and long-term goals.
Avoid making large financial decisions immediately after receiving a payout. Instead, speak with a financial advisor and consider placing the funds in a high-yield savings account while you build your budget and plan for your future.
Losing a Spouse Guidebook
Losing a spouse isn’t just an emotional upheaval; it can also lead to significant financial changes. Our guidebook is tailored to address common challenges and offer valuable insights.
How Can You Adjust Your Budget to Plan for Future Expenses?
Once your immediate finances are under control, think ahead and set realistic financial goals. Preparing financial plans helps you stay resilient and supports your long-term financial security.
Plan for:
- Retirement needs and savings goals.
- Emergency fund (about three to six months of expenses).
- Future health care costs or long-term care.
- Travel or lifestyle goals.
- Legacy or charitable giving.
Revisit your budget quarterly to ensure it aligns with your evolving needs and meet with your financial advisor to reassess your retirement goals. Consider readjusting your financial goals as life changes.
How Can You Ensure Financial Security for Your Children After the Loss of a Spouse?
If you have children, their well-being—both emotional and financial—becomes your top priority after losing a spouse. Planning ahead can help ensure they remain secure, even as life changes.
Ways to protect your children’s financial future:
- Children under 18 (or 19 if still in high school) may be eligible for Social Security survivor benefits.
- Ensure guardianship, asset distribution, and care plans by establishing or updating a will.
- Set up a trust or custodial account to let you manage assets on behalf of your children.
- Make sure insurance policies, retirement accounts, and financial documents reflect your current wishes.
- Purchase life insurance (if you haven’t) to ensure financial support for your children if you’re no longer around.
Losing a spouse alters every part of life—including your finances. With these financial tips for widowers and widows, you can regain control and protect your future. Budgeting won’t fix your grief, but it can offer a sense of security and independence when you need it most.
Let our team members at Savant Wealth Management help ease the financial stress thrown upon you during your time of grief. Our advisors, tax professionals, and estate planning specialists understand how life-changing losing a loved one is. Together, we can create a budget that designed to help you maintain financial stability, allowing you to focus on healing and moving forward.
This is intended for informational purposes only. You should not assume that any discussion or information contained in this document serves as the receipt of, or as a substitute for, personalized investment advice from Savant.