The Credit Professional Winter 2018 Dec_2018_magazine | Page 19

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handle on your ongoing
expenses. If your spouse
handled the bills, you need to
figure out how much you need
each month to cover your costs.
Remember to compute how the
loss of your spouse will affect
income and expenses. For
example, you may need to pay
for vehicle oil changes, house
cleaning, or home maintenance
services your spouse once
performed. Widows and
widowers say it can take 18 to
24 months to discover these
expenses and determine the
best way to handle them.
Creating a budget will help you
balance income and expenses.
Start by recording one month’s
expenses for daily living. Next,
record all the other expenses
that arise over a typical
12-month period—such as
taxes, home repairs, insurance
premiums, or medical
expenses. Divide this total by
12 and add it to your monthly
budget so you know how much
to set aside each month.
Estimate your income for the
year and then determine
whether you earn enough to
cover your expenses or changes
are needed. Many credit unions
offer budget counseling,
classes, and materials to guide
you through this process.
Make a list of everything you
own, including items you
inherited from your parents or
your spouse’s parents or owned
jointly with others. If your
spouse owned all or part of a
business, check the ownership
of equipment, buildings, and
other assets.
You may need to claim
ownership of some assets
by filing for a change of
ownership or title. Items to
consider include:
Bank accounts
Safe deposit boxes
Stocks
Bonds
Retirement accounts
Vehicles
Real estate, including
your home
Remember, ownership often
carries an expense in the form
of storage fees, registrations,
insurance, loan payments, or
taxes. Determine if you should
continue to pay the expense or
sell the asset.
Is your financial status
a lot worse than
you thought?
If your spouse managed the
money, you may be unaware of
what you owe and what you
own. In other cases, you may
be unaware of provisions
Do you know what
related to insurance, pensions,
you own?
or other assets. For example,
some widows and widowers
If your spouse has a will,
have been stunned to learn that
learn what it says about how
the pension they relied on for
property is to be distributed.
ongoing income ended or was
If there is no will, assets will be severely reduced when their
distributed according to state
spouse died.
“intestacy” laws.
When your financial outlook is
firm, you may not be able to
afford to follow the rule of
thumb of waiting for a year
before making changes in your
living situation. Instead,
promptly begin looking at your
options and how you can adjust
your expenses to match your
income. Consulting a financial
counselor can be invaluable as
you explore your options.
In general, move quickly to end
ongoing expenses that have
minimal impact on your life.
For example, if your spouse
belonged to a fitness club
and you don’t use it, cancel
it immediately.
Begin considering your options
for housing and transportation;
these items account for as
much as half of your household
budget. You may be able to
continue to live in your house,
but only if you give up traveling
or other activities. On the other
hand, moving to an apartment
or a smaller house may reduce
costs and free up disposable
income. Aim to match
your value to your
financial decisions.
Do you have a credit rating
in your own name?
You already have a credit
rating if you established and
maintained good credit in your
own name, including loans and
credit cards.
But if you relied on your spouse
for access to credit, you may
lack a credit rating. That means
it’s important to handle credit
cards carefully. If you have a
joint account, laws prohibit
credit card issuers from
automatically closing an
account or altering an ac-
count’s terms due to the death
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The Credit Professional
18
December 2018