The Weight of Grief on Financial Choices

In the wake of a major loss, grief punctures our lives with a unique form of chaos and tumult. Beyond the emotional devastation, there are often destabilizing practical and financial ripples that require careful navigation during an incredibly vulnerable period. Unfortunately, grief itself can profoundly impair our ability to make sound financial decisions exactly when we need it most.

The emotional tornadoes of sadness, anger, guilt, anxiety and regret that accompany grief actively work against our faculties for rationale, focus and long-term planning. Brain studies have found the prefrontal cortex – the region responsible for executive functioning like decision making, problem solving and weighing consequences – effectively gets disrupted and deactivated when we're overwhelmed by intense emotions.

"In the aftermath of a major loss, there's a very deep biological override that causes our normal decision making capabilities to essentially shut down," explains clinical psychologist Dr. Mary-Frances O'Connor. "Our mental resources become overwhelmingly redirected towards simply coping with the emotional deluge in that acute grief state."

This combination of destabilized cognition and emotional volatility is not exactly an optimal frame of mind for handling complex financial matters. Yet death, particularly within a family system, often triggers a litany of tax, estate, inheritance, real estate and other practical obligations that require careful decision making under extreme duress.

Emotions can cloud judgement around big-ticket expenditures like managing a mortgage, dividing assets, liquidating shared properties or updating beneficiaries on insurance policies, investment accounts and retirement funds. Smaller everyday financial choices also become mentally taxing when grief strips away our ability to focus and organize. Routine budgeting, paying bills on time, handling documentation – even little things like grocery shopping require heavy lifts we're ill-equipped to handle while grieving.  

"From an inability to make major decisions to neglecting basic self-care purchased through things like fresh foods, financial wellness can definitely become derailed during the depths of grief," notes grief counselor Heather Stang, author of Mindfulness and Grief. "People can very quickly veer into self-destructive spending habits or reckless money decisions because the part of the brain that weighs consequences just isn't firing properly."

That impaired brain function, combined with a desperation to avoid or numb the heartache of grief, is why financial coping mechanisms like overspending, hazardous investing, and turning to indulgent consumption habits are so common for the bereaved. When inhibition and restraint go out the window, addictive spending patterns and self-soothing retail therapy tend to flood the void.

Michelle Petrowski-Molina, a grief recovery specialist and author, has seen clients trapped in cyclical money woes after believing short-term financial Band-Aids would alleviate their suffering. "They try to escape grief by throwing money at their pain – swiping credit cards to accumulate more possessions, blowing savings on impulsive big-ticket purchases or luxuries, or numbing through alcohol, substances and vices that drain resources," she explains. "In their destabilized states, people think spending might fill the unbearable voids grief has created within them but it only leads to compounding remorse and financial burdens later."

People in grief can also find themselves more vulnerable to excessive generosity and lack boundaries around financial requests or dependence from others. "If a relative shows up asking for a loan or charity solicitors come calling, those in active grief are more prone to saying yes just to escape the interactions rather than exercising prudent financial judgement," explains Stang. "If someone is grieving a loss of belonging and identity, they may irrationally extend charity as a way to manufacture a sense of purpose that isn't sustainable for their budget or future security."

Then there's a more insidious financial byproduct of grief that can linger for years unattended: Under-earning and neglecting financial foundations due to lack of motivation and numbness.  

"Grief quickly drains people of ambition and puts their careers into idle mode at best, and causes job loss at worst," says Petrowski-Molina. "I've had clients who have missed massive financial opportunities and raises in the aftermath of loss because their concentration, confidence and drive just hadn't rebounded yet. Months and years of under-earning or halted momentum takes huge tolls by the time they resurface emotionally."

This dangerous drift from financial health often stems from the false notion that grief is a temporary state that will pass quickly with time. People tend to drastically underestimate how long acute grief can last, with residual emotional harbingers persisting for well over a year in many cases. Under-preparing for the marathon of grief's impacts means letting harmful financial patterns solidify into crises.

"We all intuitively want closure with grief, so we'll power through and ignore its debilitating grip to our detriment," says Stang. "People try to stuff down their sadness and force themselves to be unrealistically productive prematurely, only to find themselves too numb and disorganized to make savvy money decisions or even maintain long-term financial plans."

Ironically, those who attempt to accelerate healing by burying grief often accidentally prolong its financially destabilizing grips over their career and assets. What could have been a temporary rerouting becomes a more permanent detour because they denied the grieving process its due cycle.    

Grief recovery experts emphasize creating protective structures and mental corridors to uphold motivation and awareness while grieving's emotional upheavals disrupt cognition and judgement. Assigning a level-headed loved one, financial advisor or decision-making body to oversee complex financial choices offers sober guidance. Automating finances through digital tools, scheduled check-ins and reminders help maintain fiscal discipline when executive function wanes.

Above all, attentive self-compassion and extending generous mental runways for processing loss are highly advised before making permanent financial commitments like changing careers, relocating homes or retirement plans, or signing any long-term obligations. Grief has a nasty tendency to cause people to impulse towards extremes – either crippling inertia or reactive reinvention – out of a desire to "get it over with."

"Beware choices made in early acute grief that are oversimplified or drastic," recommends Stang. "Grief gradually lifts those mental clouds over many months for most of us. It's best to insulate yourself against regrettable financial decisions fueled by explosive emotions in the interim."

While widespread emotional disarray is unavoidable when a pivotal loss fractures our lives, financial unraveling is not. By taking stock of grief's destabilizing influences, making arrangements to prop up fiscal safeguards, and exercising saintly levels of patience with lapses in money management, the bereaved can insulate themselves from permanent financial fallout that too often trails in grief's wake.

"Appreciate that grief compromises you in ways that can seem infuriating when you need to be on point with managing your money, your job, your family's security and assets," says Petrowski-Molina. "Be proactive and brutally realistic. Have supports in place for when you aren't as in control as you'd like to be."

With time, care and self-forgiveness around occasional missteps, financial wellness can be one of the threads that helps weave a life back together after that tapestry's been torn apart by loss. It's yet another manifestation of grief's chaos we must learn to make peace with by slowing down and removing any unnecessary decision burden until we regain our equilibrium.