The Money We Didn’t Want

A life insurance payout caused Chloe and her mother nothing but grief.

Photo: Alejandro Ortiz Pellicer/Flickr

In 1991, three months before my second birthday, my father died. He was a fit, healthy 29-year-old physical education teacher who took a sick day one Friday in February. By 7:00 a.m. the following Friday, he was dead.

Accessing his life insurance payout was not easy. For starters, he had died without a will. And due to an administrative error. my father was both the owner and beneficiary of his own life insurance. Once this was cleared up, and my mother and I were made equal beneficiaries, the insurance company was skeptical of the circumstances. A year and a half after his death, my mother finally received the money.

As it turned out, this money caused almost nothing but trouble for my mother and me. I’ve roped her in to talk about what happened, why, and the ongoing impact it’s had on the two of us as women who have to manage money.

At his death, we were completely up to our necks in debt. We had signed a contract to purchase of a darling cottage one block from the ocean in Brisbane, Australia. A fortnight later, I confirmed my suspected pregnancy, knowing we could not afford for me to stop working; we were both teachers but I was earning the higher salary. Six months after the birth, he was transferred out of Brisbane and our mortgage payments skyrocketed because the house was now considered an investment property. After living in Far North Queensland for 14 months, our credit card was maxed out; we were scraping to meet our monthly repayments. I was only taking casual work; being a mother to my daughter was extremely important to me. And unfortunately, my entrepreneurial acumen is non-existent.

The life insurance payout was $60,000; but at the time, our intestacy rules dictated that his estate be equally distributed between my daughter (his only issue) and me. I felt guilty and extremely uncomfortable about receiving money in exchange for losing my best friend and the father of my baby girl.

While the money I received as a result of his death made my life without him financially possible, it did nothing to alleviate the unending ache of not having him around anymore. I was able to pay out the mortgage, which allowed me to be a full-time mum to my daughter while I worked and studied part-time, and volunteered at the local school. We were poor, but I figured it wouldn’t matter while my little girl was too young to understand.

I have good memories of my childhood in our cottage. Not having a mortgage on it gave us some stability that we may not have had otherwise. Being as young as I was, I was unaware of how poor we were and I don’t remember feeling like I was missing out on things.

I think about our circumstances now and I can see the tragedy of it. At the time, I was embarrassed and angry about everything; it seemed so unfair… particularly for my daughter who would never know her father. Still, we got on with it. I was offered part-time work lecturing at the local TAFE. I enrolled in a post-graduate course to upgrade my teaching qualifications with a view to being employable when my daughter started school. The local community kindergarten made a special allowance to accept my daughter — which gave me the time to work without it impacting on our time together. I spent my days being the one thing I wanted to be more than anything ever — Chloe’s mother. Despite the lack of funds, and missing her father every day, we were extremely fortunate… we had each other.

We were involved in a church community that proved to be a double-edged sword in our lives over too many years. There were people within the church community who expressed their care and kindness for our situation and us. At the same time, there was the pressure brought to bear that it was my responsibility to “give back to the Lord for his abundant provision in our lives.” I struggled to be gracious in this situation. I gifted $9,900 to the church whilst my anger towards a god who seemingly thought it appropriate to take my daughter’s father grew.

Once I had obtained Letters of Administration for my husband’s estate, paid off my mortgages, given money to the church (and despite being counseled to go for an extended holiday with the money), I decided that I would invest it wisely. I purchased a block of land near the beach on the northern coastline — with a view to having a holiday home for school holidays. That got really ugly before long with men from the church treating us like public property and bossing me around. I ended up losing $33,000 in a very badly advised investment.

I have a very distinct recollection of the first time I accessed my chunk of the money. It was January 2007, and I was standing waiting for a train when I got a text message inviting me to dinner with friends. I was earning junior retail wages and I was supposed to be saving for a car. There was about $6 in my account. Then, my mind wandered to my other account. I didn’t know if I would be able to access it, but I figured it couldn’t hurt to try.

Over the next twelve months, I got used to the way an account with five figures in it insulated my world. I always had money for a coffee or a drink at the pub or a pair of new shoes. I didn’t check price tags or save up for things. I didn’t even have to wait until next pay to do something. The steadily dwindling balance in my savings account made me feel a bit sick, so I stopped thinking about it.

I’m still embarrassed by the way I wasted my chunk of the inheritance money. I’m trying to make sure I learn something from it, so the whole experience wasn’t a waste. I also remind my self that I was an 18 year old with no idea what I was doing, so I should get a tiny bit of forgiveness for that.

For 18 months I have been putting a lot of effort into solving my money problems, without properly understanding what they are. I am hopeful that this knowledge will allow me to buckle down with Operation Get Your Shit Under Control (the private title I’ve given this project), and finally, learn to live within my means. The debt is being paid off and I am teaching myself that spending money is limited to what is left over after the boring things have been paid for.

So, $30,000 of the life insurance payout was my daughter’s on reaching the age of 18 years, and I had invested and lost $33,000. I sold the block of land at the beach to repay the bulk of her money that I’d lost. And over time, I continued to pay money into that account so she would not lose the principal of her inheritance. I had decided that I would keep her money in trust until she turned 21, but I was ‘advised’ to give it to her sooner.

As it turned out, it evaporated very quickly and very quietly during her gap year. She was working, socializing, and enjoying life. It wasn’t until some time later that she told me that she had been dipping into her inheritance to the extent that it was now gone. I was annoyed with her, but more so with myself for thinking I should listen to other people’s advice on how I should manage my finances.

These days I want nothing to do with ‘financial matters’. They scare me. My happiest times have been when I’ve had next to nothing financially, but a wealth of relationships.

Last year, my paternal grandfather died. Although it had been quarter of a century since my father died, the will stated that my mother was to receive my father’s share of the estate. There’s a six-figure sum heading for my mother’s bank account. Some of it may end up in my bank account. The idea makes both of us very tense. Maybe we can do it right this time. Maybe managing this money responsibly will allow us to forgive ourselves for the way we’ve managed money in the past. Maybe it will be an opportunity to stop feeling bad about anything that’s vaguely finance-related. Or maybe our lack of understanding and self control will trip us up again. I’m interested to see what happens next.

This story is part of The Billfold’s Financial Fails series.

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