Pay Dirt is Slate’s new money advice column. Have a question? Send it to Athena and Elizabeth here. (It’s anonymous!)
Dear Pay Dirt,
My great-grandparents left their four great-grandchildren $10,000 for college in investment accounts. Five years after their passing, the accounts were worth $30,000 each, thanks to some smart investing by my uncle. At this point, my parents closed my and my brother’s accounts and invested the $60,000 in their business. This business went bust a year later, sending my parents into bankruptcy, foreclosure, and a nasty divorce. I was 12 when the accounts were closed and didn’t know anything about the money until much later. My cousins (the other two recipients) used their money to graduate college debt-free and were both homeowners by their early 20s. I’m told the accounts were worth almost $80,000 apiece by the time my cousins cashed out their inheritance.
I recently graduated college with a lot of debt, even though I attended state school on a good scholarship. My parents couldn’t contribute financially, and I received financial aid as an independent student. This meant more private loans than the average scholarship kid. As a graduation gift, my mother promised to leave me her house in her will to eventually pay me back for the lost college fund. But now she’s saying she wants to sell her house (now the mortgage is paid off) and move into a beachfront retirement rental community in a different state.
I don’t want to sound greedy, but this idea hurts my feelings. While I recognize her autonomy to make her own financial decisions, it still hurts that she’s already forgotten her so-called gift. I’ve never actually said anything about this situation to my mother because I recognize it is something she feels very guilty about. I don’t know if this new housing decision is based on some debt in my mother’s life that I am unaware of or if this is just how she wants to live out her retirement. Am I OK to feel hurt by this decision? How do I let go of the resentment of my misspent college fund? Should I bring this up with my mother or stay quiet?
Dear Greedy Child,
That is so shitty your parents took your money, then lost it—and also cost you so much headway you could have had as an adult. The cherry on top is you get a reminder every time your cousins host a barbecue. Not cool.
In this instance, I would say your mom is the greedy one, not you. It’s not OK for her to promise you this house to pay off your loans that you had to take out because she and your dad blew money your grandparents had set aside for your education. The cold, hard fact is she doesn’t feel guilty. She fakes guilt in hopes you’ll let her off the hook and can remain civil.
I am worried you will be miserable until you come to terms with this betrayal. It would be best if you weren’t miserable! You don’t deserve that. If you have the means to do so, I would start counseling to work through the mistrust and financial abandonment your mother has caused. You can also seek out therapists who work on a sliding scale or other lower-cost options if your budget is tight right now. From there, you can better assess the situation with your mom and how to move forward. I’m thinking of you.
Dear Pay Dirt,
I am a single mother of two children and make about $87,000 a year before tax. For where I live in the country, this is a very large salary (the typical household income for my county is $40,000).
I own my home, have a car payment, student loan debt, divorce debt, and the usual bills. My issue is that I am still living paycheck to paycheck. My monthly bills total about $2,500, which is a little over half my take-home pay.
I have about $500 a week left over for living expenses, but I am constantly one medical issue, house repair, or car issue away from wiping my extra income. I struggle to accumulate savings for the same reason. I have already eliminated all monthly costs I can (no memberships, few out-to-eats, free recreational opportunities), purchase things secondhand, and shop at Aldi to save on groceries. We also garden and focus on energy saving to keep utilities low. I feel absolutely clueless about how to better manage my money. I want a savings account. I want to be able to repair my car without putting it on a credit card. How can I learn to better budget what I have? I am not destitute, but feel like we are scraping by. I want things to feel less like a struggle all the time.
—Struggling Single Mom
Dear Struggling Single Mom,
Props to you for being a single mom—I know it’s not easy. Also, props to you for being a high earner. Many people think you have to choose between both, and that’s not true.
Despite popular opinion, it’s easy to end up living paycheck to paycheck, even in areas where you have a higher-than-average salary. Pay has not kept up with the cost of living, which has skyrocketed over the years due to inflation. You may make good money on paper, but you’re still paying taxes and have a ton of debt, so we need to work on making you a cash buffer, so you won’t be one bad day away from having to start over again.
First, I want you to look at your debt and see if you can get any of it refinanced. When you refinance for a lower interest rate, you have a smaller monthly payment, and your loans will be paid off faster. Both of these things will work in your favor, so call your local credit union to see what they can do in regard to your auto and home loans. After you’ve figured that out, please look into refinancing your student loans with a company like SoFi. I don’t know enough about your divorce debt, but asking for a discount has never hurt anyone. Explain you can pay it off faster, and they might work with you.
Next, I get the feeling that you don’t have a plan for $500 a week except hoping for the best, which is why you can’t save it. You’re the CEO of your finances, and every dollar you have needs a job. Zero-based budgeting will help you do just that. With this method, every dollar is assigned a category—groceries, insurance, and whatever other recurring expenses you might have. You can start putting money aside for car repairs or medical expenses, even if it’s just $5 or $10 at a time. You Need a Budget is a great app that can help you ace your new zero-based budgeting plan, or if you want to use something that’s free, check out Mint, or make yourself a spreadsheet.
Dear Pay Dirt,
I am 65 years old and retired. I have a very good pension and substantial savings that would provide me with a comfortable rest of my life. My home is paid off, and I have no other consumer debt. I have worked hard and sacrificed much to be at this place in my life.
After I retired, my daughter was in an accident that left her unable to work. She could no longer afford her home for her and my two granddaughters (her kids’ father does not have funds to help). I suggested that she move back home for a year or two to regroup. That was eight years ago. She never went back to work and has been “in school” for about three years getting her nursing certification—I think. Although I love them dearly, I am tired of living with them.
We (she, mostly) have been discussing getting a bigger house so that we can continue to live together, I can help with her special needs child, and I can have a space to find some quiet when I need it. Selling my paid-off home would give me a substantial down payment, but she would still be coming with nothing—not even a job to help pay a new mortgage. I want to help them, and I love watching my grandchildren grow up, but I feel like I would be screwing up my own retirement plan and giving away my peace of mind. What do I do?
—Help Her, Save Me
Dear Help Her, Save Me,
I have two questions after reading your letter. First of all, what do you mean that your grandkids’ father “does not have funds to help”? Unless he is next to Johnny Cash in prison singing about the Folsom Blues, he needs to do something to provide for these children. You provided for your child, who is their mother, but you should not be expected to provide for your grandkids—their parents should be. Which brings me to my second question: Why is your daughter going to school if she’s not going to work? You said she’s “in school” for a nursing certificate, but you also said supposedly. Find out what’s going on there.
Do not—and I repeat, DO NOT—sell your home and get a bigger one. Help your daughter move out with a get-self-sufficient plan instead. Explain you want the best for her, and that’s not living with you. You love her and your grandkids so much that you think they deserve a home of their own, and you want to help her get there faster by bringing in outside support.
First, your daughter needs to file for child support. Let the judge be the one to decide if the kids’ father has enough funds, not anyone’s feelings. Second, every state has resources to help pay for additional care and therapy for those with special needs, especially children. Find your state’s department and give it a call. They should be able to help connect your daughter with the services her child needs. Finally, state and federal programs like the Workforce Innovation and Opportunity Act help people like your daughter get back to work. Along with funds for supportive services, such as a deposit for utilities or rent, they may also cover a trade or certificate up to $3,000 and help with child care. Your best bet is to Google “job training [your state]” and/or “WIOA [your state]” and contact the relevant agency.
You aren’t wrong for wanting to retire by yourself comfortably, so with a bit of tough love and outside help, you won’t have to give that up.
Dear Pay Dirt,
My parents are constantly expressing concern about my family’s personal finances. In the past this has mostly resulted in my wife rolling her eyes while my mother compared our incomes to that of my older cousins and their spouses with similar educational backgrounds. My wife and I, working in academia, made less than half of what they make in the private sector, but we still comfortably cleared six figures each.
A year ago, my wife stopped working after the birth of our first child and has been slow in returning to work because of COVID’s impact on our field. We had to tighten our belts a little and make a serious budget for the first time in years, but we’re hardly struggling. Despite this, the level of concern from my parents has gone through the roof the longer we’ve raised a child on “only” a single six-figure income.
I can’t have a conversation with my mother without her reminding me I could make so much more money in the private sector and afford a much nicer house with a maid and nanny. My father, on the other hand, recently took a keen interest in the 529 savings plan (a Vanguard target-date fund) I set up for my daughter upon her birth. He told me he didn’t like his contributions to the 529 “going to waste” by not getting the best returns and said I should invest my child’s college savings in the manner he deemed fit. I told him he should start his own 529 for our child if he cares so much.
That was the last straw for me. I haven’t been able to speak to my parents since the 529 incident, and they’ve not attempted to call us. I would like them to have a relationship with their grandchild, but when we speak again and they bring up money (as they inevitably will), I’m liable to scream at them that we neither want nor need their money. How do I handle this?
—Embarrassment of Riches
Dear Embarrassment of Riches,
Good job sticking up for yourself. Parents want the best for us, but talking about money isn’t what’s best in this situation. Your parents aren’t going to stop unless there are proper boundaries put in place. A timeout is a good idea as feelings are hot, and we need to cool down.
Let them reach out to you, and when they do, tell them point-blank you will not be spending another second discussing money. Not income, not savings, not careers, nothing. If they start to venture in that direction, remind them of your rule and change the subject or end the conversation. You can discuss plenty of other things, and you still want your family to have a relationship with your kids, but enough is enough. Unless you are putting your child in an unsafe environment, it’s none of their business. And contrary to their opinion, your child is happy and fine living like a peasant with six-figure parents.
My parents are in their 70s and have never been good with money. They spent years as Christian missionaries, tithed regularly, and continue to give to fundamentalist charities and right-wing political movements. I never felt that they provided sufficiently for my sisters and me when we were growing up. Though they both have white-collar jobs and we lived in the suburbs, they saved nothing for any of us for college and have barely maintained the family home, which is their only asset. I made a life for myself far away from them, and about five years ago, I started paying for them to fly out to see me every year. I paid for everything while they were my guests. Recently I found out that my father continues to give money to people he hardly knows. I disagree with everything my parents stand for and fund politically. I would like to stop paying for their yearly trips to sunny climes, particularly since it feels like the money I save them on funding their vacation they simply spend on efforts to make the world a very scary place for people like me. Should I tell them? Just stop paying with no comments? Or continue along the same path while they still have the energy to travel?