FOLLOWING MY husband’s death, I went from feeling prosperous to precarious in the space of a few short months. For decades, I’d had something extra in hand, beyond the minimum sum necessary to keep going. That sense of prosperity was now gone.
This wasn’t just my imagination. Studies have found that widows are significantly less wealthy than their married counterparts. One academic article notes, “The death of a spouse is an event that may precipitate a large decline in wealth.” Similarly, a National Bureau of Economic Research study found that, “The death of the husband very often induces the poverty of the surviving spouse, even though the married couple was not poor.”
For me, a decline in wealth might have been fine if our life had been just the two of us. After all, my husband would no longer be spending the money that he would no longer receive. Problem is, I have three children who are not yet grown, and everything else that goes along with a family of four.
Though we never expected nor precisely planned for an untimely end, it turns out that our work-life choices and hopes for retirement had created a financial buffer. We had saved a higher percentage of our earnings than many others and had done so for decades. Still, since my husband’s death, I have been anxious to avoid a steady decline in our family’s nest egg.
To that end, I’ve adopted a strategy for ongoing spending that I borrowed from a health care manual: “To lose weight, eat half what you now eat.” We all know how hard it is to slim down by merely consuming a little less. Our brains and bodies outsmart our best intentions. It seems that, if we want to shed pounds, we have to set far more radical goals. We’ll likely end up falling short—but falling short means we still make progress.
Cutting the family budget triggers the same psychological response and comes with the same pitfalls. While I haven’t figured out when or whether it might be necessary to reduce our family’s expenditures by half, it’s been a useful exercise to determine what would have to change for us to hit that target. I am reducing spending gradually as I see opportunities. For now, I want to limit the cuts to those things that are least visible to the children, so as not to disturb them. Still, sensible reductions will protect the nest egg that my husband and I worked so hard to accumulate.
Here are four suggestions for others who find themselves in a similar situation:
Catherine Horiuchi recently retired from the University of San Francisco’s School of Management, where she was an associate professor teaching graduate courses in public policy, public finance and government technology. This is the sixth article in a series. Catherine’s five earlier articles were At the End, The Aftermath, When It Rains, Muddling Through and Missing a Step.