Pay Dirt is Slate’s money advice column. Have a question? Send it to Athena and Elizabeth here. (It’s anonymous!)
Dear Pay Dirt,
I live in a newly built development, and several neighbors and I found ourselves in need of retaining walls in our backyards. We live in a high-growth area, and landscapers and contractors are very hard to come by.
One neighbor had a friend who had a hardscaper he liked and recommended. He was able to start within a month, and based on the recommendation, we all gave him a deposit to buy materials. Then we found out he’s a total scammer—he has set up businesses before where he completes one job and then uses that to convince other people to pay him and then he disappears. In our case, he has about $25,000 in deposits from 12 households.
I am so embarrassed I didn’t look into him more before signing on. I’m wondering if, since I wrote a check to a business that it turns out doesn’t exist, I have any recourse through his bank or some other agency? The police have been less than helpful—they say he hasn’t really broken the contract yet, since he wasn’t supposed to start until next month (never mind that his LLC was fake, he has blocked our numbers, and he never submitted the permits to the town). Any suggestions as to our next steps?
—I Didn’t Even Know This Was a Grift
Dear Didn’t Know,
It’s OK to be embarrassed. Scams happen frequently, even to people who are hyper-vigilant. You also had your neighbor vouch for him, so it wasn’t like you were going into it totally blind.
I would go through your bank and file a claim with their fraud department. Explain what is going on (you wrote the check to a fake LLC and were scammed, etc.) and they should be able to put a stop to the check, especially if it hasn’t been cashed yet. According to the Electronic Fund Transfer Act, your bank must investigate your claim. I would also file a claim with the Consumer Financial Protection Bureau, following the National Consumer Law Center’s rule: Complain Everywhere, ASAP, With As Much Documentation As Possible. There are a few more options on the page I just linked.
Dear Pay Dirt,
Is it better to save or pay off debt if you have a lot of available credit? I have one credit card and if I emptied out about 80 percent of my savings, I could pay off that credit card. I also have another card that has quite a bit of available balance. I also have debt that has gone to collection. Right now, I have a low-paying job, but I also have very few bills. My current job, however, doesn’t allow much for saving. I can save a small amount each month, but not much.
I recently came into enough money to almost pay off my remaining credit card, but I’d have to empty all my savings, and it would probably take me two to four months to save up six months of savings again. I’m unlikely to get laid off in that time. (I have a pandemic-related job and because of that, I know my job is most likely safe for at least a few months.)
The one thing that would help would be if my credit card company took off some of the interest that has built up over the past year. Do you think that is likely? What do you recommend? I don’t think I can make high enough payments to refinance and I know my employment is most likely temporary, so a long-term payment plan wouldn’t work either.
—I Can Fix Some of This, but Not All
Dear I Can Fix Some,
First, it’s great you are taking care of your finances and setting your future self up for success. That being said, I think you need to consider a few things in regards to your situation as you’re deciding what your focus should be.
In this economy, I recommend everyone have an emergency fund. The ideal emergency fund, according to experts, is three to six months’ worth of expenses, which it sounds like you already have. If you don’t, I want you to save until you get there, because of your job situation. I honestly think a lot of people don’t have true job security, but you specifically mentioned having a few months left of your pandemic job—this is good for now, but if that also means that the job might end depending on what happens with the pandemic, you should be prepared.
Continue to pay off your debt while saving to fill up this emergency fund. Once you’ve hit a mark you feel comfortable with, then put your money toward your debt. You can also call your credit card company and ask if they would lower your current interest rate. They will not eliminate previous interest charges retroactively, but this will help keep the new interest from piling up at your current interest rate. You can also look into doing a balance transfer to a new credit card at a lower interest rate than what you are currently paying.
Dear Pay Dirt,
My husband and I are married with three teens. I have a cool, polite relationship with my MIL, who serves as the caretaker for his developmentally disabled sister. She makes a lot of jokes about how she couldn’t possibly bother to make a will because she plans to live to 100. She’s 79 right now and in decent but not great health.
Since my parents died young and suddenly, I very much want her to make a plan for the long-term care and life of her daughter, or at least map out how to pay for it and who will help. My husband, who never got along with his sister, hopes that if he doesn’t speak up, the responsibility will go to his less settled brother and he can contribute monetarily. I find this cowardly, but in addition, we’re currently paying for as much as we can of the two, soon-to-be three, college educations. I don’t know how much we’ll be able to contribute.
Since I can’t move any of the major players in this situation, what financial steps can I take in advance? Are there resources for understanding our rights and responsibilities? Financial tools or experts to keep in mind if MIL does die suddenly without a plan in place?
—Nobody Lives Forever
Dear Nobody Lives Forever,
I am so sorry you are in this situation. It sounds frustrating because your hands are tied, and you can’t control the actions of others.
Since every state is different, I would consult with a disability attorney to check and see what laws apply to you and your husband. I am under the understanding that by law, neither your husband nor his brother would be required by the state to take care of their sister if their mother were to pass. This means both financially and physically, as a caregiver. So, if she dies without a plan in place and your husband and brother-in-law don’t step up, your sister-in-law would become a ward of the state. She then would most likely be placed in a group home with other disabled adults. It’s shitty that your mother-in-law won’t at least consider that outcome. But even then, if she were to create a special needs trust with instructions regarding care for her daughter and it included your husband or his brother, they could legally say no upon her death.
I don’t know the history of your husband’s relationship with his sister, and I understand you want to be prepared, but I wouldn’t push the issue on him. I can only imagine how hard it is, especially with him being shut down about it. Growing up with a disabled sibling can be hard and being forced to take care of them in adulthood can cause a lot of resentment. My dad is currently the caregiver for his sister and I can see how it takes a toll on him. The disabled sibling may also suffer if their care arrangements are inadequate or poorly thought through.
Your husband may feel he is protecting you and the rest of your family unit by not being involved. But this issue is not going to go away. So your best course of action is to consult an attorney and then explain to your husband that you are not expecting him to take care of his sister, but would like him to know what you have found out. Maybe if he were to know he wouldn’t be held responsible, he would help convince his mom to take actionable steps to arrange for her care. Good luck.
Dear Pay Dirt,
My husband (81) and I (71) recently moved from the West Coast to the East Coast and sold our house for more than we paid for our new East Coast house. Our current mortgage rate is 3.25 percent. I think we should invest the high-six-figure amount we got for the West Coast house and continue to pay the mortgage on the East Coast house. Two investment advisers agreed (they have a vested interest, as the money would go to one of the two’s firms).
Our son vehemently disagrees, saying it would be more complicated to deal with if my husband predeceases me, as will likely happen given his age and terminal blood cancer. Also, he is concerned about my memory issues since my stroke two years ago. However, my cognitive abilities are not affected.
—Who’s Right Here?
Dear Who’s Right,
I’m curious as to why your son wants you to pay off the house instead of making minimal payments and investing the rest. Yes, if you put your money into a brokerage account, it is harder to access when a loved one dies and you inherit it. However, I’m assuming you’d be named on the brokerage account along with your husband, and would have no issues with accessing the funds when and if needed. And if anything, by investing the funds into a brokerage account, your money will be making even more money that your son then stands to inherit.
I would continue to pay your mortgage as is. Make sure you consult with an attorney and have all of your legal documents in order, especially if your husband may be gone sooner rather than later. Place everything into a trust, with specific instructions on who gets what, including any investments. I’m not trying to assume the worst of your son, but I want to make sure you’re protected, and he has no ground to argue with you about the arrangements around inheritance.
More Advice From Slate
Our 2-year-old has always been a pretty good eater: She eats a variety of foods and has always eaten a lot. Both at day care and at home, she gets breakfast, lunch, and dinner on a schedule, and we eat together around a table with no screens. Recently, she’s started saying “all done” and asking to get down from her highchair without eating much at all, then periodically asks to return to the table throughout the evening, then weeps about how hungry she is at bedtime. I think this last thing is mostly a stalling tactic. About half the time, though, I end up giving her some snack after she’s in PJs. I don’t want to police her food consumption, but it’s frustrating to keep stopping dinner throughout the night, especially when she “finishes” before us and wants to play, then melts down when we say, “Mama and Papa are still eating.” I also don’t want to send her to bed hungry. How can we fix this?