A Widowed Woman’s Guide to Finances
Excerpted from THE WIDOW’S MIGHT
Now what? Garcia my husband was dead, and I was left to raise our children. I was a licensed insurance agent, security broker, and financial planner, so I was confident that I could handle the finances. Now I had to make some decisions. I did not feel like doing any of the thinking about the task that lay before me, but we had to eat. Garcia’s journal helped.
First, I cleared off my desk and made a space to work and put together some files. After obtaining copies of the death certificate, I processed the paperwork for the life insurance payments, social security, veteran’s survival benefits, and payments on any debts we owed. I also discovered an old policy that had a benefit because he had become 100 percent disabled, and although it had been canceled earlier, I discovered there was a waiver that caused us not to lose the policy for nonpayment. It is good to apply for every life insurance proceeds even if you think the policy has been terminated.
Below are five steps that can help the surviving spouse:
1. Apply for at least twenty copies of the death certificate.
2. File insurance claims for all policies, no matter whether you believe they have been canceled or not.
3. Contact Social Security and report the death.
The telephone number is 800-772-1213. They will require the death certificate, your marriage license, and the birth certificates of each of your children. Often the funeral director will call if you ask, or he may offer to do so. If qualified, there will be a one-time payment of $255 paid to the spouse. Monthly benefits may also be available to the spouse if you have children under the age of sixteen (or disabled) or if you are sixty years old (fifty years old if you are disabled).
4. If your spouse spent any time in the military at all, contact the local Veterans Administration. They will send you an application for benefits and will require a copy of the service person’s DD214. They too will need copies of the death certificate, the marriage license, and all the children’s birth
5. Call your spouse’s employer. They probably have contacted you already, but now you will need to take the time to review the benefits you may continue to keep and make the necessary changes to keep your family protected with health and life insurance. If your spouse died while on the job or at work, you may qualify for workers compensation insurance. Speak with the human resources department. They may require proof of his total hours worked, so pay vouchers could be needed.
I found it very important not to be pushed into making any decisions. After Garcia died I made a few major purchases and almost made some serious errors, but I recognize that I was moving too fast and halted my errors. I believe that there should be a six-month to one-year period before any major financial decisions are made. Everything changes so very fast, and other than paying pressing bills, it is better to wait out the changes.
I did make some very safe short-term investments (less than six-month maturity dates), but only made long-term decisions after the six-month period. There were very many unscrupulous salesmen calling me, and I am sure if I had not been a financial planner, I would have been caught in their traps.
I ask that you do not make any financial decisions until after the first six months. After that time get a very close family member or friend to help you find a good financial planner. You should always be able to ask your pastor for suggestions about good investment advisors, and if you have access to a credit union, you will find it a valuable place for security at this time.
Don’t fall for get-rich-quick schemes. I did not have problems with people asking me to invest in their businesses, but I tell you, many people were telling me how they were about to get their cars repossessed or their houses foreclosed. I became the person they believed would bail them out of their problems. I wanted to help, so I spoke to a leader of my church that was able to help me see that these people had used the same story frequently. So if you feel the need to help a struggling individual, please talk to your pastor; they have information we will never know. Family members may also need help, but again, I encourage you not to do anything for six months.
After that time get a very close family member or friend to help you find a good financial planner. You should always be able to ask your pastor for suggestions about good investment advisors, and if you have access to a credit union, you will find it a valuable place for security at this time.
Don’t fall for get-rich-quick schemes. I did not have problems with people asking me to invest in their businesses, but I tell you, many people were telling me how they were about to get their cars repossessed or their houses foreclosed. I became the person they believed would bail them out of their problems. I wanted to help, so I spoke to a leader of my church that was able to help me see that these people had used the same story frequently. So if you feel the need to help a struggling individual, please talk to your pastor; they have information we will never know. Family members may need help, but again, I encourage you not to do anything for six months.
Soon the paperwork started coming, and so did the checks. The mailbox always held some form that I would process on my special desk in my special files. I was usually my best about 11:00 a.m., so that was the time of day I worked on the mail and made telephone calls. Although
we used separate bank accounts, we always put one another on the accounts as joint owners with right of survivorship, so I had no problem accessing cash in the bank.
I paid the bills that I knew existed, and to make sure I had covered all bases, I ordered credit reports. I also reported my husband’s death to the bureaus. One day I got a telephone call that my husband had purchased a boat; they were going to deliver it COD. It was the headache for the day. First of all, Garcia would never buy a boat, and second, I recognized the scam. I just said, “Oh, that was delivered already, thank you,” and hung up.
Garcia had been ill for eight years before his death, so I was already in charge of the basic household finances, but I had so many bills to pay and so many papers to fill out. It was overwhelming to say the least, so I would keep the information organized on my special desk. But soon I found that I needed to prioritize all the papers. So I made a new budget based on what had to be done to maintain the family. I call it MUFI, an acronym for:
I added up how much money I should have coming in every month, then subtracted my tithes and worked with what remained. I figured that if all else failed, I needed to at least make my mortgage payment, my utilities, food for the children, and insurance. Once I paid the priority bills, then with the money that remained I started paying my next set of priorities, which were my consumer debts:
• Car payment
• Credit cards
Then I started with the other areas:
• Gas for the car
• Lunches for the children
• Music lessons for the children
• Dry cleaning
Miscellaneous spending Then I put the remainder in my checking account. Once my checking account had about three times the amount I needed to run my household for one month, I placed it in a money market account. This became my emergency account. Once the insurance companies paid their benefits, I had most of the bills paid, so I could save the money.
I trained my children in money management by allowing them to handle the bulk of their responsibilities. I
totaled the regular amounts I had been spending on them and made monthly deposits into their credit union accounts. The children would have to give me their budgets every Saturday, and we would go to the credit union and they could withdraw only what they had budgeted. I included money for the items listed below.
It seemed like a lot of money, but the children started with just the amount for one week of lunch money while they were in junior high school. Each of them experienced the problem of spending their entire week in one day. I did not give them more money, but I did allow them to make a sandwich. I felt that if they made mistakes with their money while they were still living at home, they will learn not to make the same mistakes when they became adults. As they grew older, I gave them more responsibility. I remember driving home with the children in the car and they would say, “Mom, there is a fast food place.” I would reply, “Good; who’s paying?” Then they would reply, “Oh, let’s go home and cook,” or “Didn’t you put a chicken in the Crock-Pot?” When on the occasion that I did take them out,they would always be very grateful. They thanked me over and over. When they became responsible for so much of their own finances, they could appreciate how much sacrifice it took for me to spend extra money eating out or buying gifts.
I had started back to school three days before Garcia died and was working on establishing a credit union for our church. I had the privilege of writing the business plan and the charter request for the financial institution. After the credit union opened, I spent much of my time helping other women, and especially the widow’s and single parents. I was made president and we based our successes on the ability to teach financial education.
When I paid for my daughters Clarinet reeds, I would purchase 15 at a time and would find them under her bed and laying in her case. When she begin purchasing her own reeds she would wrap them in cotton and use them for months. She even learned to make her own Bassoon Reeds. She discovered if she hung up her clothes, she would need to have them cleaned less often. One morning I saw her making her lunch and asked her why, and she told me that lunch was just to expensive. I am sure if I had told her to make a lunch I would have gotten an interesting argument, but when it meant she would save money she had no problem.
My son's also had some interesting experiences while learning to handle their finances. My oldest son decided that he was spending to much money on hair cuts and after some heated negotiations convinced his younger brother to pool their haircut monies and purchase a pair of clippers. Then they proceeded with the experimental stage of learning to cut one another's hair. It was a pretty hairless summer but by the time school started my oldest son was very good at cutting hair. He told me that while he was in college that he actually earned his laundry money by cutting hair.
One day when it was time to purchase new tennis shoes I informed them they were to pay any amount in excess of the $50.00 I had budgeted. They were given an amount monthly for sports and it was to be used for such occasions. When we got to the store I was amazed to hear my son, my fashion conscious, always clean and crisp, can't wear the same thing twice in the same month son , ask the clerk if they had any shoes on sale. When it was my responsibility to purchase their shoes they always went for the latest and greatest shoe and all of a sudden it was about a good purchase. Well they found shoes and the brothers actually, to my amazement again, purchased the exact pair of shoes. Now if it had been me, first of all last years "Jordan's" would never do, and the same pair, those boys had not dressed alike since the preschool days. Oh there is more. The shoes they purchased cost $54.00. I think the $4.00 was the tax.
How exciting it was to see my children become financial savvy. One report card period they all received straight A's. The Lord ministered to my heart and I took them to an upscale restaurant to celebrate. During the celebration I shared with them what God had said to me. I told them they would not have to work while in school if their grades continued as straight A's. Their jobs were to study hard and to maintain their GPA's. I would continue to increase their allowances as long as they continued to do well. Interesting enough they were all in college at the same time and received a combined grants and scholarships in excess of $78,000 per year. It was well worth the allowance to give them the time to study and to keep their grades high.
Today, they are still excellent money managers, and me, well I went back to school, opened a credit union for our church and began teaching these techniques to all who would listen.
Credit Repair is a very important
Again I must warn you, there are people that will take advantage of your weakened state and they actually prey on widows. Those adds they say they will repair your credit if you pay money or they will erase the negative information if you pay them are false. The only way to repair your credit is to understand what a credit report is, why they are used. Know what is good credit, bad credit, and no credit. Understand a charge off, a judgment, a collection,and a lien.
1. There are 3 main credit reporting agencies. Your financial institution can help you obtain copies of these reports. I suggest you ask for their help first rather than use an on line product until you have an opportunity to understand the necessary processes. Have a copy of your own credit report, not one with your late spouses name. You need to know how you stand.
2. After you get the reports, it may look like Greek, but have a loan officer at your financial institution
explain the report to you.
3. If there are discrepancies you can easily write letters or complete a form to have them corrected. If there are accounts you had not known about, do not just assume your spouse had these bills, do some research, find out if they were really his or hers. Demand proof. If the bills are legitimate and you did not sign the applications, they should not be listed on your credit report. Even if you had a credit card but was not responsible for the debt and did not sign the loan application it does not have to be listed on your report. I suggest that if the debt is paid and was paid in good standing you leave it on the report to strengthen your score, but if there is a poor payment history, have it removed. Once you separate the correct from the incorrect items you can proceed to pay your debts.
4. If there are any old unresolved debts and you now have the money to settle the balance, you can call the agency and request a settlement amount and have the debt reduced. Ask for a written agreement faxed to you prior to sending any monies.
This is your record of their agreement and the account should read zero balance after your payment.
5. Charge offs, liens, judgments and collections, can often be settled for an amount less than was owed, because late fees and interest can be forgiven.
After you restore your credit then do the same for you deceased spouse. Speak with your attorney prior to the task because many of the debts will be part of probate process.
I am not a lawyer, I am twice widowed, however I have gone through probate twice. I suggest you ask your clergy to recommend a good lawyer if you do not have one and although some well meaning friends and family will tell you there is no need for a lawyer, speak to a lawyer anyway. Each state has so many rules and regulations concerning; joint property, real estate, and some many other areas, only a professional can discuss. So again I encourage you to ask your pastor for a referral.
THE ART OF CAR NEGOTIATION
Many wives have always left the purchase of a automobile to their husbands, but I decided that I was going to finally spend some money and I wanted a new car. I had stopped mourning Garcia's death and now I was going shopping.
I learned and now teach these simple steps to purchasing a vehicle.
1. Negotiate price:
The number on the sticker of a new car is the Manufactured Suggested Retail Price. The optimum word here is suggested. That is not what the car should cost you, it is only the suggested mark-up on the vehicle. I have learned that a dealership can sell a car for what ever price they desire. That's right, there is no law or regulation about the price they can charge. So if a person is a good negotiator and has done their homework they will pay thousands of dollars less for a vehicle than the average consumer. Starting my research, I got the actual price thatthe dealer paid the factory for the vehicle. Yes, my credit union was able to provide me the dealer's invoice price.
Notice I did not say customers invoice, I said dealers.Dealers pay the factory for the vehicle then they pay for transportation. Sometimes there are fleet prices for dealers and incentives offered to them by the factory so what they pay may vary but basically, I needed a negotiation starting point. I realized that the dealership must make a profit and the salesman must feed his children, but as a good steward of God's money I too had to be cautious.
Next, I decided what I thought was a fair price and spoke to the salesman. He listened to me, laughed, then told me he needed to speak to the sales manager. This is a regular technique used to make the consumer think that there is a serious conversation taking place for their benefit, when actually there are preset price reductions based on, how long the car has been on the lot and the incentives the dealer received from the factory.
When the salesman returned he told me they could not meet my price and this was the only thing they can do. So I told him that I am buying a car today, I have cash and I can get it here, across the street, or next door, but I am going to buy a car and am not paying more than the priceI just offered. I then started to walk away, and of course he stopped me and I paid the price I suggested.
Since that time I've had the oportunity to negotiate hundreds of car purchases for friends, family, members, and clients. Having the value is always the necessary first step. To get the value of a used car, the salesman will tell you the "blue book" price. They are referring to the NADA price guide, however there are 3 blue book prices. Retail,Trade-in, and Loan Value. The salesman is referring to the retail price but a car is only worth the loan value. Retail is a higher price than the loan value and the Trade-in value is what is used to calculate the price the dealership "should" give you for your trade, however I have found that rarely to happen. There is always a reason to reduce the value and most common is the mileage of the vehicle. So don't get comfortable with the price of a used vehicle just because the salesman may say it is less than the Blue Book value.
If you choose not to pay cash for your vehicle, I have found the best financing options at credit unions. Not only because they are usually very people friendly, but because they may use a risk based lending concept that allows them to price the interest of your loan based on your credit history. They also use simple interest calculations for your repayment amounts. This type of interest reduces more of the principle payment monthly because the interest in calculated on a daily rate. This means that you may also have the opportunity to negotiate your financing.
If you choose to use the financing afforded you by the dealership, you can request simple interest. Car dealerships will also offer you a gambit of other purchases, extended warranties, paint protection, leather protection, and life insurance just to mention a few. Your new car comes with a warranty and I assure you that at the time it is due to expire you will be bombarded with offers to purchase a new one. If you have adequate life insurance already, do not be pressured into purchasing more. With our recent losses, we can become extremist and just start buying up all the life insurance we can get. Slow down and pay attention to your emotions.