Welcome to Ask the Bills, where every two weeks Helaine Olen answers readers’ questions about their most nagging personal finance and financial etiquette dilemmas. Seeking advice on a money issue? Email email@example.com.
I’ve been dating a guy exclusively for a couple of months, and it’s going really well. We’ve both said we see potential for a serious relationship. The only issue is he won’t tell me how much money he makes. I know everyone has different comfort levels around money, but I talk about my salary very openly, as do most of my friends. On a philosophical level, I’m in favor of pay transparency as a way for people (especially women) to know how much they’re worth and avoid being underpaid. (For what it’s worth, he and I work in the same field, but his position is more senior.) On a practical level, I would love to know how much he earns for the sake of fairness when it comes for paying for dates. We’ve taken turns paying for things, but he’s spent more on dates than I have, and I’d be more comfortable with that knowing for certain that he earns, say, one and a half times as much money as I do. And, frankly, I’m just curious. Is it just too soon for me to expect this kind of openness?
First, let’s level. It’s me, not the salary fairness police. I don’t believe you want to know what your beau earns because you feel squeamish about the check. More likely, it’s because you took a leap by sharing your salary, and he didn’t share back. You’re unhappy about that. Now you want to know if you’re right to feel that way, if you’re overreacting, or if this is a sign that something isn’t quite right.
Like you, I believe in salary transparency. But your boyfriend isn’t a colleague or a good friend. You’re comfortable revealing your salary after a couple of months, but he might not be. It sounds like the two of you have a decent, informal arrangement for the moment. That he pays more tells me he likely does earn more than you, and that he likes you well enough to spend some of that money on you. For now, that’s great!
That’s not to say this situation should go on endlessly. And where exactly that magic moment of salary disclosure should take place, I can’t precisely say. It depends on the relationship, how serious it is, and when it crosses from promising to long term. Then you’ll have a right to know his salary. I suspect this will come up naturally sometime in the next few months. If it hasn’t and you’re still dating at, say, six months, then you could raise the issue directly. At that point, I think you’re justified in saying something like, “I told you my salary, but you never told me yours. Why not?”
Please write back and let me know how it goes. I’m a yenta that way.
I’m recently divorced. My ex-wife hasn’t worked for about 10 years. And I’ve been ordered to pay $48,000 in alimony over the next four years—a significant chunk of my monthly income. The alimony doesn’t start until our house is sold, and due to a bunch of refinancings, only the real estate agent will make any money. Should I pay my ex in full from my retirement, pay merely a large chunk out of my retirement, or suck it up and pay her monthly?
You probably know the “right” answer to your question: You don’t remove money from retirement accounts unless you absolutely have no other choice. You’ll pay a 10 percent penalty if you’re under the age of 59½, unless you do it in very specific ways. The one that’s applicable to your situation is called a qualified domestic relations order; it applies to 401(k)s and would have needed to be part of the final financial settlement. You can transfer individual retirement accounts to a former spouse, too, and that also needs to be part of the legal agreement. I’m guessing your divorce attorney already told you all this. But that’s not what you’re really writing about, right?
It doesn’t sound like your marriage ended pleasantly, the reference to sucking it up to pay alimony being something of a giveaway. Ditto your mention of your ex-wife not working in a decade. You’re asking if you should withdraw money from your retirement accounts so you can move on with your life and not think about your ex every time you look at your now reduced pay stub. I sympathize. I really do. But if you can afford to pay your ex-wife’s alimony on a monthly basis, just do it. If you pull from a retirement account, you’ll surely feel regret when you’re too old to do much about it. Besides, I can promise you it isn’t just the money. If you pay your ex-wife off in one swoop, you might just as easily find something else to stew about. That’s the thing about divorce.
One other matter: Presumably your ex left the workforce with your agreement. It likely made your life easier in some ways—I’m guessing you didn’t do too much grocery shopping or errands around the home. Try to think of the alimony not as a financial suck but a thank you for all the support your now former wife once offered you. That’s easier said than done, I know, but you once loved each other, after all. And as raw and angry and bitter as you feel right now, you’ll both move and reach better places in your lives. I promise.
I have become an adult, and I have zero idea how to act like one. I’m approaching 40 and have a husband and child, a mortgage, and two modest car loans. We have student loan debt, but it’s not too much. We owe very little on our credit card. My husband has a 401(k); I have a Roth IRA. We know how to pay our bills and work a budget, have a great credit score, and try to save every month. I’m much more a spendthrift, though, so my husband and I bicker about saving more. I’m not asking you to weigh in on this ongoing disagreement, but I do need direction. Where do I start with this personal finance stuff? I feel bad not knowing more and not doing more, so I feel stress and shame about it and avoid the topic. I’ve asked my parents for advice, but the best they can offer is to read up and maybe buy stocks. And it’s weird no one on either side of our families ever talks about this stuff. I don’t want to just plod along without asking the important questions before it’s too late. How do we get started?
Actually, it sounds to me like you’ve made a pretty good start. You’re paying down your bills, you have a mortgage, and you’re saving for retirement. So what else do you want? Well, actually, I can guess. You may not be asking me outright for my opinion on your friction with your husband over saving, but you are hoping for advice on how to resolve it. Why else mention it?
It’s well known that money is a leading cause of arguments between couples. And there’s lots of nattering advice out there about how to resolve them. Most of it’s useless. If you could agree on a budget in the first place, you wouldn’t be arguing about it. My take: Get a good book, like Personal Finance for Dummies, or—my publisher says I need to say this—the one I recently co-authored, The Index Card. (Spoiler: The first chapter it titled “Strive to Save 10 to 20 Percent of Your Income.”) Then decide how much you need to save to achieve your long-term goals and what you’re willing to give up to do it. Then talk to your husband about it, from a position of knowledge, not ignorance.
As for acting like an adult? I’m still working on that one myself.