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 husband, our young child, and I own our condo in an incredibly expensive area. My mother-in-law lives nearby and owns a large, beautiful house in a highly desirable neighborhood. She has been trying to convince my husband that we “need” a larger home, and he is beginning to agree. I am very happy with where we currently live and don’t feel the need to make changes.
MIL has come to us with a very generous proposal—we would each sell our respective homes, and she would give us a substantial amount of her profit. We would then each buy a new home (an upgrade for us, but a downgrade for her).
My questions are logistical and emotional. Logistically, what are the steps we would take if we wanted to pursue this? MIL is going about this totally backwards—she calls my husband in a frenzy from an open house, asking if she should put an offer on it. But she hasn’t even spoken to a financial planner or real estate agent about selling her own house. None of us have enough liquid savings to put a down payment on a new home before selling our current home. It seems like a huge headache to sell two homes and purchase two homes in rapid succession. (Would we have to find somewhere to rent in between? Both households have dogs, and commutes, and so on.)
Emotionally, I am very reluctant to further enmesh our lives with MIL’s. She is loving and generous, but also very opinionated and sometimes has issues with boundaries. I feel that if we were to continue down this path, she would have a lot to say about where we ultimately buy (“I’m not selling my beautiful house that I love so that you can buy that dump!”). I fear that there would be more expectations placed on us as she ages, and that she would dangle this huge favor over us for years.
On the other hand, this is the only way we will be able to afford to buy a three-bedroom home in our area. We don’t plan on having another child, and I love our condo, but it does feel small at times. What to do?
—A Nice Idea That Could Leave Us Stuck
Dear Nice Idea,
If you want my honest opinion, I would say this is a bad idea and you shouldn’t pursue it. There are too many strings attached. If your MIL were truly sincere about wanting to sell her house so she could downgrade and give you guys the proceeds, why does she want you to sell your home first, too? So you’ll both be in the same boat and scrambling to find something in this insane market? That sounds stressful enough, and that’s without having to deal with your kid and their school, your dogs, or your commute. Why couldn’t she just go first, give you the money, and let you find a place at your leisure? The plan feels impulsive and, as such, a little bit like a trap.
There’s a lot that goes into moving, and sometimes people forget that. Also, your upkeep costs on a home might go up, compared with the upkeep on your condo. If I were you, I’d hold my boundaries and agree to her assistance if she is willing to give the proceeds from her own home swap as a gift, for you guys to save up and then buy when the time is right. If she says no to that, then ask your husband if he would be willing to help you declutter your current condo and start saving for a home of your own, by yourselves.
Dear Pay Dirt,
I have a good job that pays me generously, provides great health insurance, and includes decent vacation (by U.S. standards at least). I work hard, but not excessively; usually the typical 40 hours a week, with rare work required on a night or weekend. I’m not particularly stressed by my job, and I can work more than 50 percent of the time remote. I went to graduate school a decade ago, which was required for this job.
All of this is hardly a problem, except I would like to quit. I am not passionate about my job and, at least right now, do not need my income. I am in my late 30s, married with three kids. My husband quit his job in the finance industry about five years ago to be the primary caretaker of our kids and also to manage several investment properties (long- and short-term rentals).
We are financially very stable, with no student loan debt, and we pay off credit cards every month. We do have more than one mortgage, but the carrying costs are more than covered by rental and dividend income, by my husband’s design. We have about a year’s living expenses in savings, and that is including if every tenant stopped paying rent.
My husband has explored individual health insurance, and while it’s not great, we could afford that if I quit. We get additional (unnecessary, but appreciated) financial support from my own parents, as part of their wish to pass on money during life rather than after death.
A couple things are keeping me from quitting: Have we thought enough about health insurance? We would technically be “covered” in case of an emergency, but my impression is most of these independent health insurance plans are pretty bad. The bigger one is: How can I throw away this rather huge salary and a great job? I feel like most of my peers would think I am crazy for walking away from a multiple of six figures per year, ostensibly just to hang out at home for a while.
—I Can’t Help It—I Still Want This
Dear Still Want This,
Just because what you have is something that others desire does not mean you can’t want something different for yourself. Life is short. So, if you want to take a year off and spend time with your family, do it. It sounds like all of your hard work has left you in a great place to pursue your options, and taking time off doesn’t mean you can’t ever go back—or find a different kind of job altogether. This doesn’t have to be forever.
For health insurance, yes, there are some extremely shitty plans out there. Health care in America is expensive, and I could go off on a complete tangent about the unfairness of it. But as you are currently well-off, you can find a legitimately good plan for you and your family; it will simply cost a lot more than you are paying now. There are four “metal” categories for health care plans: Bronze, Silver, Gold, and Platinum. These categories show how you and your plan share the cost of care. So, if you have a bronze plan, your health insurance company will cover 60 percent of your health expenses while you are on the hook for 40 percent. The higher the tier, the more they will cover and the less you’ll pay. If you or your family have or are at risk for health complications, you’d want the higher tier, as it could mean you’ll pay less out of pocket.
You’ll also want to look at your premium (monthly bill), out-of-pocket costs including what your deductible will be (the amount you must pay out of pocket before health insurance kicks in), and the network of doctors and health care facilities where you can seek treatment. Health insurance can be complicated, but you can do this; it sounds like you and your family would love to spend more time together. You just need to be smart and pick the right plan for you.
Dear Pay Dirt,
I’ve had a few very difficult financial years, starting before the pandemic. I was diagnosed with a chronic illness that makes it hard to work, despite having several degrees. On top of that, because I was sick, I failed to get potential financial help. Some of it was because I didn’t know about my options, and some of it was because I didn’t think I qualified.
Due to that, I racked up a ton of credit card debt. I finally found a job I could work part time and live on. It’s not really enough to tackle my debt, though, and several of my credit cards have gone to collections. I’m trying to deal with this the best I can, but I can’t imagine it will be easy to get out from under this debt anytime soon. I know that part of the reason for my financial situation is the fact that I was sick and was just trying to survive, but I can’t help but beat myself up every now and then about the dumb decisions I have made. It’s entirely possible that I would either have no debt or a manageable amount of debt right now if I had sat down and considered my options or maybe talked to somebody about my situation.
I’ve been trying very hard recently to get financially stable. However, I unexpectedly had my SNAP benefits cut due to new employment. Due to my health issues, I have very specific dietary needs and can’t eat most low-cost staples. Between a new, expensive doctor and some expensive treatments, I’m low on money. I was already having trouble buying groceries on my benefits amount since I found out about my new dietary needs. I’ve been considering going to a food pantry.
The biggest problem is that I feel like I shouldn’t take advantage of that service. I live with my mother because of my financial situation, which is a big reason why my benefits were cut. A food pantry would ensure that I can eat and deal with my debt; otherwise, I’m not sure I will be able to. I’m not ashamed to use a food pantry, but I don’t want to take nutritious foods away from people who have to choose between food and rent, something I don’t have to deal with. Do you think it’s morally justified for me to go to a food pantry, to essentially help me pay off my debt?
—I Feel Guilty Thinking About This
Dear Feel Guilty,
I am sorry to hear about your health struggles, but glad that it sounds like you’re on your way to healing. That’s great! The not-so-good news is your finances are in shambles, and while you are working on a plan to get out of this situation, you could use some additional assistance. I highly recommend you take advantage of your local food pantry while you get caught up.
There are many myths that surround food pantries. One is you have to be receiving SNAP to go, or you need to be homeless—neither of which is true! You are not taking food away from those who need it, because guess what? In order to make a dent in the financial mess you’ve gotten into, which wasn’t your fault (even though you may feel that way sometimes), you need any type of assistance you can get. This includes taking advantage of what a food pantry and other social programs can offer.
If you feel you were wrongly cut off from your benefits, you can appeal to the state to ask for them back. Just because you now “should” have the income to buy food doesn’t mean you do, especially with all of your health issues. If you would like to appeal, make sure you do so within 90 days of your loss of benefits, and follow your state’s procedures. Each state has different appeals processes, so Google around to find yours. Good luck with whatever you decide, and do take advantage of the food pantry!
Dear Pay Dirt,
I recently bought a home, and my partner moved in with me. For various reasons (COVID-related layoffs, better credit score, uncertainty about our future, having money to put towards a down payment, etc.), the house is only in my name.
She has been paying half of the mortgage, while I pay most of the utilities, because my salary is higher. She had also purchased some items for the home and put in more sweat equity than I have by building out the deck, setting up a shed, and some other projects.
What happens if we split up? What’s the right way to handle it, both legally and morally? Is there anything I should set up to protect her if I pass away or if we break up? We are not married and do not have any official domestic partnership, and our state does not recognize common-law marriages.
—My Partner Is at Risk Here, Right?
Dear Partner at Risk,
Your partner is, indeed, at risk. Not only is she paying half of the mortgage, but she’s also putting a lot of work into your home. Yes, your home, since her name isn’t on anything. Plus, you mentioned there is, or was, uncertainty about your future, which makes things even murkier. I am glad, however, that you wrote to us at Pay Dirt and asked about the legally correct and moral plan to make in case you were to break up or something were to happen to you.
Your best course of action is to obtain a quitclaim deed. A quitclaim deed would allow you to add her name to the title so that the house would be in both of your names. This is commonly used when transferring property to family members. It can also be done when one wishes to add a spouse to a home that they purchased before they were married, but you can still do this to protect her, even if you aren’t ready for marriage yet. A quitclaim deed doesn’t affect your mortgage, so if you guys were to break up, you would still be financially responsible for that. You’d also need to figure out how to split the property.
That’s the legal side of it. But I would be careful, and think long and hard, regarding whether you want to add her to the title of your home. As you mentioned, there are reasons the house is only in your name, and not hers. I think the best idea would be to sit down and talk to her and found out what she wants. She may have a different opinion than you on this matter, and may have a solution you haven’t thought of. You may find out she’d be perfectly happy to take the risk that she may one day walk away, or would like to see about refinancing the mortgage. You won’t know unless you ask.
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