Suddenly single: Managing on 1 income

By Jennifer Rose Hale

On the list of most stressful life events, death of a spouse and divorce occupy two of the top spots. And if the loss of your partner is sudden, you usually have more to deal with than just your finances.

At first, anyway. No matter your household, whether you're in an apartment or split-level, whether you have kids or cats, eventually you'll need to take stock of your finances. The electric bill will keep coming, and groceries will need to be bought. If you're facing a loss such as this one, a few key steps can get help you effectively assess your situation.

Step 1: Find the money

Depending on your situation, you may know your household's exact net worth--or you may be completely in the dark. Many couples will split duties in their relationship, leaving one with endless knowledge about lawn maintenance but no clue where the savings account is. Tough times make it clear that involving both partners in money matters is critical.

Start with the paper trail: files, receipts, tax forms. Many will include account locations, if not numbers. Keep a notebook or spreadsheet and write down accounts and holdings as you find them. This task may not be easy: Entire websites exist to help you find unclaimed money.

Don't overlook online checking accounts and other money in the "cloud," which may have email statements rather than paper.

Step 2: Determine what you owe

To complete the picture of your current situation, compile a list of what you owe. You may find these typical debts:

  • Mortgage
  • Car
  • Student loans
  • Credit card bills

Debts without your name attached are not your responsibility--especially in the case of credit cards and student loans. (The Federal Trade Commission offers insight on debt after death in its publication, "Paying the Debts of a Deceased Relative: Who Is Responsible?")

But the situation gets trickier when debts are shared, such as a mortgage, or when the debt is secured by something you would like to keep--like your house. In case of divorce, the ownership of these items (and corresponding debt) may be determined by a judge.

Step 3: Start--or revise--a budget

Chances are, when a partner leaves your life, your household finances will be affected. Your income may drop significantly if he or she had a full-time job, or you may see expenses go up as you have to pay for efforts your partner contributed--replacing home-cooked meals with more convenience dinners, for example, or having your lawn mowed twice a month.

For these changes, a budget is critical. Once you fully understand your financial situation, you can start figuring out what you can keep in your life and what changes you might need to make. The $800 rent may be feasible on your income, but not while keeping martial arts classes for the kids. (Alternately, you may want the cheaper rent or mortgage while keeping the tae kwon do.)

If you don't already have one, creating the perfect budget will take some time but will certainly save you money long-term.

Step 4: Make changes … at the right time

If you can, avoid taking action quickly after heartbreak. If you're emotionally compromised when making a big decision--moving, for example, or investing in accounts you don't fully understand--you could end up hurt financially. You may find that you can't afford to live in your current home for the long-term, but waiting six months to sell or move probably won't make that big a difference.

Additionally, look to savings accounts with high interest rates to stash any liquid assets that come your way, whether from insurance or other means. You'll earn some return on your cash and keep it safe at the same time.

Step 5: Ask for help

The sudden loss of a partner may leave you feeling isolated. Accept offers of help from family and friends. A clear-headed and trusted friend may be able to help with problem-solving as you figure out your new household budget and find ways to save money. He or she can also provide the emotional support you need to find your way out on the other end.

Loss of a partner, no matter the circumstances, is one of the greatest challenges a person can face. But you can make the best of it with careful choices and the support of trusted loved ones.

In addition to these steps, keep in mind: Estate and divorce attorneys exist for a reason. If you're facing either situation, professional help is a wise thing to consider.