Financial burden of becoming single

Regardless of how it happens, it can be shocking for anyone to experience the transition to becoming suddenly single.

The financial burden is amplified even more so if they were not the one responsible for managing the finances.

For many women and men in this situation, anxiety becomes the prevailing emotion. Not only are they walking through loss and drastic life changes, but they simultaneously face the overwhelming responsibility of making major financial decisions and taking over all aspects of financial management.

A common challenge for people in this situation is to know where to turn for support and guidance on financial matters. Finding a shoulder to lean on, a listening ear and someone to act as a problem-solver will help alleviate the stress and provide confidence in knowing their finances are on track.

A unique situation

Many of the new clients I meet in these types of situations often are feeling paralyzed. They know they need to take action on their financial life and start getting things in order, but they don’t know where to start.

Much of that inability to act comes from a fear of making a mistake.

They may have relied heavily or entirely on their spouse to handle financial matters and they worry about how to move forward and don’t feel empowered to make decisions.

This isn’t all that different from what a new parent experiences with a newborn child. She or he is afraid of the long-term consequences of any particular decision, and this can lead to confusion, loss of sleep and indecision.

It is important to not feel rushed, but is important to establish a plan to help navigate the complexities of their new circumstances and relieve some of their anxiety by guiding them through their big financial picture.

Prioritizing the near-term to-do lists along with long-term needs will help alleviate the burden of an overwhelming situation.

Near term

Initially it is best to identify where your monthly expenses are being paid from and how you will pay for your future needs. Making sure you have access to a credit card and a bank account is the top priority.

Establish an incoming “basket” of all relevant bills and confirm how they have been paid in the past will help clarify your budget. Check your email for any “paperless” bills and determine how they are being paid.

This also will help you gain control of the monthly expenditures and give you some time to focus on your longer-term needs.

Identify any electronic deposits to your bank account which can include Social Security, pensions and other sources of investment income.

Once you are comfortable knowing the monthly expenses are being paid with a predictable source of income, you can direct your thoughts to a longer-term plan.

Longer term

Create a folder that includes all relevant financial documents. Ideally this is done before becoming suddenly single, which will lessen the overall burden dramatically.

If not, start now and include:

This is a partial list, but will provide a foundation for the future.

Oftentimes in these scenarios people will find themselves with a life insurance payment, a divorce settlement or another type of financial windfall. Without a strong financial foundation, all this money becomes a burden and a source of stress.

The goal is to create a plan that helps clarify your priorities both for the present-day and future. By creating a plan and receiving the proper support, education and direction, you may start to live life with confidence and comfort again.

This article is provided by Pete Alepra, a financial adviser at RBC Wealth Management in Cedar Rapids; peter.alepra@rbc.com. The opinions in this article are for general information only and are not intended to provide specific advice or recommendations for any individual. Past performance is no guarantee of future results. RBC Wealth Management is a division of RBC Capital Markets, a member NYSE, FINRA and SIPC.