Pay Dirt is Slate’s money advice column. Have a question? Send it to Athena and Elizabeth here. (It’s anonymous!)
Dear Pay Dirt,
My partner and I have recently begun running, which feels huge for me because I haven’t ran since high school. As a reward for my progress, I usually stop by a local tea shop and buy an iced tea, which is never more than $5. This really bothers my partner, who has suggested that I should just bring my own tea on my runs and save some money. But it’s just not the same, and I have plenty of room in my budget to account for the occasional dopamine rush I get from my midrun tea habit. To be clear, they are not worried that the drink is unhealthy or that it costs too much (I pay with my own money); they’re just not comfortable with my preference to buy something to motivate my exercise, no matter how small it is. What’s a girl to do?
—Retail Therapy
Dear Retail Therapy,
I’m wondering if your partner associates your retail therapy with having a shopping addiction. Anyone who has firsthand experience with a shopaholic can tell you it’s a slippery slope that can lead to a whole lot of financial heartache. This would explain the doom and gloom every time they see someone spend money to reward themselves. However, that’s clearly not the case here, since your purchases are small, purposeful, and allocated in your budget.
Next time your partner gets grouchy when you buy an iced tea, firmly say it’s your treat for running and it’s allotted in your budget. If they try to continue to debate it, end the conversation. Unless it’s affecting them directly, you do not have to justify to your partner, or anyone, what you spend your money on after your financial obligations are met. Your money is exactly that: yours. Just don’t come home with, say, a llama.
Dear Pay Dirt,
I need help formulating an argument to my husband. In February 2020, my mother-in-law died suddenly. She had no will, so the process was a mess because of a trust put in place by my grandfather. We let my father-in-law stay in a house now owned by my husband, and we covered all of the bills and lawyers’ fees until it was worked out, which has run about $40,000.
My father-in-law is now sitting on about $250,000 in cash, and his Social Security has kicked in, but he doesn’t want to leave the house my husband owns—but he is not taking care of it. He doesn’t clean; when something breaks, he leaves it that way; and he smokes inside. Plus, he has three dogs that just go in the house because he’s in poor health and won’t get up to let them out. It’s on an acre, and he doesn’t mow or weed. He says it’s too much for him and needs to move, but he’s been hemming and hawing for 16 months now. The house also wasn’t in great shape to begin with.
If my father-in-law were pleasant about this at all, I wouldn’t care as much, but he calls up once a week asking when we are kicking him out, even though my husband has assured him he could stay as long as he likes. And he complains that we expect him to pay the bills now and they’re costly. I, on the other hand, am watching our only inheritance lose value in front of our eyes. It’s not like we don’t have our struggles—we do OK but have debt. My husband says it’s an investment property so it doesn’t matter if we sell now or five years from now. Can you help me explain it to him?
—Am I Just Being Greedy?
Dear Am I Just Being Greedy,
It’s hard watching what appears to be a toxic family situation that involves your husband. You love him and want the best for him—which isn’t a world where his dad is calling him up every week to antagonize him. And that’s after you guys had to front him $40,000 in legal fees and give him a free place to live. Ouch.
Your husband may see the house as an investment property, but he may also see it as a way to keep an eye on his dad, who is his only living parent. Different couples have different dynamics, and if his mom took care of his dad prior to her death, your father-in-law could be having a hard time readjusting to life without her. So, no, I don’t think you are being greedy. I think your husband has turned into an unconventional caregiver and is unsure of how to best support his father, which is leaving you frustrated.
For the time being, I would quit pressuring your husband to kick his dad out and instead figure out how to best support him. Ask your husband how he would feel about charging his father “rent.” This doesn’t have to be market value—it could include his share of the utilities, a small amount to help replace broken items in the home, or funds for a landscaper to maintain the property. Dependent on which benefits he receives, he may qualify for a home health aide, which could be an outside company or even you guys. This is another possible way to make sure he is being taken care of while giving you and your husband some relief. Let’s be honest, he’s still going to smoke, but you can look into getting a doggie door and help him with training his pups to use it.
I know this isn’t what you signed up for, but I think by accepting the situation and trying to make the best of it, the tension between you and your husband will dissipate. I hope moving from a source of conflict to a source of support will also allow him to see the situation with more clarity.
Dear Pay Dirt,
I am recently divorced. I left the marriage with $250,000 in student loans, and he had about $30,000 in tax debt. We did a handshake agreement at the time of our divorce: I would keep my student loan debt and pay it off, and he would take care of the tax debt. This was generous in my mind, because about $30,000 of the student loan debt paid our mutual living expenses while I was in school. I filed for no-fault divorce (a decision I now regret). A year later, he has made zero payments to the IRS. I don’t think I was even notified by the IRS (or I somehow missed the letter), and this week, I noticed my paycheck was hit with an IRS tax levy. It appears they will be taking $600 each month, which is not insignificant for me. We filed jointly while married. My ex is employed, but I think as a 1099, and I very much doubt his paycheck was hit. I make more money than him now.
Beyond the fact that I am so sad that he didn’t keep his word, I feel extremely overwhelmed at the idea of being burdened with even more debt. My goals of owning a home and having financial stability seem like fantasy now. What are my options?
—Heartbroken and Broke
Dear Heartbroken and Broke,
Your feelings about this situation are totally valid and understandable. Your marriage dissolved, and now the IRS is making you pay for his mistakes. In the words of the prophet Cher from Clueless, “Ugh, AS IF!”
I don’t think I have to tell you that your joint filing is why the IRS is garnishing your wages despite being legally divorced. There are three different types of relief you can file. First is innocent spousal relief, if your ex-spouse lied or made errors on your tax return, which led to the debt. But it sounds like you knew about the debt, so this likely wouldn’t apply. Second is relief by separation of liability. This states to the IRS that you didn’t realize how inaccurate your joint taxes were until you received a tax bill in the mail. Third is equitable relief, where you tell the IRS that you did understand you may both be on the hook for this debt when filing joint taxes but your circumstances have since changed. Since a garnishment of $600 a month is causing you financial instability, it is not fair that they be going after you for this debt and not him instead. This is likely your best bet.
I know the last thing you want to do right now is spend more money, but I think your next move is to consult a trusted tax professional to help you through this. They will direct you on your next steps and will ensure you are within your legal rights. Get this taken care of so your financial future isn’t in peril—and so you can move on from your ex.
Dear Pay Dirt,
I am a middle-aged adult and have one similarly aged sister. My husband and I have pretty high-paying careers. My sister and her spouse are not paid nearly as well, although they also have solid careers. My parents have benefited from inheritances and their own financial planning and have been comfortably retired for some time. And for many years, they’ve helped my sister and her family financially. I’ve never had the impression that they helped my sister in a way that jeopardized their own financial well-being.
My parents have decided that they’ve exceeded whatever limit they had in their minds about how much more they could help my sister financially without sending the same amount to us. So each time they help my sister, they want to send us money. This includes relatively small electronic transfers that show up with little warning, calls from my financial adviser that my parents are trying to transfer more substantial amounts, and sneakily paying for aspects of family vacations that I’d already booked. While I think my parents are generally being mindful of tax limitations applicable to gifts, my spouse and I aren’t really comfortable accepting financial support, and this also seems like a violation of my sister’s confidence (I’d guess that she’d prefer that we not know the nature or extent of the financial support she receives from my parents). And, as unseemly as this is to say, it’s a little bit of a hassle to have random amounts of money show up unexpectedly “for the kids.”
What am I supposed to do with this money? We already fund their 529s, we provide for all material needs, and we do as many kid-friendly experiences as we can, and so on. I’ve told my parents expressly and repeatedly that I do not need things to be “equal” with my sister, and I think they know that I’m being sincere. But they’re not relenting. Is there any way I can persuade them to stop this? Or, if not, do you have suggestions as to how I can direct their gifts to make them happy without making us uncomfortable?
—Thanks but No Thanks
Dear Thanks,
Sometimes when parents help out one child and not another, it breeds resentment. Your parents seem very sensitive to this issue, so while you may not need financial assistance like your sister, they want you to know they love you too. They may be driving you and your financial adviser up the wall, but they mean well. And what a blessing it is to be in this position.
Since your parents seem unable to stop gifting, have them direct their funds into a custodial Roth IRA for your kids instead. When it comes to securing financial aid assistance for college, 529s, trust funds, and other investment vehicles can be counted as financial assets. The more financial assets you and they have, the less financial aid they will be eligible for. It may not seem like an issue now, and it might not be in the future, but it is something to be aware of when investing on your child’s behalf. This is where the custodial Roth IRA comes in.
Retirement accounts are not counted as financial assets for financial aid purposes, which makes this a perfect way for your parents to help their grandchildren. With a custodial Roth IRA, you parents can open one in your child’s name, with the kid being the beneficiary and your parents the custodian. There are stipulations, just like any other type of investment account, so it’s important to do your research as you would in any financial matter. But the best part? It’s free to you and makes your parents feel good, all at the same time.
—Athena
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I grew up in the foster system, in some nightmare short-term homes. I had a grim view of what taking care of kids was like, and assumed I wasn’t mom material. But in college I met the kindest, most caring woman in the world and I fell in love. Now we have a 3-month-old daughter, and I have discovered a powerful love I never knew existed. Since my wife’s job is higher paying than mine, we’ve been talking about me being the one to stay home or work part-time. My wife and I are on the same page about this. But when I talk about this to friends, they are very negative.
