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Writing A New Chapter

Writing A New Chapter

Losing a loved one is not easy. While you’re still trying to cope with the emotional stress, financial stress takes over. Your responsibilities multiply and inflows reduce. As things change and you recalibrate your bearings, you have to revisit your finances.

Starting this different chapter in your life can be tough but if you’ve got some help and guidance you can sail through. Here’s some advice from a financial expert, Deepali Sen on how you can get started.


Your portfolio is a reflection of your lifestyle, your cash flow and your goals – it should never be rigid. For example, your husband’s investments may be too high-risk or too low-risk to work for you and your family, given your current situation; so it’s necessary to review them with an unbiased financial advisor and take action accordingly.

Your goal right now is to expose yourself to a reasonable degree of risk, without which it’s impossible to create wealth that will beat growing inflation and taxes. We’re not saying that you must wind up all your husband’s investments, we’re just saying that now that your life looks different, your portfolio should as well. Sticking to investments from the past might hurt you.

“Kathleen Rehl (CFP, financial advisor & author) had a client in her 70s who had more than 90% of her investments in stocks of risky companies, so Rehl worked with her to make her investments better suited to her age and lifestyle. When it came to actually selling the old investments, the client panicked. She thought that by replacing these stocks with a more appropriate portfolio she was betraying her late husband’s wishes. After much hand-holding, the client listened to Rehl’s advice and thank god for that because this was the year before the 2007 crisis. Eventually, the client realised that revising her investments was the right way to go.”


On a simple Excel sheet, list these details of yourself, of your dependents and even of your late husband:

Expenses & Incomes – Both monthly and annual. Divvy these expenses up into ‘Essential’ and ‘Avoidable’, ‘Fixed’ and ‘Arbitrary’

Assets & Liabilities – All financial assets (from Fixed Deposits to Mutual Funds), personal assets (from cars to paintings) and real-estate assets (from your home to owned land). Jot down the loans attached to these assets and any other loans that need to be repaid.

This will help you decide your plan of action, and what you should do next.


Now that you’re going from 2 to 1, you might have to cut corners wherever you can until you settle down financially. This means no more impulse purchases, staying disciplined with your spending, maybe even downloading a budgeting app to see where you can cut corners. If you have kids, now’s a good time to teach them the importance of saving and spending frugally. Have an honest conversation with them, no matter how old they are.

“Money is hard to earn and easy to lose; guard yours with care.”
Brian Tracy, author of ‘All Is Not Lost’


When it comes to your immediate big spends, don’t opt for something that sounds attractive just because your banker suggests it. You need insurance money to protect your children if you’re not around, and for that, a good Term Insurance Plan is ample.

The biggest mistake you could make at this point is comparing insurance returns with investments and mixing the two through vehicles like ULIPs (Unit Linked Insurance Plan). The truth is that ULIPs have a high expense ratio (fee you pay a company for managing your money) unlike Mutual Funds, so they might not give good returns.

Having said this, life insurance is important but not essential for all. If you have no dependents, it would be a waste for you to buy life insurance. You’d rather put that money in health insurance instead. If you’ve got old parents, get health insurance for them too.


You will need an Emergency Fund for unplanned expenses! This should be enough to meet 5-6 months of your family’s expenses, and you could probably start this fund with your late husbands’ insurance proceeds. Keep this 100% out of your sight, in a liquid or ultra-short-term Mutual Fund, or worst-case scenario in a savings bank account that you don’t use.

We understand that you might need this money for more important things right now, like paying up your husband’s debts, your kid’s education, etc. But give yourself a deadline: 6-7 months to build up this Emergency Fund. And if and when you ever dip into this fund, don’t forget to replenish it soon.


Your kids are dependent on you both emotionally and financially, and you need to be organised and strategic about making things happen. List down your goals, both critical (kid’s education) and feel-good ones (a month-long holiday)! Write down an amount you need for them and the year you want to achieve them in.

Now it’s time for some realistic modifications. For instance, if you and your husband had planned on sending your children abroad to study but can no longer afford that on a single income, you might need to settle on a local education. There will be many such compromises that are hard to make, but you will need to be strong and take tough decisions.


Now that you’ve planned for your new future, pick investments that align with your goals. Divvy these goals up into short (0 to 2 years), medium (2 to 7 years) and long (7+ years) term goals.

For short-term goals: Short and ultra-short debt mutual funds

For medium-term goals: Medium-term debt mutual funds or balanced mutual funds

For long-term goals: Well-managed and diversified equity mutual funds


Sometimes the investments you’ve made might not be enough. What do you do then? You can borrow money to make up for the shortfall, but don’t get yourself in a debt trap. Follow the 35% EMI Rule (i.e. monthly EMI’s should never be more than 35% of your monthly income) and borrow money only if you really, really have to.

And don’t ever make the mistake of borrowing a personal loan for a car, a vacation, etc. Interest rates on these are exorbitant so you’d rather invest for things like these and borrow loans to meet important goals, like buying a home or paying for kids education. For goals like these, borrowing a loan might even make sense because they come with tax benefits.


In addition to retirement planning and planning for your children’s needs, please keep aside some money for yourself; to go on a vacation, take a sabbatical, start an enterprise or, further your education or learning. Of course, make sure you prioritise between your key goals and ‘nice to have’ goals depending on the inheritance amount but once in a way splurge on yourself and reward yourself for all the hard work.


You can’t live forever on the insurance and inheritance money that your husband left behind. At some point (sooner than you realize) this will get depleted. So find yourself a job, or work part-time for a steady income source. If you don’t have certain skills for a particular job, go learn them. Use inherited money to invest in yourself because you’re your kid’s only asset.


Last but not the least, after all the steps you’ve taken to plan your financial goals, ensure that all your financial accounts (bank accounts, investments, insurance accounts, mutual funds, and Demat accounts) have proper nominations in place so your children don’t have to go through the pains you went through to inherit their share.

Wealth transfer 

  • Ready your Will with legal and professional help. Register it.
  • Make an exhaustive list of your assets and assign it to your heirs.
  • Make provisions for liabilities as well and how they should be settled when you’re gone.
  • Decide upon an executioner of your will and guardian for the minors, if any.


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An MBA in Finance, a CFP and a writer, Deepali has had over 2 decades of experience in financial planning and wealth management. She has previously worked with ICICI Prudential AMC, Franklin Templeton Investments and Axis Bank AMC. Deepali now runs her own financial advisory company called Srujan Financial Advisors LLP and always handholds and guides her clients in making tough financial decisions.

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