Mindful and Intentional Spending for Widows
The Tool You Need to Start the New Year Well
I had lunch today with a widowed friend who told me she had spent a good part of her Christmas holiday planning for 2014. “I love the blank canvas that the new year provides,” she explained with enthusiasm.
Clearly this is a woman who has moved through her grief and is putting into action what many of us hope for: that the new year will provide an opportunity to feel better, to do things differently, to make a fresh start that will help us find happiness again.
One area of focus for some is finances. And a good place to start is becoming more mindful and intentional in our spending. Even the smallest measures can make an immeasurable difference to one’s real and perceived feeling of control. And let’s face it, after the death of a spouse life feels very much upset and out of control.
So here is my practical and emotional financial tool for becoming more mindful about your spending: a budget. Except that I don’t actually call it a budget. To my way of thinking, budgets are like diets. Comedian Jackie Gleason once posed the rhetorical question, “Do you know why the second day of a diet is always easier than the first? Because by the second day you’re off it.” Budgets tend to be like that too don’t they? Diets and budgets – they are both about restraint and denial. Not very inspirational! But a spending plan (like a healthy eating plan) is positive. It’s about making intentional choices. And by aligning those choices with our deepest and most important values we find peace. After all, we are all dealing with finite resources. Shouldn’t we allocate our resources to the things and experiences and people that mean the most to us? A spending plan can help you do that.
Any spending plan has two principal components:
1. Income: On the income side you list whatever your sources of income are. Whether it’s employment or income from investments – or other sources. Do your best to list them all and estimate where you’re unsure.
2. Expenses: It can be helpful to break expenses down into four organizing categories.
Fixed expenses. These are costs that don’t tend to change from month to month. For example, rent or a mortgage payment, car lease/loan, monthly child care, cell phone plan, etc.
Some may make it a practice to donate a fixed percentage of household income to their religious institution or other not for profit groups – and so may consider charitable giving a fixed expense.
For many, it may also be advisable to set aside a predetermined amount each month for savings. The expression ‘pay yourself first’ suggests putting aside 10-20% of total income for savings. That may not be possible, or even necessary, but it is a line item to consider within a spending plan.
Necessary variable expenses might include costs such as food, clothing, home repairs, etc. These are necessary expenses but they are not wholly predictable.
To help manage these variable expenses, I have found a little trick that works well for me. I call it my Walking Around Money (WAM) on my spending plan. WAM is for those incidentals I pay cash for each week – my Starbucks, my parking, my lunches. At the start of each week I allocate a fixed amount that I have to live within for the entire week. I have found this useful for two reasons: one, it frees me from having to keep track of every small item I buy, and two, it imposes a discipline to my spending that ensures these incidentals don’t get away from me.
Discretionary expenses is the third category. You might include vacations, recreational activities, aesthetics, lessons, gifts, etc.
Seasonal adjustments is the final category that captures those costs that occur very infrequently – and tend to be forgotten when preparing an annual plan. Some examples: annuals for your garden, Halloween decorations, snow removal, driver’s license renewal, accounting fees, etc.
I like to organize my plan by these categories because they give me the clearest picture on what my spending is – and how it varies through the year. It’s important to note that:
- When you have prepared your spending plan, stop to reflect on it.
- What does it tell you about what’s important to you?
- There is a saying from the Bible that, “where your treasure is, there your heart will be also.”
- Where is your treasure?
- Where is your heart?
Other questions for reflection: what financial behavior am I modeling for my children? Is my grief impacting my spending? Am I okay with this?
The next step is to live your spending plan for a few months. Quite likely it will change. I find that for many people, it takes a full year to know their true cost of living on their own. After the death of a spouse, of course, some costs disappear or are reduced and others actually increase. Just do your best; don’t judge yourself and know that you can revisit your spending plan in the future when you have greater certainty. It’s a process. Much like moving through our grief.