Make Careful Decisions Until Grief Eases

Anna's friend received $70,000 in life insurance through her job, and Anna wants to help her figure out what to do with the money. Does she advise her to pay off the debt or make minimum payments?

QUESTION: Anna in Tampa is calling on behalf of her best friend who recently lost her husband due to brain cancer. Her friend received $70,000 in life insurance through her job, and Anna wants to help her figure out what to do with the money. Does she advise her to pay off the debt or make minimum payments? Dave thinks either is okay and explains.

ANSWER: Either option is obviously okay. The reason I lean toward doing nothing is if you leave her alone with a paid-for van and she decides to medicate her grief with a new car one day—six months from now—you’re going to walk over there and see a new car sitting in her driveway with payments on it. You’ve got to know—and you know her pretty well—her level of stability in this grieving process.

I have worked with hundreds of widows and widowers over the years, and grief is a screwy thing with what it does to otherwise sane human beings. You’ve just got to be careful with that. It’s logical to pay off the van and pay off the credit card as long as that doesn’t trigger something in her that makes it okay to go do something stupid four months from now.

Set $8,000 or $10,000 aside to cover her subsidizing her shortfall. Pay off the van and the credit card and then lock the rest of it down in a CD and make it a little bit painful to get to. Then lock her in a bear hug and walk with her this year. She’s going to need that.

I don’t want her to be scared or terrified in the middle of her grief, but I also don’t want her to have this sense that she hit the lotto. Just be very careful.

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