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 and I have been together for 23 years. We met at a startup and he found a clever way to start the business he still runs today. Not long after, I joined the company where we worked together for almost 15 years.
The problem is, outside a handful of good years, the business is a zombie. It produces a very modest income and despite general plans for a future payout, there is no measurable progress. I am fed up and exhausted from being the breadwinner. Six years ago, the strain of running a struggling enterprise while starting a family (our kids are now 7 and 9) was way too much for me. We moved back to my home state. I found a good tech job that I’ve been excelling at. While my salary is pretty good, my income covers the vast majority of living expenses (rent, groceries, health care, child care, etc.), so there isn’t much left over.
We live within our means and have managed to build some assets, but I’m very worried about shouldering our future financial stability. Our parents will likely need support that we currently aren’t able to offer. We are exceptionally fortunate to have the resources to create stability. I’m frustrated that my husband says he wants to contribute much more but hasn’t done anything different to make that happen.
My husband has a master’s and doctor’s degree in business administration, so in theory, has the tools to run a business. I suspect he is drastically over-valuing the sunk cost of having stayed the course for so long. He won’t commit to a business plan with milestones that, if they are not meant, mean a course correction is needed. I’ve tried talking with him. But he either becomes defensive or doubles down on a vague idea that things are somehow going to turn around. He clearly isn’t happy in his current situation, but either can’t or won’t make any changes. How do we move past this?
—The Only Way Out of a Hole Is to Stop Digging
Dear the Only Way Out,
It’s likely that your husband is in denial that the business isn’t working because admitting it would feel like failing to him, especially since he started the business himself. It is not, of course, and it’s rare that any business works indefinitely, but a lot of entrepreneurs build their self-esteem around that identity. Your husband may have trouble letting go of the idea that his business is going to be more successful than it is now with just a little more effort.
As a result, he needs someone to help him see clearly that continuing to do this will only result in more of the same, and that person is probably not you, even though you also worked in and understand the business. One way to address this is to have a discussion with a financial planner about long-term expectations. A disinterested third party can tell him that his projections for future income are unrealistic in a way that you can’t, and he won’t view it as a failure to be supportive in the way that he might if you, as his spouse, made the same critique. Outside business consultants often serve the same purpose.
It is also important to emphasize to him that a continuation of this situation is creating stress and burnout for you. This is not something that just unilaterally affects your husband; it affects you and your relationship. It’s unfair to put all of the pressure to provide financial stability on you.
If he does not have a concrete idea of at what point he’d consider an alternative and shut down the business, ask him to define that. What does he think constitutes success? What does failure look like for him? Part of managing a business is knowing when it’s not working, and that means having specific metrics in mind to measure success—and conversely, failure. What’s the lower threshold for him? Four straight quarters of declining revenue? Flat revenue? Declining profits? If he’s an MBA, he probably already knows this; he’s just not applying it.
Lastly, it would probably help your husband get out of his state of denial about this if he had something else to get excited about. Especially for people with an entrepreneurial bent, it’s easier to call it quits on a business that isn’t working if you have an idea or opportunity to pursue a new one. If your husband hasn’t thought about this, part of his reticence may also just be that he has no idea what to do next, and the lack of a clear direction makes him nervous. This is something you could discuss. If continuing the business wasn’t an option, what could he do that he would genuinely enjoy? If you can get him thinking about that question, it may help him move on.
Dear Pay Dirt,
I love my roommate (a longtime friend). I work the more demanding job by far and she’s wonderful about picking up on those household chores that I can’t get to. I cook dinner and we eat together; she is a companion when we’re in the mood and we give each other needed space. In general, the situation couldn’t be better! Just one issue: On our moving day, she informed me casually that she didn’t have enough money to cover her half of the first month of rent (or for our moving truck and movers). I was baffled.
She didn’t even really ask me if I would front her; just assured me it would be paid back. What would she have done if I couldn’t? I covered the next two months, as well as utilities, so she could find a job/build savings, before telling her it just wasn’t feasible any longer. I was literally going to run out of money. She said she’d earned enough that she could manage it going forward, showed me her detailed record of what she owed me, and promised she would start paying it back ASAP. And she has…in small increments—$25 here, $50 there, but we’re talking several thousand dollars. I need that money.
I’ve brought it up with her several times; she tells me her mother is going to help her with a budget, or that she’ll give me her tax return. But it’s been 10 months now. I need the money. I’m not sure how to address it more or differently than I already have—I’ve set boundaries and suggested timelines—and it’s just so out of character for her! She hasn’t done anything like it before or since. I don’t know what went wrong, or where to go from here.
—She Owes Me One (Or Two or Three…)
Dear She Owes Me One,
Your friend owes you an apology for not telling you she couldn’t cover rent, waiting until moving day to tell you, and putting you in a position to have to cover her. That should have never happened.
But it did, and you loaned her money. So, here I will give you some recurring advice in this column: Never loan friends or family money without being prepared for the possibility that you may not get it back. That said, it sounds as if your friend does intend to pay you back but is paying her current rent paycheck-to-paycheck, in which case, no amount of bringing it up with her is likely to fix the problem. She will need to either get a better-paying job or figure out a way to earn some extra income on the side.
If she does actually have the money, or is spending money she could be giving you on things that aren’t necessities, then you need to make it clear to her that you need to be paid back as soon as possible and that not having the money is affecting your own financial security. It’s a good sign that she’s keeping detailed records of what she owes you because it implies that she’s not planning on taking your money and hoping you just forget about it, but she may not really understand the sense of urgency you have about getting it back sooner rather than later, and why.
One thing that might productively create some movement in the right direction would be to ask her how you can help. It’s not your responsibility to do that, of course, but it sounds like you value her as a friend, and don’t want to damage the relationship. If she’s having trouble budgeting, offer to help her. See if you can get her to agree to a payment schedule for an amount that’s doable for her, given her income. If nothing else, you’ll get more insight into why she hasn’t paid you back already and what the probability of her doing it soon is.
In the worst-case scenario, you can go to small claims court and they will likely issue a judgment against her, in which case, she is legally required to pay you back and that may include steps like garnishing her salary. It sounds like you don’t want to nuke the relationship, so I wouldn’t recommend that if you can avoid it, but I feel obligated to mention it because it is a real option. For both of your sakes, I hope it doesn’t come to that.
Dear Pay Dirt,
My father died almost three years ago when I was in college and my sister was still in high school. Both my sisters and I always had issues with both of our parents, who divorced when we were young. For our father, it was the fact that he expected money to replace any type of quality time. My mother had her own serious flaws, but she was very loving. She has also been married and divorced three times. My father tried to keep up a relationship with us, but in the years before his death, his behavior became very strange. I now suspect he may have had undiagnosed bipolar disorder. Before that, he was incredibly good with his money and planning.
After that, not so much. He destroyed every version of his will before he died. I’m still not sure how, but my mother ended up getting his house. I was a 20-year-old college student at the time and my sister was 16, so neither of us wanted to press the issue. He left us with very little besides our college savings accounts. He, however, has always indicated that he wanted us to live in that house because he loved it so much and did a lot of DIY projects to make the house truly amazing. My mother has since gotten engaged. When I brought up getting the house in our names to protect it after she dies or in the event of another divorce, she shocked me when she said it would be her home with her new husband and he would be inheriting it. She wouldn’t even consider a prenup because “this one is different.”
I don’t even know where to start legally. I don’t know how she got the house, but I do know that we had to sign some papers with a lawyer, a friend of hers. The lawyer insisted that my mother somehow had a right to the house because of something to do with the mortgage, of which there was still a tiny bit left over when he died. My mother has since paid it off. I didn’t think twice about any of this, but a friend of mine says it should be suspicious that the lawyer brushed off the fact that my little sister said, in his presence, that the father had always wanted his daughters to have the house. We have plenty of witnesses to this effect.
I know I need to hire a lawyer, but I don’t have enough money for a lengthy legal battle. I could maybe pay for legal consultation and would prefer to go to my mother with what the lawyer tells me. I really don’t want to sue her. Do you have any advice on what I should do right now?
—House of Trouble
First, I think you should go ahead and tell your mother that you and your sisters believe you have a claim on the house and that if she intends to go through with her plan of leaving it to her new husband, you’ll consider hiring a lawyer to see what those claims might be. That said, if she legally owns the house outright, for any reason, it wouldn’t be unusual for her to leave the house to the new guy, simply because that’s pretty standard when you leave a spouse behind. What may be more relevant to you is where the house goes once they’re both gone.
Second, if your father really had no will, and there was no documentation of any sort, the standard procedure is that assets are split between the surviving spouse and the other heirs (which would be you and your sisters.) The formula varies from state to state and would take into account things like your college savings accounts, and the value of the house.
Regardless, you need to know what you signed off on with her lawyer when you were younger. I find it unlikely that the courts would consider your mother the only distributee in the absence of a will. So you need to track down that paper trail, and you will likely need to hire an estate lawyer to do that.
But first, I think you should ask your mother to explain, in detail, how she got the house. If she’s honest with you, then you will better understand what your remedies are, and it may help her realize she’s being unfair to you and your sisters. If she’s evasive or cagey about it, I think it’s reasonable to tell her you intend to hire legal counsel and are going to find out one way or another. What she does then is up to her.
Dear Pay Dirt,
My older sister was a perfect angel and star student, who won awards for her writing from elementary school on, and everyone thought she was going to set the world on fire. Our parents paid approximately $300,000 for her to attend an expensive private college and an even more expensive master’s of fine arts program. All for her to become a poet who has produced three books in 16 years. Her latest book was published a year ago and still hasn’t sold out its print run of 1,200 copies. She taught college writing classes until she married a wealthy man, whom she is now completely supported by. She has no children and doesn’t seem to want them.
Meanwhile, I suffered from undiagnosed ADD and struggled in school. After graduating high school with a low GPA, I went to community college, which I’m grateful to my parents for paying for and became a dental hygienist. I make enough to live on but not enough to save for a down payment on a home. My partner of eight years is a disgracefully underpaid EMT. We would like to be able to get married, buy a house, and adopt a child or two. I’m sure my parents will leave their estate to me and my sister equally, but they are only in their early 60s and, fortunately, in excellent health, so by that time my partner and I will most likely be too old to run after a little kid and may be too old to even be considered as adoptive parents.
Would it be reasonable to ask them to give me the cost of my sister’s education, minus what they’ve already paid for mine, in order that we receive equal help from them in starting our adult lives, and I and my partner can make them grandparents, which I know they want?
—Jealousy or Justice
Dear Jealousy or Justice,
My general recommendation is that all heirs are treated equally when inheritances are distributed because inheritances are not intended to remedy life choices made by children that have different financial outcomes. If your parents could afford to pay for your sister’s fancy education, they would have probably sent you down the same path if you, too, wanted to be a narrowly published poet—though I feel obligated to point out here that getting three books of poetry published is a real accomplishment if you’re a poet, and a 1,200 print run is pretty standard. Poetry doesn’t sell like James Patterson novels… At any rate, your sister chose a profession where no one makes a lot of money and got lucky when she married. There’s nothing wrong with that.
There’s also nothing wrong with choosing a profession that offers more financial stability, foregoing the graduate degree, and marrying someone who has a relatively average income. But these were your respective choices.
There’s no harm in asking your parents for help if you think they’d be amenable to it, but this should not be about your sister, who you seem to want to punish for making different choices than you did. You do not want to go down the road of determining who your parents did more for—and what parents do for individual children goes far beyond subsidizing a college education. It may be that your sister thinks your parents gave more attention or effort to you, and you’re unaware of it. This is not something you will ever be able to truly quantify and trying to do it is a recipe for a ruined relationship. You can ask your parents for help, but not with the insinuation that they owe you the cost of your sister’s education. You should leave your sister out of it entirely.
My family is involved in a certain amount of charity and volunteer work—both locally (visiting the elderly, making food for people suffering from illness) and on a larger scale (charity projects, attending rallies). I’ve never forced my children to participate, but I make sure they know what I’m doing and why, and I encourage and praise them when they decide to get involved. But it’s made me realize my child might be selfish.