Trilogy Financial, a privately-held financial planning firm with more than $2 billion in client assets, utilizes a combination of our latest technology and broad perspective to help you advance your tomorrows.

How to Prepare for a Financial Setback

January 10, 2017

A financial setback can have different meanings among different people. How would you handle yours?

A financial setback can have different meanings among different people.  Some may define it as a stock market crash.  Others may define it as depleting their non-retirement accounts because their emergency fund wasn’t enough to cover unforeseen or unplanned expenses.  I define a financial setback as one where the financial lead-person in the household dies, putting the surviving spouse in a stressful period with newly added financial responsibilities which he/she may not be ready to take on during his/her time of grief.

It’s very easy for families to get to this point.  Whether we’re busy with our jobs, raising kids, our social lives, or all of the above; at one point in time, we delegate roles and responsibilities in our households.  Once these roles are established, we get into a routine and very rarely do we break them by choice, because it’s easier to complete our tasks with a system in place.  While it’s ok to delegate these responsibilities with simple tasks such as doing the dishes or taking out the trash, it’s not as ideal to do so with the household finances. 

Imagine this.  Your spouse has taken the responsibility of being the financial lead-person in the family.  In doing so, he/she is in charge of paying all the bills on time, designates how much money can be spent on various categories within your budget, and files all of the financial documents away.  When he/she takes care of these things, are you actively involved in the process?  Unfortunately, the answer is usually “no.”  In some cases, you may be passively involved whereby your spouse shows you a spreadsheet of the budget and tells you that they are paying the bills, but in most cases, while your spouse is taking care of the finances, you are probably distracted in taking care of the kids.  This system may work while everyone has the ability to accomplish their tasks, but if your spouse were to die or become incapacitated, would you really know where to find that spreadsheet of the budget?  Would you know when to pay the bills?  Even if you did know when to pay the bills, an increasingly more important question nowadays is do you know the username and passwords for each account so that you have access to them?

How can we prepare ourselves for such a setback, especially given the fact that we won’t live forever?

  1. The financial lead-person should make a list of all accounts which money is to be paid to/invested each month.   On this list, the lead-person will want to make a note of what day of the month that particular account is usually paid (e.g. the water bill is usually paid on the 17th of the month).

  2. The financial lead-person should create and maintain a list of usernames and passwords related to each financial account, e.g., credit card, utility bill, investment accounts.  This list should be printed on a piece of paper and filed somewhere with your other documents. 

  3. The financial lead-person should make sure that a copy of the budget is easily accessible to his/her spouse.

  4. The financial lead-person should make a comprehensive list that documents all investment accounts, life insurance policies, and contact information for financial professionals, e.g., financial advisor, tax professional, estate attorney, so that his/her spouse doesn’t need to frantically search for this information in the event of death or incapacity.
    • Note that if you are an existing Trilogy client, this task was already accomplished in your first meeting.

  5. Make an appointment (or even a date night) with your spouse to walk through the responsibilities of the financial lead-person.  At this time, the financial lead-person should:
    • Review the list mentioned in #1 with his/her spouse, so that the monthly cash outflows are known.
    • Make sure that his/her spouse knows where all of the aforementioned lists can be found, e.g., usernames and passwords, copy of the budget, etc.
    • Walk his/her spouse through his/her filing methodology of investment accounts, life insurance policies, etc.  While this may sound like a simple task, it can be frightening to the other spouse if he/she has never looked at how things are organized.  Doing so allows him/her to ask questions now while the financial-lead person is able to answer them.
Setbacks can create chaos in our lives and break us away from the routines to which we’ve become accustomed.  While you may not look forward to the additional work necessary to prepare for a financial one, the time you put in can ease the stress to your loved ones and give you the confidence that your family is taking one step closer towards financial success.

The opinions voiced in this article are for general information only. They are not intended to provide specific advice or recommendations for any individual and do not constitute an endorsement by NPC. To determine which investments may be appropriate for you, consult with your financial professional. Please remember that investment decisions should be based on an individual's goals, time horizon, and tolerance for risk. NPC does not render legal advice.

user profile

Written by: Mike Loo

With over 20 years of experience in the financial services industry, Mike Loo has spent the majority of his time committed to learning all aspects of financial, tax, and estate planning, especially in the areas of wealth accumulation, distribution strategies and wealth transfer strategies.  In this very competitive industry, Mike helps clients understand that all financial areas are equally important to reaching their goals.  He believes in a complete overview approach for all of his clients.

Connect with me on social media!

Blog Archive

Follow Us on the Web



All information herein has been prepared solely for informational purposes and is not an offer to buy, sell or a solicitation of an offer to buy or sell any security or instrument or to participate in any particular trading strategy. Advisory services provided by TrilogyCapital, Inc, a Registered Investment Adviser. Separate advisory and securities services may be provided by National Planning Corporation (NPC), a SEC Registered Investment Adviser and broker-dealer. Member FINRA and SIPC. Certain registered representative with NPC are doing business under the name of Trilogy Financial. TrilogyCapital, Inc. and Trilogy Financial are affiliated by common ownership and are separate and unrelated to NPC. Please consult with your representative to confirm, on which company's behalf services are being provided. Registered Representatives of NPC may transact securities business in a particular state only if first registered, excluded or exempted from Broker-Dealer, agent or Investment Adviser Representative requirements. In addition, follow-up conversations or meetings with individuals in a particular state that involve either the effecting or attempting to affect transactions in securities or the rendering of personalized investment advice for compensation will not be made absent compliance with state Broker-Dealer, agent or Investment Adviser Representative registration requirements or an applicable exemption or exclusion. Content is for general purposes only and is not an offer to buy or sell any security. NPC does not provide tax or legal advice.NPC Privacy Policy.