A Widow’s Guide: Having run a financial planning business for over 25 years, I've helped many widows become financially well-organised. As a result of this, I know that a gap exists in finding straightforward simple advice and it's often hard for them to find what they need in a world overloaded with a minefield of information.
My book aims to help them understand that what they are feeling, especially around money, is pretty normal and they are not the only ones to feel overwhelmed by anxiety about the future. I try to help with some simple first steps to take and some explanations of topics, in what I hope is a straightforward way, to give them information which will be useful, sometimes vital, in making financial decisions.
Why do you think women find it difficult looking after the finances?
Usually one person in the family is responsible for organising the financial affairs and, if that has been a widow’s husband, they are then faced with not only the grief of their loss but also the very frightening reality that they are going to have to also pick up the responsibility of looking after their finances at a time of real fragility and vulnerability.
So it's the lack of knowledge and confidence that is often the problem; they are having to pick up all the pieces and often don't know how or where to begin to make a start.
What is a simple way for women to get an overview of their financial position?
My book tries to give them some simple steps to get going, creating their own system to look after their finances so that they are building their knowledge about their financial position and at the same time growing in confidence.
By creating their own paperwork system and using the templates in the book, which are also available to download from my website A Widow’s Guide, they can build a picture of their overall financial position.
Visualising money, and thinking of their resources as a tank with money flowing in and money flowing out, can be really helpful in “seeing” how their money flow looks. In other words, is their tank emptying rapidly or is it likely to be filling up?
What are the most common mistakes widows make when it comes to money?
There are a few that I see again and again, for example jumping into making decisions too quickly, thinking that they should be doing something. Unfortunately, as soon as money hits a bank account, the bank are on the phone suggesting that there is a need to come and talk to someone when generally it is far too early to be making decisions. Investing money should only be done once the ground work has been carried out to establish what would be the best course of action. For example, paying off debt might be much more sensible.
Another mistake I see is rushing to move house in an attempt to distance oneself from the inevitable pain of loss. It's usually far better to wait awhile until things settle down and one is thinking more clearly about what will be important to them in the future.
A very difficult one to deal with is when a member of the family asks for financial help. What might seem like a lot of money from an insurance policy or a pension might have to last a lifetime, so it's vital in this situation to take some advice from a good financial planner who should be able to identify if there is enough capital to help others and, if so, how best to do it.
What really matters when investing money?
It's important to understand that when it comes to investing money there are different types of risk. One of the dangers when thinking about investing is that most people think of risk as the value of your capital going down which, of course, is one of the risks of certain types of investments. However another risk is that over your lifetime inflation will eat away at the value of your money if you don't put at least some of it to work where it has a chance of keeping up with or beating inflation. For example if your money is in the building society growing at 1%, and inflation is running at 3%, over time the real value of your money, its buying power, will reduce over time. So it does make sense to at least find out about alternatives to just putting money on deposit.
Making sure you pay the minimum amount or, in some situations, no tax at all when investing, makes important sense and is likely in the long term to make a significant difference to how successfully you invest money.
Another important factor is to understand what growth you actually need to make on your money to ensure that you don't run out. This is a very difficult thing to do on your own. Although carrying out the exercises in the book will create the background information needed, this could be where it pays to take professional advice. A good financial planner should be able to help you create a lifetime cash flow which would show you what your future picture looks like if you were to take different actions; in other words, some ‘what if’ scenarios. For example, what if you just kept your money in the building society? What if you used a pension scheme to build resources? What if you repaid your debt with your capital? What would your picture look like looking into the future?
Why is it so important to think positively about your financial future?
Without fail, all the widows I've worked with have, given the right information, time and encouragement, taken control of their finances and become “canny” with money. I often say to them, and include this in my book, “Go as far as you can see, then you can see some more” and this is so true. By taking control bit by bit and building confidence you can think positively about your financial future, even if it is looks tough. It is far better to approach it with a can-do attitude as this will make you feel steadier and better equipped to make better decisions.
Why are people often frightened to ask about money?
There are many reasons why people are frightened and uncomfortable with talking about money. For many women, they are embarrassed to ask what they think are silly questions, believing that everyone apart from them knows the answers. If there is one really important piece of advice I can give about this it's “ask away”. If you lose the thread of something early on it's likely to be very difficult to catch up later, so make sure you ask. You could always pose the question “To make sure I've really got that, would you mind going over it again?” Most professionals are only too happy to make sure you understand and, if they make you feel small or stupid, they might not be the right person to advise you! Another problem with communicating about money can be that sometimes people are conditioned to believe it's not polite to discuss money, or that they might appear to be greedy.
We are all conditioned about money even though we don't necessarily recognise it. The way your parents communicated about money, and how money was dealt with during your marriage, creates beliefs about finances that can influence the way you think about it. Being able to have an open and honest discussion about money with someone trustworthy is a really important step in moving forward on your own.
Please can you tell us a bit about your professional background?
I have always worked in the financial world, I started with an insurance company at 18 and moved up the ranks until I reached age 30 and decided that I really wanted to run my own business and advise clients directly. That was 25 years ago and running my business ‘cre8 Wealth Management’ in Kidderminster is really satisfying as my years of experience mean I am able to quite quickly reduce the fear and anxiety people often feel, especially women, about the minefield of money and investing. I'm very fortunate in that I have some wonderful clients that I have advised for many, many years and really enjoy my role as their trusted decision partner.
What is next for you?
I want to try and raise as much money as I can from the sale of my book; the proceeds are going to the Mary Stevens Hospice in Stourbridge. I am studying for some further exams on the subject of long term care as I see this as an increasing problem area as we live longer and longer. And, of course, I hope to meet more widows that I am able to encourage and empower to move forward, which will put them in control of their finances and so help them look forward positively to the future.