• Rita Cool

Financial Transitioning

Change is as certain as death and taxes

Big changes can create financial transitions in a person’s life that can be good or bad. Examples are when your spouse passes away, when you get divorced, when you get retrenched or retire or when you sell your business. All of these have financial as well as emotional implications.

Your transition could have happened suddenly or it could have been anticipated and you are prepared for it. You can be happy about the change or it would cause unhappiness or grief. Unless you are emotionally ready to make a decision on the money or assets that are affected by the transition, it is likely that you could make a mistake with your decision. An emotional decision on your finances could have far-reaching implications not only for you and the rest of your life but also for your family.

Change often causes stress

Different people deal with stress and change differently. For some, change and stress can create a loss of identity, a feeling of hopelessness, confusion and numbness or an overwhelming fog that clouds decision making . Others harness the stress and use the opportunity that change brings with clarity, focus and with composed behaviour. They are realistic about the new possibilities and feel energised. For some people, the transition process is short and for others it takes longer – sometimes years to work through to the final phase.

During a transition you should remember that you don’t have to do it alone. You are also not the only person who has dealt with something like this, so what you are feeling, whatever you are feeling, is normal. Use the right financial adviser to help. You can deal with an adviser who is equipped to deal with the emotional issues that surround you during transition so that you can then take the correct financial steps when you are emotionally ready. This is the way forward for financial planning, focusing not only on the numbers or a product but foremost on you, the person.

Deal with your emotions while you deal with your finances

The processes that are used with financial transition help you to look at the big picture – not only at what is happening but also what you want to do to after the change has happened. The process doesn’t do the emotional work for you; it gives you tools to deal with the issues. It is not life coaching, nor does it replace therapy, but it helps you deal with your emotions while you also deal with your finances.

The specially trained adviser uses tools to help you clear your thoughts so that you can deal with all the different issues without being overwhelmed. To start, you can write down the items that you are thinking about or are worried about and grade them according to urgency and importance. You might find that you are worried about unimportant things that might never happen. It also helps that you don’t forget things that are important to you just because you will deal with them later. Each item is dealt with when necessary – not all at once.

The adviser can help you to see if you are okay financially when change happens and for how long you will be okay before you need to make financial decisions. If you are okay with your retrenchment package for a while, do you really need to make an emotional decision on your retirement savings or whether or not you will pay off the house with that package? Or in the event of a divorce, how will your income change and will it affect the children, to what extent and when? This is not a “hide your head in the sand and hope problems will go away” deferral of decisions; it just gives you time to think about your situation rationally with the help of an adviser who is skilled in dealing with emotional issues.

The process can also help you to manage expectations, not only of yourself but also of what other people expect from you. That could be income expectations, donations or inheritance. Your adviser can help you draw up a personal statement that you can use if anyone expects things. This helps you focus until you can deal with those expectations.

Once you have moved past the transition and have reached the new normal in your life, you can also make decisions on your long-term situation and goals by creating a bliss list. Your adviser can be part of the journey to reaching your financial goals.


Rita Cool is completing her studies through the Financial Transitionist® Institute to become a certified financial transitionist.