Death and Finances: What to Do After A Loved One Passes

Mindy:
Hi there. Before we get into today’s show, I wanted to give a trigger warning. Today, I’m talking to a woman who lost her spouse unexpectedly at a young age, and how she dealt with the aftermath of this sudden event. We are also talking about how you can prepare now in case this happens to you. Welcome to the BiggerPockets Money podcast show number 265, where I talk to Allison Nichol Longtin about handling the unexpected death of your spouse.

Allison:
It’s avoidant. And it’s a lot of what many of us go through. We don’t want to think those thoughts. We don’t want to follow those thoughts through, so we don’t do it. We put it off, we put it off, we put it off. And I think that that’s a very human response. And I think it’s sort of a byproduct of the many things in life that we don’t like to talk about. And you’ve got two of them there. People don’t like to talk about death and people don’t like to talk about money.

Mindy:
Hello, hello, hello. My name is Mindy Jensen, and I’m here to make financial independence less scary. Less just for somebody else, to introduce you to every money story, because I truly believe financial freedom is attainable for everyone, no matter when or where you’re starting. Whether you want to retire early and travel the world, go on to make big time investments in assets like real estate, or start your own business, we’ll help you reach your financial goals and get money out of the way so you can launch yourself towards your dreams.
Allison Nichol Longtin was married for six years, and her husband handled all of their finances. Until his early unexpected death left her with a broken heart, a mountain of paperwork, and forced her to deal not only with her past money issues, but also figure out her current financial situation. Something that could have been made much easier if they had only talked about it while he had still been alive. Allison has learned a lot since his passing, which is why she’s here today. I read Allison’s first article for Business Insider, which was published right after a friend of mine passed away suddenly in a freak accident. He and his wife had an eerily similar situation to Allison and her husband where he handled all their finances. Not only that, but it’s confession time.
While I sit here every day talking about money, in my own life., my husband has traditionally handled all of our finances. We talk about them. We have discussions about where we should invest our money. I know approximately where the money is, and I have a pretty good idea of the amount of our net worth. But if he were to pass suddenly, I too would be left with a broken heart and a mountain of paperwork to wade through. So I reached out to Allison and asked her if she’d take the lessons she learned as she waded through her paperwork mountains and share them with us to help our listeners through their own financial walkthroughs so if an unexpected death happens, you’ll be more prepared.
Also, I’m using us to make sure that I’ve thought of everything as I’m starting through the process of learning where all of my own personal money actually is. Allison, welcome to the BiggerPockets Money podcast.

Allison:
Thanks so much Mindy. It’s great to be here. Thank you for inviting me. I’ve long been an advocate for financial literacy and lifelong learning. So it’s really an honor to be here today to share my experience with you and with listeners.

Mindy:
I really appreciate that you have been sharing your experiences online in a series of articles for Business Insider. Listeners, you’re going to want to, is it our show notes today. That’s biggerpockets.com/moneyshow265. We have a lot of links to mention. Allison has articles that she’s written. There’s books that have been really helpful to her along her journey. And I’m sure there’s going to be a lot of other links that come up. So Allison, I’m sure after your husband passed away, there was an initial state of shock, and going through the motions of life. How long after he passed did you have to start figuring things out?

Allison:
Yeah. I mean really when I think back, it feels like almost immediately. And I think part of that is because I’ve always had this anxiety around money and finances. And what felt really top of mind while in that state of shock was I need to feel safe. And safeguarding my finances in any way that I could was a big part of that.
So I think really within the first week, I was contacting my bank, meeting with my financial plan there, and contacting CRA or Canada Revenue Agency, which is essentially the taxation body to sort of notify them of that death and make sure that any sort of automatic payments that were linked to any credit cards or to any accounts, that all of those were either stopped or transferred. I think honestly part of that was a little bit of compartmentalizing as well in that initial state of shock was okay, what can I do in this feeling of total lack of control and total lack of agency? As much as it was impossible to think that I could do those administrative tasks, they gave me something to do. They gave me something tangible to do.

Mindy:
So your first step, you said you contacted the financial planner and you contacted the Canadian agency. I’m assuming that’s similar to on the American side, getting the certification of death. The death certificate to start the process, the official process.

Allison:
So really, this was the first person that was close to me that I’d ever lost. And in any other kind of loss I’d had, I really didn’t have a lot of responsibility. And in this case, it was all on me to take care of everything. So to learn it by doing. So the death certificate really came from once sort of plans were in place for his cremation, the death certificate was taken care of by essentially the funeral home that took care of that cremation process.
And that death certificate was needed for essentially everything that followed, especially because we didn’t have a will. So my husband died without a will. And that was in part because he was 37 and apparently healthy. And I at the time was 31. We didn’t think we needed to think about that just yet. So I really had to rely on all of the other pieces of evidence that we were married and so on. So in terms of reaching out to Canada’s taxation body, that was something that I learned needed to be done right away. So that was one of the top things on my list.

Mindy:
Okay. So it sounds like step number one for anybody who’s listening like me, who hasn’t really done anything is creating a will. This can seem at age 31 where you’re young and healthy and your husband is young and healthy, this can seem kind of morbid.

Allison:
Yeah, absolutely. And I hear that. I do get that. And four and a half years ago before my husband died, that’s exactly what I would’ve thought as well is A, we don’t need to talk about that. And B, I don’t want to even think about that. So in all the many ways that we were excellent planners, we were excellent partners to each other. We were a really great team. We really let each other down in that sense by not wanting to sort of think about that or go there, and assuming that we had all the time in the world to do things like create a will.
So as much as most of the accounts were in both of our names and I had access to most of the passwords that I needed to, we didn’t have a will, which made everything that much more difficult and made it that much more painful to have to sit in an office or be on hold on a phone. And time and time again, have to prove that we were married.

Mindy:
Okay. You just said something else that I thought was very interesting. “Most of the accounts were in both of our names.”

Allison:
Yeah.

Mindy:
That sounds like a real treat to try and deal with when you’re trying to connect with somebody about an account that’s not in your name. So that sounds like a good step number two, which I’m getting ahead of myself because I still want to talk about step number one. But step number two is put all accounts in both names. So hold on, let me write that down. Because I’m going to create a step-by-step for this and I’m going to put that in the show notes as well. But to create a will, have you since created a will?

Allison:
You know what, it is on my list. Every year I do intention setting. It’s not so much New Year’s resolutions, but I take stock of the previous year and then I decide where I want to go in the following year. And that is on my list from 2021. So I’ve got a couple more weeks to get a will together. So I’m a little behind there. But no, I do not currently have one, which honestly I would hope that I would’ve learned from past mistakes. But I also will say it feels less pressure filled in the sense that nobody else is relying on me to have a will. Nobody else’s life will be made that much more difficult by my not having a will. Whereas that was the situation with my husband.

Mindy:
Okay. So I can hear people listening saying, “I can’t believe she hasn’t made a will.” You know what? I haven’t made a will. I have two daughters and a husband, and I have no will. And that is kind of embarrassing to say right now as I sit here in a position. I don’t have two infants. I didn’t just find two daughters yesterday. I have a 14 year old and a 12 year old. I’ve had plenty of time to do this. And it’s so easy to just not. “I’ll do it next week. I’ll do it next month.” I mean, you have to make some sort of plan with your will.
But then even thinking about it … it’s going to be a tough episode. But even thinking about it makes me think what happens. When I create a will, I’m planning on my death. I will die anyway. We all will.

Allison:
Well, I think it’s avoidant and it’s a lot of what many of us go through. We don’t want to think those thoughts. We don’t want to follow those thoughts through, so we don’t do it. We put it off, we put it off, we put it off. And I think that that’s a very human response. And I think it’s sort of a byproduct of the many things in life that we don’t like to talk about. And you’ve got two of them there. People don’t like to talk about death, and people don’t like to talk about money. And we’re on a money podcast, but people don’t like to talk … a lot of people, they’ll talk about money, but maybe not their money.

Mindy:
Yeah. I’ll talk about money all day long, but I don’t want to talk about death because death is scary and it shouldn’t be. It’s a fact of life. I am going to die. At some point between now and the next 100 years, I will pass away. I will make that bold prediction right now. And not having a will isn’t going to make that not happen. So I knew that I was going to record this episode, and I knew that we were going to talk about this. And I reached out to a sponsor of our show called trustandwill.com. And I asked them if they could give us any sort of, if they wanted to do any sort of sponsorship for this show. And they have offered a discount on their services to create their will services. The website is trustandwill.com/biggerpockets. You have absolutely no excuse. I mean, you can make lots of excuses for not doing it. But right here right now, sit down, put it in your calendar, make a plan. In January of 2022, make a plan to create your will. As detailed, as loose as you want it. But somebody is going to direct where your money goes, it might as well be you.
That’s a good advertisement. Get a will. Okay. That’s on my list of things to do. And I’m not excited about it clearly. But just, you don’t have to be excited about it. You just have to do it. My aunt’s a swimming teacher, and some of the kids are like, “I don’t want to do it.” She’s like, “You don’t have to want to do it. You just have to do it.” So okay. Step one, create a will because that will help your surviving partner walk through all of this stuff. And step two is to put all accounts in both names. For the accounts that didn’t have your name on them, what was the process of accessing them?

Allison:
Yeah, it’s a good question. A long and painful one. So the one account that we had that wasn’t in both of our names was my husband’s primary checking account. And the reason that that one wasn’t in both of our names is it was his original account from when he first opened a bank account when he was maybe 15 or 16. So that was a real oversight on our part. Otherwise, all other accounts were in both of our names. So there was no beneficiary named for that checking account quite in contrast to the rest.
So the process for that again was, is there a will? No, there’s not a will. In lack of that or in lieu, they had asked me, so the bank essentially had said, “Okay, well you need to go to a lawyer. You need to get this, this, and this.” And I said, “Well, I’m not going to pay money to get access to our money.” So I had to say this to several people and had to present many different pieces of evidence, but I was adamant. I wasn’t going to lose anything to get access to what is ours. And I felt a huge sense of responsibility to manage our funds, and his estate, and our estate well.
So essentially, they froze the account for a period of 12 months. And after that point, I had access to the funds within that account and was able to transfer them. But it was a full year before I had access to that account. And now in the grand scheme of things, that actually wasn’t so terrible because we both had a practice of maintaining only a finite sum in our checking accounts. And once we crossed a threshold of about 3,000, that money came out of there and went into either investments or savings. So there wasn’t a ton in that account to begin with. So it could have been a lot worse, but really every single roadblock was, “Okay, is there a will. Are you the executor of the estate?” “Okay. I’m his wife.” And then again with the marriage certificate, again with the death certificate and all the other … I literally walked around with a horrible portfolio for about seven months because I was going from meeting to meeting, and just had to pull out all sorts of pieces of ID, all sorts of proof for about seven months. And it did continue after that. I just didn’t carry around this terrible portfolio after that point.

Mindy:
So imagine if you weren’t married.

Allison:
Yeah. I think about this often. We’d been together for five years before the time we got married. So we had a solid foundation, and we weren’t a hugely romantic couple. It really was a conversation of we were living abroad at the time, and really everything was going to be made easier and more stable for us if we decided to get married and we were happy together. So we did decide to get married. And I honestly can’t imagine if we hadn’t been married, what this process would’ve been like. I know we likely would’ve applied for common law status. But yeah, to your point, if we hadn’t been married, this could have been a lot more difficult for sure.

Mindy:
And this isn’t a, “Everybody should get married,” comment. This is just another thing to consider. If you are combining finances together with someone and you’re not married, there are more things to think about than just who’s paying for the mortgage and who’s paying for other things.

Allison:
And I think it’s about educating yourself, regardless of what status you have with your partner, with your person, educating yourself about, “Okay, what are my legal rights? What happens if and when?” And I think that if we had been let’s say common law and we had a will that clearly laid everything out, it probably wouldn’t have been as difficult as it was. But I think that again, asking the questions or having those hard conversations that really, nobody wants to think about these things. But we have to. Mindy, did you want to talk about the other account that wasn’t in both of our names?

Mindy:
I do, but I want to make one more point. Because your name wasn’t on his account, but you also had your own account. I just want to highlight that you didn’t have all your money in one account that was only in his name. And that was really a good plan on your part. And I want to applaud you on that. If you have all of your money in one account, both of your names should be on the account for sure. Because then you can at least access it. But if all of your money is in one account and your name’s not on it, that’s a sign that something needs to change.

Allison:
Absolutely. I would never recommend that anyone have just one account in any case. And we can talk about that a little bit later. It’s one of the things that I’ve learned in this journey of really educating myself on money management. But yes, luckily both of us had a few different accounts. So again luckily, it was only that one account where we weren’t both named.

Mindy:
I want to talk about this other account that your name wasn’t on. What is this fun account?

Allison:
Yeah, so this was probably the most challenging part of dealing with the administrative side of our finances related to [Remi’s 00:19:00] death, which was that he was learning how to actively invest. So we had one investment that was essentially a fairly high risk investment. So my husband had been a scientist and was just really brilliant with any kind of numbers and any kind of experiments. So he had decided to put a portion of his investments, so we’d sort of divided up our investments in placed them in different places. And I have a very low tolerance to risk when it comes to my money. And he wanted to play around with some of these funds. And we talked about it, and he decided to actively manage those investments. So they were on the stock markets. He was checking them a couple of different times a day. He was doing all sorts of research into what funds he could be putting that money into, and was actively moving stuff around on a daily basis. Because it was such a risky fund.
So the idea was high risk, high reward. And he was looking at it every day. And I knew that there was this investment, and I knew that there was a sizable portion of our money in there. So when he died, that was near the top of my list. After notifying the bank, after notifying taxation bodies, governmental bodies, was I needed to get these funds off the market. Because I didn’t have access to managing them actively. So they were essentially left on the market to do whatever the market was going to do. And we lost thousands in a very short period of time.
And thousands to some listeners may not sound like a lot. But to me, that felt huge and it felt like I’d failed him, because I didn’t have access to those funds. So we didn’t have the foresight to think what do we do about that if something happens, if you can’t … and maybe even if he’d just gotten sick and couldn’t manage them for a couple of days. A couple of days is the difference between 20,000 and potentially 10,000. So that was one of the first things on my list. And unfortunately, because we didn’t have a will, we were caught up in lots of red tape for several weeks. And it sounded like there was nothing I could do about that. That’s what I was told.
So by the time we finally pulled those funds from the market, because I didn’t have the know how, I didn’t have the capacity. And I honestly didn’t have the interest to actively manage some risky funds. So we pulled those, by we I mean my bank and I, we finally pulled those funds from the market. But we lost thousands. And like I said, I felt like I’d failed him. And it was just a very anxiety, high anxiety situation knowing that I didn’t even see what those funds were doing. I couldn’t see how much we were losing.
So A, I would really caution people to consider what are the rules around those funds? If you decide to actively monitor your investments, who then can have access to those if something happens to you or if you can’t monitor them actively? And then B, is that something you should be doing in a partnership? If one person in the partnership just would not be able to manage those funds. So I just felt at a total loss for what to do about these funds.

Mindy:
Yeah. I think this is a really good point. Just in general, if one of you is managing the investments, the other one, you should set up an investment money date. And I say this you like I’m doing this now. I’m not. I don’t know how to log into our accounts right now. And this is something that we have in the books. We are sitting down and he’s going to show me how to log into all of these accounts. Because it is his passion. He loves to look at all of this stuff. He goes online every morning and looks at it. Literally every morning, he looks at all this stuff. I am a set it and forget it kind of person. I like to know that it’s there. I don’t want to look at it every day. I have other things to do.
But I need to know how to log in. And as we were talking about this, because your first article spawned a huge conversation with us. And he said, “Well, some of these accounts are real easy. You just go online and log in, and it’s just a username and password.” Which seems rather insecure. And some of them are two factor authentication, meaning it pings a little code on your phone. And some of them, one of them, he’s got some code on his phone that’s constantly changing every 30 seconds. So it’s some hypersensitive thing. That’s great if he’s, I don’t know how to say this without being super, super morbid.
But if he passes away locally, then maybe I still have access to his phone. But if he’s in a plane accident, I might not ever have access to his phone, how do I get that? I need to have that on my own phone too. And I don’t know how to say that without being awful, so apologies for really screwing that up. But you need to have these things on your phone and you need to be able to … or however you are supposed to access all of these accounts. And your name has to be on it. You need to log in. That’s going to be step three is learn how to log into each account.

Allison:
Yeah, I think access is important there. Whether it’s logging into an account or understanding how you then gain access to those accounts or to those funds, I think that’s key.

Mindy:
Understand how each account works. How do I pull those funds out of the market? How do I transfer them? He wants to invest in Tesla. Great. That’s my husband’s darling little account, but maybe I don’t want to invest in Tesla, or maybe I want to continue. I need to know how that account works. And each one’s different. Of course, there’s no one-size-fits-all to all of these. So learning how to log in.
And this is not going to be a five minute project. This is not something that you’re just going to sit down and, “Hey, here’s all of my information.” Now you have it too. This is process you’re going to need to bookmark every Friday for a month, or this is going to be a long discussion. And it should be a long discussion. This is your financial future, and you need to do this right. Okay. Back to that comment, never only have one account.

Allison:
Yeah. So this is something that, we’d already had this in place, my husband and I. We had a couple of different accounts. But for me at least, there wasn’t sort of any real strategy behind having those different accounts. It really was about five months after my husband’s death that I started seeing an independent financial advisor. So this is someone that’s not associated with any of the big banks. And the reason behind that was I really was looking for unbiased advice. So I was looking for someone to not necessarily sell me on any product at my bank or at another bank, but really to look holistically at what we already had in place, and really figure out a strategy that worked for this new life. This new life I never really asked for, where I needed to figure out on my now single salary how much of the life I was living before was still feasible, and where I needed to make real change.
So one of the sort of key takeaways from this strategy that was developed in partnership with my financial advisor was having multiple different accounts for very different purposes. So really clearly earmarked.
So essentially, the basic structure is having one checking account where the funds, whatever income you make comes into that checking account. And also from that checking account is where all of my bills, or almost all of my bills are paid. So those are things that are, something that is monthly. Usually predictable amounts, not always. But really having a clear sense of how much my life costs, so that that amount remains always in that checking account to pay my bills, to pay for my life.
And then, I have a couple of different savings accounts that earn the tiniest little amount, but they’re really intended to save for short-term savings, and then others that are more longer term savings. So a short-term savings for example could be home repairs. So I bought my first home a little over a year ago. So I have auto transfers out of that checking account in amounts that I know are feasible and that won’t put a dent in or effect any of my bills that need to get paid. So there’s that savings account. And then there’s more longer term savings accounts.
Then finally there’s a fund fund, which essentially is money that I get to spend. So now that I have my own business and I work freelance, that money does fluctuate from month to month. Whereas when I made these changes at that five month mark after my husband died, I was salaried. So I had the same amount coming in every month. So I knew how much that fund fund held.
And really what this does is it takes a lot of the guesswork out of managing my money. And it means that I will always have enough money to pay my bills. And I don’t have to wonder, “Can I go out for dinner with friends tonight? Or can I afford to,” I don’t know, “Buy that Christmas present for that person that’s maybe a little more extravagant.” So taking that guesswork out is directly related to my levels of anxiety around managing my money. So if I don’t have to think or worry about it, I see those numbers there. I see those dollar figures. I know how much I can spend.
So whereas previously, there wasn’t a clear strategy to having those multiple accounts, although it was positive that I had them. Now I have a very clear strategy in place for those different accounts. And it has reduced my anxiety around managing money by just so much.

Mindy:
I love that. Anything you can do to reduce your anxiety is the key. And I say this all the time. Personal finance is personal. The only person that this has to work for is you. And there are some people who are like, “I could do it all in one account.” Great. That’s good for you. There are other people like Tony Robinson, the host of the Real Estate Rookie podcast has something like, I think he has 24 bank accounts. I don’t know that I would be able to keep up with 24 bank accounts. But it doesn’t have to work for me. It only has to work for Tony and his wife. And it does. So you just have to figure out what works for you. I like this. You’ve got it looks like what, four? The main bank account, the short term, the long term, the fund fund. Those seem manageable. I’m assuming that all of your accounts are in the same bank.

Allison:
So they in fact are not. Most of them are. Most of them are. But I do keep my home renovations savings fund with a different bank. And that is, can I name them Mindy?

Mindy:
Sure, if you want to.

Allison:
So I keep some of investments and I keep that particular home renovations fund with Wealthsimple. And that’s not a brick and mortar bank. It’s not one of the bigger banks in Canada. But they make banking really simple. Wealth simple. And what that facilitates as well is that I don’t have to see those accounts every time I log into my online banking. So sort of out of sight, out of mind, but taken care of. And that for me is another huge takeaway because when I was seeing all of my accounts, all of my investments on the same dashboard, when I just would go in to send an e-transfer for example, that was super stressful for me. To see my long-term investments fluctuating on the market was not healthy for me, especially since those are ones that are meant to be left there in the market or on the market so that they can fluctuate and recover. Moving those longer term investments over to Wealthsimple, where I’d have to separately log, which I do about once a quarter or if I’m going to make changes to them. Out of sight, out of mind, but safe.
So I do get monthly emails where I can see my statements if I want to. But for the most part for me, it’s healthier for me to not see those. I know that the money is being auto transferred into them. So I have a bit of a sense of where I’m at, how much money is in them. But I don’t have to look at them. I don’t need to keep an eye on them. It won’t help anything for me to be constantly checking them.
So I do really like the structure where I have my main bank. It’s a brick and mortar bank. It’s a real thing that exists. And I can go talk to the branch manager if I want and need to. But then I have this online Wealthsimple, where I have a few different investments there. They’re mainly the longer term ones. And then I have my home renovations where I don’t want to touch it. I just want to put money in it. And than when I need it, I can access it. But that feels very hands off and really healthy for me.

Mindy:
And that’s perfect. Like I said, you’re the only one that has to work for. And that works for you. And this is why we have this show, to highlight what other people are doing with their money. Because I know somebody’s listening and saying, “Allison’s system makes so much sense to me. I’m going to do that too.” And that’s why you’re here. That’s not the only reason why you’re here. So you said that for about seven months, you carried along this portfolio of information to kind of prove your relationship with Remi.

Allison:
Yes.

Mindy:
How long did it take to finally sort everything out? And how long do you think it would have taken had you had a will and access to all of the accounts and everything?

Allison:
Yeah. No, it’s a good question. It took a little over a year. It took a little over a year, and that’s without having a will. So one of the final pieces was that checking account that was frozen for a year. So that took a full 12 months to sort out. So it was about a year. Had we had a will, it probably would’ve been handled in about six months, give or take. Things that sort of had to go through governmental bodies like taxes, that took longer. And of course, the first tax filing season which was about the 10 month mark after his death, that was a very big tax season for me. And unfortunately, I’ve learned that widows and widowers are essentially flagged by tax bodies, because the situation is complex. So I’m very grateful that my husband and I had already been working with an accountant that we trusted. So I was able to work with them. They understood the situation. They were very capable. It was a complex tax filing, and it continues to be. But I wouldn’t have tried doing that myself.
So really, it was about a year. That first tax season was a big one. But one thing that I’ll mention as well is Remi and I lived abroad for six years. So we lived in Switzerland. So a lot of our financial situation was made a lot more complicated by having lived abroad. So things like pension that the government pays to survive, they call it the survivor’s benefit essentially here in Canada. There was a period of time that I wasn’t eligible for that because we’d lived abroad. However, I was eligible for that in Switzerland. And most unfortunately because Remi died before I turned 35, which I now am 35, I do not have access to those essentially survivor’s benefits that he had paid into through his work. Because that’s just the law in Switzerland. So that, I only received confirmation of about six months ago. So really, the administration of his death continued until about six months ago. And I tried to fight the decision, but in the end, I will never have access to those funds.
And it’s been really painful to continually have to bring this up in that sort of administrative context, and then to ultimately not have access to what is rightfully ours. So that’s been particularly difficult. But I about six months ago was able to sort of administratively at least close the file, which feels very bittersweet. I think there was a time where it felt like a thing I could still do for him and for our couple, for our partnership. Whereas now, that’s mostly settled at least on an administrative side.

Mindy:
Yeah. I just don’t even know what to say about that. It just seems like there’s all this … at some point there’s nothing you can plan for. You can plan for so much. And then at the end, there’s just this random stuff that’s going to happen. So take the time now to plan for the things that you can handle, because there’s always going to be this opportunity to have this, “Hey, what’s going to happen?” Stuff to figure out at the end. And that’s really disappointing that the government doesn’t allow you these benefits until age 35.

Allison:
Yeah. I’ve been penalized. As if it wasn’t a nightmare enough, I’ve been penalized for my husband dying at such a young age. Not only his young age, but mine.

Mindy:
And would it have made any difference if there were children involved?

Allison:
Yes.

Mindy:
Okay. So you’re penalized-

Allison:
And again, further being penalized for never having had children with my husband.

Mindy:
Yeah. That just seems like boy, kick you when you down.

Allison:
It’s extremely cruel and it’s something that I’ve petitioned. And I am letting go actively. It’s a process.

Mindy:
Well, I’m sorry. That stinks. Okay. So the original article that I discovered you was talking about money anxiety. You had money anxiety in the past, which led to your hands-off approach to money. What were these money anxieties and how did this experience exacerbate those fears?

Allison:
Yeah. I think really, I had sort of adopted or developed these really avoidant behaviors when it came to money. So I didn’t want to think about it. I resented the fact of money. I’ve always been a person that works really hard. But I’ve often worked in fields where I’m not let’s say fairly compensated, and that’s just the nature of the fields. I worked in the arts and then I worked in the nonprofit sector. Which you can be very fairly compensated in the nonprofit sector, but not always. So I’ve always worked really hard.
And I think sort of resenting money and the fact of having to deal with it and handle it made me just further avoidant. But being avoidant just increased my anxiety, because I wasn’t actually taking control of what I did have or creating a plan for, “Okay. Well no, I can empower myself to decide how much do I need to or want to make? How can I go about making that happen for myself?” Instead, I just said, “Nope, don’t want to think about it.” And just stressed, and stressed, and stressed internally, and didn’t do anything about it.
And especially because Remi was so good at managing his money and our money, I trusted him fully. And I don’t regret having trusted him. He was excellent at managing our money. But I didn’t learn. I didn’t learn by saying, “Okay, you like doing this? You’re good at this? Go ahead and do that.” And I think really I for a lot of reasons came from a place of real lack as opposed to a place of abundance. And that’s really where I’m trying to shift toward now is that just because I don’t have what this person has or I have less or more than this other person, doesn’t mean I have to come from a place of lack. So I think that anxiety really came from this place of lack combined with this avoidant behavior that I had.

Mindy:
So you’ve moved from money avoidance to queen of your own domain. You wrote an article called I used to dread managing my money, but 3 simple habits helped me go from overwhelmed to owning a home and running a business. And your first habit is I have regular money dates with myself. Long-term listeners will recognize this term money date, because we push that all the time. We think that having conversations about money, being conscious about your money is the best way to be aware of your money and get on the same page as your spouse. I’m sorry, partner. It’s very difficult to know what’s going on with your finances, if you’re not thinking about them all the time. And it’s really easy to let them run away as I am showing in my own personal life if you’re not thinking about them. So what does your money date look like?

Allison:
Yeah. I mean, it definitely looks different than it used to. So what it looks like now is about once a month, usually during the first week of the next month, I will set aside a couple of hours where I’ll take essentially screenshots of the activity in my accounts. And then I have a Google Sheet that I’ve developed that tracks each account. And I will plug the numbers in to say my mortgage. When did it come out of my checking account? What was the amount? Those are sort of the more predictable expenses. And then there’ll be some where I sort of group them, like groceries and so on. So fairly simple. But I make a big pot of green tea. I get cozy. I set up a nice little space, and then I plug those numbers in.
And this has become especially important now that I work freelance, now that I have my own business. Because those numbers are fluctuating. And not only do I need to know what money is going where and how much is coming in, but I also need to project forward and see, “Okay, well where do I need to do better?” So not just sort of, can I spend less on going out, let’s say? But do I need to seek out more business to up my income?
So essentially, those money dates are a time for me to get really familiar with my financial situation in that sort of snapshot of a month, and to look back over the past few months. How’s it going? How do I want to pivot? Where am I doing well? And then I will treat myself somehow.
So it might be something really small, like cooking a nice dinner. If I had a really great month, I might go out for dinner. And that’s sort of a bit of a throwback to when I had these money dates with Remi. So we had them less often because we were both salaried individuals. So we didn’t need to track so closely how much was coming in, how much was going out. But essentially, we would about once a quarter, so once every three months, we would have a money date where I would sit there hating every minute of it. And he would sit in front of the computer. I was right beside him, and he would plug things in into the spreadsheet that he’d created. And then we would either cook a nice meal together or go out for dinner. And usually, we’d pour a glass of wine to help this go a little bit more smoothly.
But I’m a big believer in these money dates. And I shared in that article that for a long time, I didn’t do these. I stopped that practice because it was like many other things, just too painful to think a about doing on my own after so long of having had this tradition or ritual with Remi. But it’s something that now, I know is really important. I do not dread doing it. And frankly sometimes, I actually look forward to it. In part, because I make a very nice Google Sheet. So yeah, I firmly believe in these money dates and that rewarding yourself.
It doesn’t have to be extravagant, but it’s work. It’s work to sit down and make sure that you know what’s going on. And I think we should be rewarded for that. It’s the very grown up, very responsible, empowering thing to do.

Mindy:
I love that. I believe in rewarding yourself. What is the point of living this life if you never, ever, ever, ever, ever have fun?

Allison:
Well, and you know that honestly, this may sound irresponsible. But that was one of the biggest lessons that I learned in terms of finances from Remi’s death. He was very smart about managing our finances. We had mutual accounts, but we also had separate ones. And he really didn’t spend a lot of the money that he worked so hard to earn. And I get to benefit to this day from how good he was at saving and how frugal he was. But I really wish that he had treated himself a little more. I really wish we’d taken more vacations. It doesn’t have to be extravagant. But not only in terms of I wish we’d taken more time together, but I also wish he’d enjoyed his money more, enjoyed our money more. Because we really were planning, and planning, and planning, and planning for this. Having kids, buying a house, getting a car, all of those things that were in the future for us that we thought those were givens.
And I’m not saying that he should have bought a bunch of luxury cars. But if he wanted something, I wish he would’ve just bought it, you know? So I still am careful about managing money. I’m not reckless with it, but I do spend the money that I have sometimes. I make sure that my bills are paid, I invest. But I also know that this could end any minute now. So if I want to go out and have dinner with friends because that will be enjoyable, I go do that thing.

Mindy:
Good. Good. We had an episode with Ramit Sethi a few months ago, and he is a big proponent of spending your money when you’re in a secure place. And I am trying to open up with the spending on the small things. It’s the enjoyable life experience spending, not the frivolous it doesn’t matter, mindless, stupid spending. Which I’ve also gotten really good at too and I’m trying to curb.
But the experience is I want to spend time with people. And if I’m spending time with someone, I live in a town that has a lot of little breweries. So if we go to a brewery and we sit down and have a beer, what’s the big deal buying the whole round for everybody? That’s no big deal. We’re having a nice conversation. Or you have another beer because you’re going to be there for another hour if you do. And you’re having more conversation. That’s great as opposed to, “I can’t do this. I’m not going to go out today.” I’m not going to spend the money.

Allison:
Well, and that’s it. That’s that coming from a place of lack versus coming from a place of abundance. And I think that that point you make is that if you are in a secure position and you can do that, is that extra $100 let’s say that you’re going to spend on buying the round or the next two rounds for you and your friend, the degree to which that’s going to make you feel good versus, “I’m going to put that 100 savings,” which one is going to feel better? So that’s sort of how I look at it in that we do work so hard for our money. We should get to enjoy it.

Mindy:
Yes. Yes, yes, yes, yes. I’m trying. Okay. You’ve mentioned freelance income and self-employment, which can be infrequent or less steady than a traditional W-2 job, which is what we call it in America. I’m not sure what you call it in Canada. How do you save for retirement and the future on irregular income?

Allison:
Yeah, that’s a really good question. And I feel like if we do this again in a year Mindy, I might have a good answer for you. So I don’t have a great one right now. And again, I’m maybe not the best person to ask this retirement question of, because I’m still working on shaping my mind around … and this might sound morbid. But if I don’t get there, what is that savings for? If I don’t make it to retirement, what did I put that money aside for?
So for me, I’m really trying to balance, “Okay, I’m going to put some money into that savings. And then I’m going to spend some, because I’m here now. I’m here living now, and I’m working hard for my money, and I want to spend some of it.” So, what I’ve been doing is contributing … so when I was salaried or I guess that’s that W-2 job that you were talking about, a certain portion of my income went to that retirement investment. And that was based on how much I made. That amount now is much less because I’m still in this first seven months of figuring out how much I’m actually making. So I have my date with my financial advisor in January 10th, which is when we’re going to figure this new life out. And I meet with her at least once a year, sometimes more. Like last year I bought a house. So we met a couple of times because that took a few different appointments. But really, I believe anytime you’re making a big change in your life, look back at your strategy. Does it still suit you? Does it still suit your life? And does it still suit your goals?
So my very long-winded answer to your question about saving for retirement is in part, I try to take a balanced view of thinking about, “Okay, I do need to contribute to that. But I don’t need to make that my priority. I’m 31.” Oh, sorry. I’m 35 now. Don’t forget your age. I’m 35 now. Who knows? That feels very far off. And one sort of piece of that strategy that I developed with my financial advisor is I currently live in my biggest investment.
So my house, my home that has allowed me to reduce what was my rent and now is my mortgage, I cut it in half by buying a house. So I live, yes, I live in my biggest investment. So I’m coming around to getting comfortable with the fact that this house is partially my retirement fund. So every time I pay down my mortgage, I’m contributing to that future. So even though I’m contributing a little less than I used to to that retirement fund, I live in my biggest investment.

Mindy:
So we have a strategy at BiggerPockets called house hacking, where either you have a larger house than you need and you rent out individual rooms, or you have a small multi-family property, like a duplex, or a tripex, and you rent out the other units and live in one. Your house could turn into a cash generation machine if you chose to rent out one of the bedrooms, one of the extra bedrooms, or rent out the garage to somebody who needs parking. Rent out on Airbnb. Do they have Airbnb in Canada?

Allison:
Yes. That’s my favorite way to travel.

Mindy:
So rent out that way. You could generate some or even all of your mortgage payment by renting out. And it doesn’t have to be a full-time thing. It can be like, “I’m gone this weekend. I’ll rent my house on Airbnb and pay half my mortgage.” So there are lots of ways to generate income with your home. So just something to think about.

Allison:
Absolutely. And that was one of the motivating factors behind buying my house was, “Okay, well then I have a lot of control.” And because when I travel, I do stay in Airbnbs, I’m coming around to the idea of being a host. And learned a couple tricks of the trade of having stayed in so many myself, what works, what doesn’t work. So yeah.

Mindy:
There are lots of opportunities to learn. And you can jump in and try it out. If you decide that you don’t love it, you can skip it, or only have it when you’re not there.
Allison, this has been a really, really great episode. And I feel energized and empowered to go and actually get my financial stuff in order that I should have done 20 years ago, and 14 years ago when my daughter was born, and 12 years ago when the other one was born. And actually almost 15 years ago, the first one was born. So I’ve got a date set with my husband, and we’re going to sit down and we’re going to walk through all of this. And every Friday in January, we’re going to sit down and go through this until we are done. And I thank you for writing that initial article and for your time today. Is there anything else you want to share before we move on to our famous four?

Allison:
I mean, I’m grateful for this platform Mindy. Thank you for inviting me to speak today. I just really believe in having difficult conversations. I think that we’re combining two things that many people get a little uncomfortable talking about or a lot. So one is death, and the other one is money, and managing our money.
So I think it’s sort of a double whammy in terms of people not wanting to address it or deal with it. And I really just feel strongly that we can avoid extra pain. A lot of extra pain and a lot of extra suffering by having these conversations. Because it’s not just making sure you have a will and making sure that your accounts are in both names, but it’s having a plan that you made together. Instead, I was left to sort of guess, and figure it out, and constantly prove and prove again that I’m the one that should be managing these funds.
So if we’d had that conversation, we would’ve been empowered in having made that plan together. And it would’ve been me executing that plan and knowing that that’s what he wanted and what we wanted together. So I just really advocate for those difficult conversations, and you will just feel so much better. Do it. Just do it.

Mindy:
I could not agree more. Because it doesn’t stop the inevitable from happening. The lack of a plan doesn’t prevent the inevitable from happening. It just prevents you from having the plan. Then you have to figure it out. And like you said, that’s not going to be fun. So yeah, I appreciate the advice. And I appreciate the, “I did it.” This is somebody who did it. And the voice of experience is very, very helpful. And it was your article, your original article that really was the kick in the pants that I needed to get myself moving in the right direction. Because like I just said, not having a plan isn’t going to change the inevitable.
Okay. Now we move on to our famous four. A bit of a lighter note. These are the same four questions we ask of all of our guests. Allison, what is your favorite finance book?

Allison:
My favorite finance book is Worry-Free Money by Shannon Lee Simmons. And this book, so it’s essentially, she’s the founder of the New School of Finance which is based here in Toronto, in Canada. And it really looks at the psychological aspect of money and those avoidant kinds of behaviors I mentioned earlier, and the anxiety that a lot of us hold around money and different behaviors that we have. And it breaks them down. It makes them very human, brings them down to a human level. And it provides tangible tools and strategies for how to work with … some things we can’t avoid. We have the patterns that we do, we’re going to work toward changing those. But let’s have some clear tools so that we can start to learn, start to improve.

Mindy:
That is not a book that we’ve mentioned on this show before. I’m excited to check it out.

Allison:
Great.

Mindy:
What was your biggest money mistake?

Allison:
My own biggest money mistake was I set aside, I guess this was shortly before I bought my house. I set aside about 20% of my total savings and investments. I put that into a long term, I essentially locked it away in a long term government subsidized investment that I knew wasn’t going to earn a lot of money. But I did this out of a knee-jerk fear of wanting to make sure that my money was safe. But I also knew that I was going to be buying a house. So if I could go back and do it again, I would not have locked that money away. Because honestly, I could use some of that right now with wanting to do home repairs and such. I could use that little bit of extra.
So in the grand scheme of things, it’s not a ton of money. But if you know that you’ve got big life changes that you’re planning, and that sort of sets aside those that just happen to us. But if you’re planning big life changes like buying a home or having your first child, don’t lock away money in investments where you can’t access it. So for me, these funds are inaccessible to me for another three years. And I let myself be sort of not even strong-armed, but sort of nudged into by my bank this government subsidized fund. And really the money’s safe. Great. But I could use some of that right now. And I don’t have access to it. So that is sort of really my biggest money mistake.

Mindy:
And is it a higher interest rate, or do you get some sort of benefit for having it locked away?

Allison:
There’s a tax benefit somehow in there. And it’s safe. It’s a conservative fund, or portfolio. But I just really shouldn’t have done it. There were so many other options available to me. But I really acted out of fear, and I’m paying for it now.

Mindy:
Okay. What is your best piece of advice for people who are just starting out?

Allison:
Yeah. I think if you’re just starting out, if you have the budget to find and hire a financial advisor that’s not associated with a bank, that’s the biggest recommendation that I have. For me, and that’s not to say you shouldn’t work with a financial planner or advisor that you have at your bank. If you have a strong relationship with them and you trust them, great. But I think having someone that is somehow external to your financial situation who can look at the overall arc of what it is. Not only your current situation, but of also where you want to go, the kinds of things you want to achieve. And help you strategize, create a clear strategy that you can then put things into place. That’s my biggest recommendation. I budget for it every year. And I really, greatly trust and appreciate my financial advisor at the New School of Finance. And she’s just really given me the confidence to manage my funds and has just totally empowered me to make tons of really big life changes that I think otherwise would’ve felt really daunting to me. Including buying my first house and quitting my salaried full-time permanent job, and starting my own business.

Mindy:
That’s awesome advice. And in America, you can find a fee only financial planner at the xyplanningnetwork.com. We are big fans of them here at the show. Allison, where can people find out more about you?

Allison:
Currently, the best place is through LinkedIn. So if you look for me in LinkedIn, I’m Allison Nichol Longtin. I believe I’m the only one on there. So you can find me there on LinkedIn. There’s lots of ways to message me through LinkedIn or to request to connect. Currently that’s the best way. I am working on a website. In the loveliest way possible, the last five to six months of building my own business have been so busy, that creating a website has been knocked down the list as I work on projects with clients. So hoping for that very soon.

Mindy:
Awesome. And we will include a link to all of that in our show notes, which can be found at biggerpockets.com/moneyshow265. And of course when your website is up and running, we will include a link in the show notes there as well. Allison, thank you so much for your time today. This has been a really great, really helpful show to me. And I know it’s been really helpful to a lot of our listeners. I really, really, really appreciate your time today.

Allison:
Thanks so much, Mindy. It’s been a pleasure.

Mindy:
Okay. And we’ll talk to you soon.
That was quite the episode, and it was kind of difficult for me to record. And I’ve been having a hard time coming to terms with why I was so hesitant to create a will. And what it boils down to is I don’t really want to think about not being there for my girls. And that’s the part that’s really, really scary. But not having a will doesn’t change the fact that something could happen. And my husband and I have spent all this time preparing for our financial future. And not having a will just really derails our plans should something happen to both of us at the same time. So we have sat down and made our plans to formalize our will. And we hope by the end of January, it is completed, and finished, and on its way to being part of our wishes, our package should something happen.
Another thing that is difficult is right now, we’re in this weird space where we don’t really have someone to watch our girls if something should happen to us. Our parents are both older. Our sisters are not in the position that they would really want to be suddenly a family. And it is a lot to ask somebody to take care of your children. Our kids are 14 and 12. [Claire’s 01:05:02] almost 15. So in three years, she’ll be 18. Then she has a whole lot. There’s a lot less responsibility for her, but [Daphne’s 01:05:10] only 12. So she still has six years that she would be living with somebody else. So going through our list of friends, and our list of family, and trying to figure out who we would ask to take custody of our children, it can be a fluid process. Just because you choose somebody at one point in your life, doesn’t mean that that’s the right person to go forward forever. But it’s making us have some difficult conversations.
So that’s where we’re at right now. I’m hoping to be all finalized by the end of January. And of course, I will keep you updated in our Facebook group, which can be found at facebook.com/groups/bpmoney. I would love to talk to you about this. If you have any questions, if you have anything that you would like to talk about, you want to post anonymously in the Facebook group, this is a kind of a difficult conversation to have. And I don’t have all the answers. But if you have any advice or if you have any questions, I would love to talk to you.
So feel free to email me [email protected] or chat in the Facebook group. Okay? Thank you for listening. Like I said, this was a difficult show. But just because it’s difficult, doesn’t mean that we shouldn’t talk about it. From episode 265 of the BiggerPockets Money podcast, this is Mindy Jensen saying thank you very much for joining us today.