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 girlfriend moved in with me very shortly after we started dating six months ago. At first, it was a “stay at your place every night” thing—she works in the airline industry and is regularly out of town for several days each week. Three months ago, I bought a house (on a teacher salary, no less!) and invited her to move in with the mindset that her paying rent would help defray the cost of the mortgage.
The issue is, she’s broke. Like, very broke. Like, living paycheck to paycheck while contributing to 401k and servicing debt to family broke. On top of that, she only has a high school degree (never attended college), so her job mobility is lower. Housing expenses are going up next year, and she refuses to entertain the notion of getting a housemate. I’m worried that, by moving forward with her, I’m resigning myself to a life of financial insecurity. Is this an overblown assumption? How can I address this income disparity in a way that is equitable and leads to a positive outcome for me?
—This Doesn’t Seem Good
Dear Doesn’t Seem Good,
I think you have to meet people where they are when it comes to finances. I assume you knew your girlfriend was broke when you invited her to move in, so whatever she’s contributing now should be your baseline for what you can expect her to contribute going forward, barring some career change. There are plenty of careers that pay well and don’t require a college education, but it doesn’t sound like she has any intention of giving up her current job.
So I think you have to explain to her that unless she has a plan to figure out how to contribute more, you need to get a housemate, or you will be broke, too, and it’s not fair for her to put you in the position of shouldering most of the responsibility indefinitely, which you didn’t agree to do. But you should go into the discussion with the understanding that she probably did not sign up to make major changes to her career either.
Regardless, if you want to move forward together, you need to be on the same page about what is fair and reasonable, and a good starting place is giving her a sense of what costs are going to be as interest rates rise, and how that affects your expenses and mortgage. Then, if you want to help and think she’s amenable to it, offer to work with her to come up with a plan to stop living paycheck-to-paycheck and figure out how to pay her family back, or renegotiate a more flexible payment plan with them. If she’s invested in your relationship long-term, this should not be a dealbreaker. If she says no, I think you have a relationship problem that outweighs your immediate concerns about money.
Dear Pay Dirt,
My husband and I have decent incomes, but lots of expenses and debt and just generally are not smart with money. We don’t communicate like we should about our bills or how to get on top of our spending and don’t seem to have the skills to figure it out. We’ve stayed employed through the pandemic and have been able to not go much further into debt thanks to the child tax credits and some lowered expenses due to not having as much to do while trying to avoid catching COVID. But we are at the point where minimum payments are eating up a lot of our income and we just don’t have the skills and discipline to dig ourselves out. I’m actually borrowing money from my teenager’s savings to get me through to the next paycheck when I can pay them back.
I’ve started looking into financial counselors—hoping there is someone who can guide us and straighten us out—but most of the search results seem to be companies that want to consolidate our debt, which I’m not sure is the right choice? The people listed on the websites look like they work for banks and credit unions. Can I not pay someone to be smarter than me and help us manage our money? To convince my husband to give up cable or to tell me what I actually have to spend each month on non-essentials? Or is looking for the easy solution why we are in this problem in the first place?
—We Need A Money Nanny
Dear We Need A Money Nanny,
Debt consolidation is not inherently bad, though there are scammy companies out there. It really depends on what kind of debt you have, and, to some extent, what your credit score is. If you have good credit, it might make sense to use a consolidation loan to pay off high interest credit cards quicker. If your credit is not so great, what you want is something more along the lines of debt management, which will help you figure out how to handlethe debt you have. There are non-profit credit counseling organizations that can help you do this, and you can find a local resource via the National Foundation for Credit Counseling. They will also help you figure out a budget and a long term plan.
You have this problem not because you’re looking for an easy solution, but because you’re overwhelmed by these things and don’t know where to start. Calling a credit counselor is where to start. A good credit counselor will give you specific next steps; don’t worry that you have to navigate all of this alone and with no guidance.
Dear Pay Dirt,
My father passed away several years ago. He really didn’t leave my sister and I much but I planned the entire estate sale since my sister lives out of state and split the proceeds with her evenly. We still have a few large things that could be worth money.
I completely forgot about them until my sister mentioned wanting to take them to use. She also wanted to take the only expensive item we actually sold at the estate sale. She was actually mad that we sold it until she realized she didn’t want it.
I don’t think she should be just taking the expensive things without offering to compensate me for my half, but I’m afraid of bringing this up with her because she always feels like I’m trying to annoy her. She is about to marry into a very wealthy family and we have a wealthy extended family where she lives that are already basically taking care of her.
Meanwhile, I developed a chronic illness that may mean I cannot work and either won’t qualify for disability or will qualify for the worst type of disability which means I can never get ahead in life. I may actually need some of this money.
I also just found a box of my father’s stuff that we never went through with about the same value as the items she wants to take. Should I just sell these and not tell her? Is that even legal?
—I Feel Like Doing Just That
Dear Doing Just That,
You can’t legally just take things from the estate, and neither can your sister. I assume the will has some specific provisions for disbursement, and normally, the executor of the estate would be responsible for making sure that assets are distributed according to the specifications of the will. The executor should have itemized all of your father’s assets, including things like furniture (or “tangible personal assets”), and when you or your sister received payouts from the estate sale, that would be documented by the executor.
It sounds like none of this was done, so I’d recommend that you consult an estate lawyer. Depending on where you live, some of this may have to be sorted out in court, and the process varies from state to state. You may also have some tax liabilities that you’re unaware of, and it’s important to know what they are now.
You should discuss this with your sister, and note that you both need to do all of these things to make sure you’re not running afoul of state and local laws. This will give you the benefit of having a neutral third party to help you sort out who gets what evenly and fairly, in a way that’s done separately from any discussion of who needs the money more.
Dear Pay Dirt,
I am a mid-30s single woman with no kids, and because of my credit score—low 500s—I feel like I am invisible. I don’t qualify for a credit card, I can’t rent a car, I can’t get an apartment without my parents co-signing. I have “modest” student loans—$38,000, that because of the CARES Act have finally come out of collections, but nothing on my credit score has changed. I don’t know where to begin to resolve this, and I feel like I’m failing at life. I’m even embarrassed to seriously date anyone because of my financial status. I work in the restaurant industry in an expensive city, and so even though I make decent money, when it comes down to it I’m still living paycheck to paycheck. How do I get out of this?
—It’s Like I’m Nothing
Dear I’m Nothing,
You are not alone. A lot of people have low credit and debt in their 30s and feel like they’re not self-sufficient enough and are failing. There are nonprofit credit repair organizations, as I mentioned a few questions above this one, that will help you figure out how to fix your credit, but that’s a long-term process that doesn’t happen overnight. It is, however, a good first step.
If you make decent money but are living paycheck-to-paycheck, you’re not making decent money for the city you live in, which is what really determines your quality of life. Nonetheless, I think “just move to a less expensive city” is glib advice, since that comes with its own costs, including potential cost to your career and the loss of your existing social supports–and that’s outside of the literal cost of moving. So your more immediate option is to look for ways to cut back on spending. Can you live with roommates for a while to save money? Can you tighten your budget to eliminate some non-essential things? What can you do temporarily to make your situation more sustainable in the long term?
You do not have to live on a shoestring budget forever, but you do need a plan for getting solvent and starting to build some savings and a financial cushion so that you can feel independent and secure. I don’t think being where you are precludes dating—there are plenty of people in the same boat, who completely understand your situation—but your finances are affecting your self esteem and that affects the way you encounter other people in relationships. The good news is that even getting started on this process will help on that front. Even incremental changes move you toward financial stability, and will give you more confidence.
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