14 Complicated Situations I Can Guide You Through (as your Financial Sherpa)

We often think of finances as a calculative and dry subject. We believe that the cold numbers will lead us to an objectively correct way to spend our money. However, life is full of unexpected and difficult choices and sometimes there isn’t a purely data-driven answer available.

In these times you need to examine factors like your mental state, your money story, future goals, and personal relationships to figure out what is right for you. I’ve covered 14 situations of times that disrupt our emotions and make it the most challenging to make a smart decision.

Table of Contents:

1. Managing Finances After the Death of a Spouse
2. Dealing with Financial Imbalances Between Partners
3. Getting Your Bearings after a Divorce
4. Unexpected Financial Windfalls
5. Windfall Falling Through
6. Economic Shifts Outside Personal Control
7. The Money Side of Having Children
8. Caring for Elderly Family Members
9. Being Responsible for Extended Family
10. What to Leave my Kids
11. Engaging in Meaningful and Personal Philanthropy
12. Harnessing Our Inner Bag Lady
13. How to Understand My Money Story
14. Healthily Reflecting on Our Financial Habits

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Managing Finances After the Death of a Spouse

The death of a loved one starts you on an emotional rollercoaster. Everything happens abruptly and your surroundings can blur together. There are no places to get off and you’re forced to ride it out until the end.

For most people in this situation, collecting and organizing financial information is far from the front of their mind. However, certain financial decisions can’t be put on the back burner for long. Important payments like your mortgage require action even in times of grief.

So, if you’re feeling overwhelmed, then it might be a good idea to bring in a professional to help you prioritize. They’ll take care of everything that needs immediate attention so that you can have the time you need to grieve.  

This process allows you to approach your finances from a healthy, stable perspective. After all, grief can convince us to make rash and improper decisions.

In the meantime, take the time to get your emotions in order and seek out help if you need it. Visit support groups and speak to people in similar circumstances. Get as close to normalcy as possible with your children, friends, and family.  When you’ve settled down, then you’ll be able to make financial decisions that take care of your future and honor your partner’s wishes. 

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Dealing with Financial Imbalances Between Partners

There are many reasons why one partner may earn less than the other. Perhaps one of you left your job to take care of the house and children. Maybe one of your chosen professions is more lucrative. Regardless of the reason, power imbalances can take a toll on even the most loving and supportive relationships.

When one person is less financially stable as an individual, it can feel like they have a smaller voice in related decisions. Feelings of inadequacy or loss of personal power will inevitably lead to an increasing number of arguments.

This could also appear in the form of guilt from both sides. While the lower-earning partner can feel like they’re not contributing enough to the relationship. That they’re being one-sidedly cared for. On the other hand, the higher-earner can pick up on these feelings and develop guilt over harming their loved ones. Inadvertently or not. 

Combating this requires understanding what each person values in the relationship. Maybe their Money Story led them to place a lower value on financial contributions. Maybe they grew up truly believing that all money is shared in a partnership. Through understanding each other’s money stories, you can truly understand what you bring (or don’t bring) to your partner’s life. 

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Getting Your Bearings after a Divorce

Divorce is an emotional death. It’s the symbolic representation of taking your relationship and burying it 10 feet deep. However, unlike the ancient Egyptians, our assets and wealth aren’t buried with the body.

Emotions of fear and anxiety can crop up when you go through a divorce. There’s the obvious fear of ceding your involvement in your children’s lives to your ex-partner. But there are also fears of losing your lifestyle and your future security.

Getting over this fear is necessary to have a fair and clean divorce. If you don’t, then you’ll be approaching conversations under a combative cloud. The importance of an asset to each partner isn’t necessarily 1:1 with its financial value.

Understanding your ex-partner’s money story will greatly help in divvying everything up so that you each get an equal share of what’s important to you.

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Unexpected Financial Windfalls

So, you’ve had a stroke of good fortune and money has unexpectedly fallen into your life. You probably have a laundry list of things you’ve always wanted if only you had the money to buy them. But there’s a difference between a list of things you dream about and what you need.

Scrap that list. It’s time to make a new one.

Keep in mind that a financial windfall has innate value even if you don’t spend it on anything at all. However, if you’re adamant about a “use it or lose it” mindset, then try to incorporate your values into the purchasing decisions. Learn what types of things bring you the most emotional satisfaction or freedom.

By understanding what’s most important to you, you’re able to better align your spending with your value system. Rather than seek instant gratification, it’s better to use it on long-term investments that fulfill yourself in a myriad of ways.

For example, do you feel weighed down by credit card or student debt? Wouldn’t it be liberating to finally be rid of it (or at least a chunk of it?)

Do you value time spent with your family? Then buy something that you all can do together and build memories with. Learn to direct your purchases in this manner, and you’ll gain much more satisfaction from your good fortune.

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Windfall Falling Through

We structure our lives around certain certainties or what we believe are certainties. Things like being paid on time this week. Getting at least ‘X’ amount of money in our Christmas bonus.  You may even be counting on receiving money left in someone’s will.

We sometimes forget that nothing is ever certain. Bonuses can be canceled, paychecks can be late, and wills can be revised without anyone knowing. Even if you’re holding onto an investment or an asset, until you’ve taken steps to cash out on it, then it’s not 100 percent reliable. Stocks can plummet and property can drop in value. Nothing is certain. Maintain the mindset that money you can’t hold in your own two hands isn’t yours.

However, if you’ve already made the mistake of spending money you don’t have, then you need to get on damage control. Get the money back if possible or find ways to cut down your spending until you make up the difference. The slower you move, the bigger the problem becomes.

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Economic Shifts Outside Personal Control

It sucks to say, but life isn’t fair. Our finances will be pressured at times regardless of how responsible and fiscal we are. Global events like pandemics, wars, and political schemes can ruin economies and wrench our jobs away from us.

This unfairness unleashes anger and pity for ourselves. An understandable response for when the world gives us the bird. But just as there was nothing you could do to stop it from happening, there’s also nothing you can do to change it.

So, we should learn how to ride the waves as gracefully as we can. Figure out where you can cut costs in your daily life and look for temporary (possibly lower-paying) jobs to tide you over. Do whatever you can to get yourself stable enough to stand tall once more.

Above all, never convince yourself that, “Things can’t get any worse.” There’s no guarantee that whatever caused your problem won’t continue. Because it can. But adapting quickly is the key to minimizing damages and preserving the key parts of your lifestyle.

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The Money Side of Having Children

One of the biggest choices we ever have to make in life is the decision to bring children into it. It’s not a simple shower idea that you’re rolling with on a whim. There are hundreds of things to consider, like your maturity, available time, and financial state.

It requires you to partially look into the future. To predict what your life will look like, and how it will transform after you have a child.

Even if you think you’re well off, the costs of a child can be painfully surprising. Things like insurance, medical bills, specialized food, toys, and sleeping equipment will strain your budget. Not to mention the diapers. More diapers than you can imagine.

You need to consider what you and your partner are willing to give up and what you’re not. Things like personal training and fancy restaurants may need to be put aside for a while if you want to give your child the life you imagined. What’s removable from your life while still allowing enough resources to fulfill yourself? After you know that, ask yourself, “will giving those up let me save enough money to raise a child?”

This doesn’t only apply when your children are chubby and cute. It extends to the moodier phases as well. There are two life events that many parents dread having to pay for.

College and marriage.

Both are ridiculously expensive events in your child’s life. You need to decide early on a reasonable target you want to hit and how much you want to help your child. Like with all goals, setting a target greatly increases your odds of reaching it.

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Caring for Elderly Family Members

As we get older and gain more life experience, we get a better perspective of what our parents went through to raise us. So, when it’s our turn to take care of them, it’s hard to say no, even if it’s not what we imagined for ourselves.

If you assume the role of a primary caregiver, then you’re over 10 percent more likely to report financial difficulty than secondary caregivers. After all, you’re taking on an adult who likely has a variety of medical needs.

Look for the early signs. If you know that illness runs in your family or your parents may struggle in their later years, then you’ll want to start preparing early. If possible, put aside some money to cover their future living and medical expenses.

Do your research and be honest with yourself about how much their care will cost you. It might not be enough to save whatever just happens to be left over. You might have to give up certain luxuries if you want to save enough for their future.

To get a good estimate of your parent’s future expenses, discuss what THEY expect from their future. You might not be able to provide everything, but it’s a good starting point to find some common ground. There’s likely to be a large number of concessions, but remember that it should be a 2-way street. It’s vital that you both find ways to stay happy without trampling on the other’s lifestyle.

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Being Responsible for Extended Family Members

One of the less desirable consequences of success is the barrage of expectations you get from those around you. They expect you to help them out because “you can afford it” and they turn you into the villain for not doing enough to share your success.

This can be particularly frustrating when these expectations are coming from your spouse’s side of things. The over-reliant family is a classic hook seen in dozens of family comedies. Common cast members include the hateful mother-in-law, the overbearing father-in-law, and the deadbeat brother. 

It’s hard to find the line between helping out family and being taken advantage of. But you must strike the right balance if you want your spouse to maintain close ties with her blood. Many couples try to reach an agreement with the extended family, but that isn’t the correct approach.

In the end, you’re doing this for your spouse. So, they need to have the biggest voice in what’s acceptable. It’s their money story and emotions that will decide if you’re helping too much or too little. Before you hand over a cent, make sure that you create guidelines for the generosity that you’re both happy with.

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What to Leave my Kids

Raise your hand if you enjoy speaking to spoiled and entitled children. Anyone? I didn’t think so.

Everyone wants to raise their kids to be upstanding and successful people. Leaving them too much money after you pass might give them the agency to learn lessons that go against that goal. Alternatively, leaving them nothing may hurt their feelings.

You want to leave them enough so that they can feel secure and that they know you cared for them. Finding this sweet spot is like performing advanced calculus without a trusty “TI” calculator.

It starts with dissecting what each child wants to achieve in their life. What kind of lifestyle do they want to lead and what dreams do they want to pursue. Their money story, both past and present. Considering all of this show them, on an emotional level, that you understand them and want what’s best for them.

As their parent, you play an ENORMOUS role in developing their money stories Become a model of the financial credo that you want your children to adopt and let them know what’s important to you. Do you value taking financial risks or playing it safe? Is frugality important to you? Teaching your children these things about you tells them what to expect when you pass.

So, as long as you practice what you preach, then your children are more likely to be understanding and respectful of what you leave them.

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Engaging in Meaningful and Personal Philanthropy

There are literally thousands of charitable efforts out there. Choosing which ones to dedicate your time, emotion, and money toward is going to come down to your money story. People tend to engage more deeply in philanthropy when they’re both knowledgeable and connected to the cause.

So, it stands to reason that you’ll be most helpful to organizations that meet those requirements. You’ll need to understand how different organizations operate to achieve this. Find ways to engage with them and come to each conversation curious.

Ask their representatives and volunteers questions to see if they align with your desire for change. This includes queries about their current and future plans. If the cause doesn’t ignite your passion then keep searching for one that does. This will enable you to throw yourself into it more completely.

Understand that meaningful philanthropy isn’t about how big of a check you can write. If you’re not engaging on an emotional level, then whatever you do will feel empty and unfulfilling.

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Harnessing Our Inner Bag Lady

Bag lady syndrome refers to a woman’s fear that, at any point, she’ll be thrown to the streets and have to carry her possessions in a shopping bag. These uncertainties manifest in men as well, however, the trend is more prevalent in women given our lower pay and the pressure on us to leave the workforce.

There are times when this concern comes over me and takes a place in my decision-making. This isn’t all bad. While you shouldn’t let your bag lady syndrome take full control; there are benefits to listening to it every once in a while.

Rather than giving in to the fear, channel it to develop responsible habits in managing and reviewing budgets. Use your concern to motivate you into taking a more active role in your investments and build up reliable safety nets. It can even add a sense of fulfillment when you take it into account.

After all, your bag lady syndrome is part of your money story too. And like with all parts of that story, you gain positive feedback by aligning your financial habits with it. Every time you come under budget will feel that much better.

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How to Understand My Money Story

Our money story is defined by all the lessons we’ve learned in our life. Financial or otherwise. It’s the reason that some of us are frugal while others derive joy from frequent spending.

Money stories are a form of emotional expression and understanding them is crucial to making fulfilling money decisions. I work with clients to uncover their money stories and learn how to set goals with their value systems in mind.

Through my workshops and seminars, we hone in on the explicit and implicit messages you’ve been exposed to. Obvious examples include whether you grew up in luxury or watched a family member ruin their life through irresponsible spending. We take these messages and figure out how they have shaped your current habits. This helps you create plans that remove negative feelings about your money and start to use it in a uniquely meaningful manner.  

My own money story stems from the tumultuous marriage between my refugee father and depression-era mother. After which my mother was forced to drastically alter her lifestyle. It made me develop a hyper-awareness of any risks a venture might have.

Taking an objective viewpoint is vital in uncovering your money story. We all know how easy it is to lie to ourselves about our past. Discussing your background with a professional or [the right] friend will help you immensely.

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Healthily Reflecting on Our Financial Habits

It’s always a good time to look back and evaluate how you’re using your money. It gives you more relevant insight for determining what goals to set moving forward and if your recent choices reflect your money story.

I’ve worked with clients who beat themselves up over failing to stick to their budgets. They restrict themselves in January about how much they’re allowed to spend in December. That’s a little crazy if you think about it. Our circumstances and values can shift dramatically in brief periods of time.

Think about why you went over budget. Did you travel to spend more time with close family or friends? Were you investing more into hobbies that bring you long-term joy? Was there a charity or local project that you contributed to? If your choice of exceeding your budget brings you comparable fulfillment, then maybe it’s your budget that needs to be reevaluated.

Reconstruct your budget with your money story as the central theme. Think about your value hierarchy and make reasonable trade-offs to better match it. This process by itself can help reconcile the nervousness you feel about going over budget since it justifies how you’re directing your funds. Within reason.

If you need help navigating your thoughts and emotions around an important financial decision, you can contact me here or check out some of my online resources.