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’m a first-generation American, but my parents come from a culture that prioritizes sons and expects daughters to care for their parents in old age. Throughout my childhood, my parents made it clear that my brother was preferred, and my brother bullied me and encouraged his friends to also. He currently lives near our parents and they provide child care when he has custody. He’s very interconnected with them, while I live an hour away and keep them all at arm’s length. Since they prefer to communicate through him rather than directly, this is easy.
I currently live a life that makes me really happy, with wonderful in-laws. After years of trying, my husband and I are finally expecting a baby, a fact that I have not mentioned to the family. Recently, my brother called and demanded I take up his child care starting in November since our parents have given him notice that they are aging out of that work. I politely refused and told him my baby would be due then.
He told me that I wasn’t “allowed” to have a baby because my job was to care for our parents, that my husband would leave me when he learned I was such a cold and terrible daughter, and that I am too old to be a mother (I’m 36). He also told me that our parents have absolutely no plans or savings for old age and that it is my job to take care of them, especially because I work a higher-paying job. Part of this might be his anger but I can also see it being true. How do I broach this conversation with my parents and make it clear they need to make some plans that aren’t relying on me? And how do I shake the guilt when these are people who have never treated me well?
—I’m the Retirement Plan
WOW, your family really has some balls. As a second-generation immigrant, I understand tradition typically calls for taking care of our parents as they age and living with them in a multigenerational household. But guess what? We don’t have to. Especially if your family treats you like crap, which it sounds like they have no problem doing. All of the things your brother told you, from being too old to have a baby to it being your job to take care of your parents is an old and outdated way of thinking. And guess what? You’re already doing the right thing by removing yourself from the toxic situation at hand and ensuring your happiness. It also sounds like you finally have support which is great.
You’ve already made it clear that you’re not available for child care, so now is the time to make sure your parents know that you’re not their retirement plan. I would seek out an attorney that specializes in elder law so you know what your next conversation should be with your parents regarding their care. Every state is different regarding being financially responsible for your parents and the division of care between siblings. While waiting for an appointment, read Mom And Dad, We Need To Talk, by Cameron Huddleston. She discusses various scenarios which you may want to implement if they are right for you and your situation.
As for dealing with the guilt? I’d find a therapist who can help you work through the neglect your family subjected you to. Many therapists, especially psychotherapists, can help you realign your way of thinking to where the trauma you experienced will no longer influence your decision-making. Instead, you will react differently to situations like this, which will be beneficial to you in the long run. I’m sending you love.
Dear Pay Dirt,
My friends and I are early 30s professionals living in one of America’s most expensive cities and making middle-class incomes. None of us can afford to buy or save for a home here, we all rent, but we’re not broke. We save for kids and retirement and illness, but a home isn’t in the cards.
Recently, four friends and I have been considering buying a vacation home a few hours away together in a cheaper rural area. There’s a long distance between “considering” and “doing,” but I do my due diligence about purchases. What are the key things to consider in an arrangement like this besides 1) stability of the friendship 2) ongoing ability to meet the financial commitment 3) getting everything (maintenance, taxes, ground rules, etc.) in writing? I’m genuinely interested in trying this when the market cools in a few years, and I want to think through the financial mechanics first.
—Togetherness in 2025
I love the idea of buying a vacation home with friends, but I do agree you need to do your due diligence before getting started. A lot goes into buying a home and doing it with others, even if they’re close friends members, adds a whole extra value for caution.
Discuss who will all be on the mortgage and if their credit will allow them to qualify for the mortgage itself. There’s technically no legal limit on how many people can be on a mortgage, but typically four people is the max on most. However, some lenders will consider more since there are five of you. Your finances will be reviewed, looking for criteria such as income, credit scores, current debt, and employment. So, if your friends have a less than subpar credit score, or lack in these areas, they’ll need to work on it over the next few years.
Note that a joint mortgage does not mean joint ownership. Make sure everyone’s name is on the title and deed, so there is no confusion about who owns the house. You might also want to consider what kind of shared ownership agreement you want. Joint tenancy allows everyone to have an equal share of the house and is strict about the right of survivorship—if one of you dies your share is passed on to the remaining parties—and financial responsibility. Meanwhile, in an agreement like tenancy in common, if one of you should pass away, your share is left to your heirs and may need to go through probate.
I’d also speak to a real estate attorney. Different laws in every state discuss how property should be divided in case one of you can no longer keep the financial commitment. You’ll want to make sure everything is as straightforward as possible so there is no confusion as to how things will work so your friendship won’t be damaged.
Dear Pay Dirt,
Seven years ago, I bought a house with my best friend—joint tenants with rights of survivorship. She is on the title/deed, while I’m on the title/deed and mortgage note. Everyone assumed it would blow up eventually and warned us against buying a house together, but it’s been great. Two years ago, my then fiancé moved in with us and contributes to the house joint account in the form of rent. We married a few months ago. I make significantly more than my friend (more than twice what she does—think $100,000 to $40,000). When buying the house, she and I discussed that we would agree to sell if either of us wanted out and split the proceeds equally between us.
I am anticipating a windfall soon, in the amount of $500,000 to 2 million range after tax, depending on how the estate is divided. I would like to get a house with just my spouse and myself, but I also want to make sure my friend is provided for and I don’t leave her hanging out to dry. I would like to pay off the house in full (we currently owe $100,000 remaining on the mortgage—the house is now worth about $250,000) and also remove my name from the title/deed to leave her as sole owner of the house. I would like to leave some money in our joint account for property taxes, etc., for a few years. I just don’t know how best to do that. Most of the documentation that I see concerns how to transfer property between family members via things like quitclaim deeds or warranty deeds, but she and I are not related.
Can I do a quit claim in favor of someone who is already on the deed? Is the money in the joint account considered a gift? Is paying off the house and leaving it to her considered a gift (and requiring gift tax?)
—Trying to Do Good House Deeds
Dear Good House Deeds,
What an amazing thing to do for a friend! You can use a quitclaim on a house with someone already on the deed who is not family. The quitclaim is also convenient when you’re gifting the property and want a more effortless (and cheaper) transfer. It’s most commonly used between family members or while divorcing, but it will work for this situation as well.
Since taxes are nothing to mess with, I would consult a tax advisor before you go further into planning. According to the IRS, gifts can be excluded from tax if they are not more than the annual exclusion for that tax year. In 2022, the amount will be $16,000. However, since you are married, you can give up to $32,000 without being subjected to the tax. Property transfers are also subject to the gift tax if you are a donor and do not receive anything in exchange. Again, be sure to talk to a tax advisor to ensure things are done correctly and nothing comes back to bite you because you forgot a step.
Dear Pay Dirt,
Our daughter has started her freshman year of college so life is definitely changing. She is a very responsible young lady, who worked as a soccer referee and a lifeguard, at her own choosing, to make money during high school. She saved a significant amount but also ended up paying for things we would have gladly covered (yearbook, prom tickets, etc.). We tried to keep track of these things and pay her back.
We are fortunate in this crazy time that our debt is limited to our mortgage and one car loan. We use a rewards credit card and pay it off monthly. We both contribute to our 401(k)/403(b) plans and are not planning retirement for at least 10 more years. Her undergraduate should be loan free, with a 529 plan, a grandparent Coverdell, and significant scholarships.
My wife and I have discussed whether we wanted to send her a regular allowance or to have her open a credit card to build her credit. We would pay the credit card off every month and agree to a monthly expected limit on her expenses. We don’t want her to dig into her savings (I am actually encouraging her to move a small percentage of her savings into Series I bonds, due to the return they are currently realizing).
Is it better for her to have a credit card that has a low limit and we pay every month or for her to just receive an allowance we put in her bank account? Are there other financial moves we should be making with her at this time in order to help her realize a stable financial future?
—This Was easier When I Was a Freshman
Since it sounds like she already has significant savings attributed to proper money management, I would go for the credit card option. It’s essential to start building her credit as soon as she can. Your credit score can affect anything from financing for a big purchase to getting an apartment when she moves out on her own post-graduation. A great option to help her build her credit card habits would be a student credit card. These are not only easier to apply for but have benefits such as cashback and discounts to stores.
Either way you choose, make sure she understands how budgeting works. Budgeting is one of the basics of personal finance that sets you up for everything else that will come your way. Since she’s in college, I’d recommend finding a budgeting app she can use for ease. Try Copper, Toshl Finance, or PocketGuard.
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We have a 7-month-old, and I stopped working because we felt that day care was too risky due to the pandemic. Now my husband is the sole earner, and I’m home with the baby all day. He typically comes home and watches the baby for an hour while I quickly get some chores done. But then he gets on Facebook or takes a nap or works on music. Meanwhile, when I ask him to do the dishes, he only agrees on occasion—with a big sigh and some eye-rolling.