Taz Bright helms this series. Taz is a father, speaker, long-time business owner and graduate of the school of hard-knocks. Taz uses his past business and personal finance experience to help steer others in a positive financial direction while, hopefully, avoiding the mistakes he’s made along the way. As a former 6-year victim of Identity Theft, Taz shares unique lessons learned while trying to regain his financial footing. Taz is a member of Toastmasters International, a martial artist, former bodyguard and a CrossFit athlete. As the owner of Bright Balance Ministries, Taz’s goal is to help as many people as possible reach long-term, solid financial stability.
We generally don’t want to talk about it. We’d rather not speak about it and just concentrate on the warm and fuzzy, happy, pleasant topics. But, if we are to be wise and mature people, at some point we have to address the fact that death will come knocking at our door. We don’t get to negotiate that point. We can’t tell death, “Hey I haven’t created the best financial situation for my spouse. Could you come back in about three years?” No, death shows up without warning and without the intention of giving you an extension. He has zero negotiating skills and has no desire to develop them.
So how are we to live in preparation for this inevitable event? Well, Frugally, of course.
As we move forward in time it is essential that we prepare for the loss of the one we’ve chosen to spend our lives with. Money in savings, investments made, income from odd jobs, etc. are examples of assets that can be designated for funeral costs, eliminating debt, paying ahead on bills like rent, car payments etc. We may also want to consider staying ahead on life insurance policies if the decision has been made to invest in them.
As stated in past Savvy posts, the frugal lifestyle has many benefits and we all choose to be frugal for different reasons. Saving for higher education, paying cash for a vehicle, creating an emergency fund and memory-building family vacations are all examples of worthy goals which can be achieved by frugal habits. But, these goals, while worthy in and of themselves, must be seen in the light of preparing for that sad day in everyone’s future.
I know several couples in which only one spouse is fully familiar with the financial situation they share. Hubby may earn the money, decide how much to save/invest and also know exactly where his 401(k) stands. They live with the mindset that the husband is ‘taking care of’ the family. True, he’s providing and creating a nest egg. That cannot be disputed. But the goal is to provide the best care for the family, not just what’s ‘good enough.’ The best financial situation is one in which the following are true:
- Both husband and wife are completely aware of the total financial picture
- Both know important passwords
- Both know where the Will is kept and the details within it
- Husband and wife are on the same page as far as financial goals, giving to charity, etc.
- Both know the details of any life insurance policies and what to do if the other passes first
This is by no means a complete list. The details to be considered in the event of a spouse’s death are far too many to list. Because there are so many details spouses need to start now with the conversation and planning needed to set things in place. Too often a widow or widower are left with not only grief to navigate but also left to make financial decisions during the most heart-wrenching time of their life. Is that fair? Not in the least. I firmly believe it is an act of love to be sure your spouse is financially set for your departure.
A spouse who’s left in the dark concerning family finances is very handicapped once they’ve been left alone to deal with a financial situation they’ve not been an active part of over the years. They’re left with questions which could be costly. If a widower is unaware of how his wife’s life insurance policy works he may be ignorant of how much of a payout he’s to receive if his wife dies in the hospital under the care of medical staff vice if she died in her sleep at home. One cause of death may pay out $45,000 while another may have a benefit if $95,000. That’s a major difference to all of us but more so to the grieving. With the continual rise of funeral costs every penny is important. While we are still here we need to …
- Decide, with our spouses, where the extra saved pennies will go
- Sit and discuss the details of life insurance policies including benefit amounts and how the funds are to be used
- Decide on cremation vs traditional funeral
- Purchase burial plots
- Determine which possessions may be sold based on who passes first
- Create a Will, Living Will and Health Care Directive
- Discuss which law firm (s) are to be consulted if necessary
- Decide who will raise the children if both husband and wife pass away at the same time
- Decide who will be the best person to help the widow or widower in raising children without their spouse
With details like these lined up years in advance the spouse left behind is not handicapped but, instead, empowered to continue on living and living comfortably.
It seems to me that Frugal Living must have a purpose to it, a worthy end goal. We choose a frugal lifestyle so we can bless others or maybe because we want to build our dream home without financing. We may decide frugality is the best way to fund higher education or pay for that third daughter’s wedding. When death parts loved ones should be added to the list of many reasons for a frugal life. Empower your spouse, have the conversation and start making preparations now!