Have you recently lost someone close to you? Are you in the midst of a difficult divorce? Have you recently been laid off or contemplating a career change? Are you experiencing life-altering health challenges?
If you answered yes to any of these questions, you are a woman experiencing a major life transition. It is important to realize that as a woman facing a new life challenge, you now have very special financial needs and you are certainly not alone.
Living through a major life transition creates very strong emotions. Whether these emotions are positive or negative, there is nothing more dangerous to oneâ€™s financial well-being than making major money decisions when emotions are running high. However, you will likely need triage strategies for handling necessary financial decisions during your major transition. Although your circumstances are unique to you, women in transition face similar challenges.
Most women I meet going through transition tell me that feel like they are in limbo; like they are stuck in a thick fog and canâ€™t see or think clearly. If you feel this way, you are not alone. Most people get stuck in limbo as a basic coping function to protect themselves from stress and negative emotions.
But this state of limbo can also be dangerous when the fog gives us permission to make bad choices with our money, or avoid handling the important stuff like paying bills. Whether bills go unpaid, or you start spending impulsively, you can find yourself looking back with an incredible amount of regret. Weâ€™ve met women who have completely depleted their IRAâ€™s to travel the world with their best girlfriend to help cope with the loss of their husband. We have also met women who had not paid their utility bill or mortgage for months and found themselves facing serious credit consequences. Meanwhile, you may also be in a vortex of swirling, conflicting advice from well-meaning friends and family.
Over the many years that our firm has attracted women in transition, we have found that there are 5 critical keys to maintaining your well-being throughout the transition:
- Give yourself time. Donâ€™t sell your home. Donâ€™t re-allocate all of your retirement savings. Donâ€™t invest your life insurance benefits. Give yourself at least 6 months to a year to work through your state of limbo before you make any substantial financial decisions. Remember, there is nothing more dangerous to your financial well-being than making big money decisions while emotions are running high. You should seek professional advice on what decisions you can defer and what decisions you cannot defer.
- Ask for help. Although I recommend you delay large financial decisions, there are every day decisions that have to be made whether you feel up to it or not. Paying your bills is the biggest. If you are struggling to keep up with your daily financial responsibilities, ask for help. Consider asking a close friend or family member to step in and take over this function for you for a while. Or if you are not comfortable with that, consider hiring a bookkeeper or accountant to handle it for you. Of course this might incur some cost, but it will be well worth it if it means protecting your credit and keeping your current with your monthly financial obligations.
- Buy yourself financial safety. Keep your money as liquid as possible, especially if you are experiencing a transition as a result of death of a spouse, divorce, or significant windfall (sale of a business, loss of a parent, etc.). Liquid assets, such as cash and short-term investments, give you the safety net you need in an emotional time of transition. After 6 months or a year, your needs will change. You will want to preserve as many options for you as possible, and staying liquid and â€śsafeâ€ť does just that.
- Try to stay healthy. You will make better choices if you eat right, sleep enough, rest or meditate, and make time for exercise every day. The only person you need to focus on at this point is you. Whether you have children or others that depend on your care, you can only be your best for them if you take care of you first and foremost.
- Protect yourself. There are many devious business people in our world that look for an opportunity to take advantage of people in transitions; especially women. Many of the women I work with have unintentionally vented their emotional vulnerability during their transition, often through outlets like social media. Be very careful of the people offering help and always have a trusted friend, family member, or advisor as a sounding board before you choose to engage anyone or any business to help you.
Hopefully your transition is one that is the result of something great happening in your life, like having your first baby, or selling your business. Unfortunately the women we are introduced to usually are experiencing a very painful event in life. Regardless of whether your big life transition is positive or negative, these are the 5 most important things to consider when it comes to your financial well-being. I wish you peace and prosperity and I know with confidence, that one day your fog will lift, and you will have the courage to take that necessary step forward in the next great stage of your life.
Author, Principal, Money & Relationship Advisor
Gebhardt Group, Inc.
Important Disclosures: CA Insurance License #0D99998. Matthew Grishman is an Investment Advisor Representative of Gebhardt Group, Inc., a Registered Investment Advisor, and 401k Masters, LLC, a Registered Investment Advisor. Gebhardt Group, Inc. and 401k Masters, LLC are affiliated companies.
The opinions in this piece are for informational purposes only and are not intended to provide specific advice or investment recommendations. To determine which investment(s) may be appropriate for you, consult a financial advisor prior to investing. Market performance is historical and there is no guarantee of future returns.
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