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 met my now husband of over 20 years after I had bought my home. I am a visible minority immigrant while my husband is white, blond-haired, and blue-eyed—essentially the picture of the typical successful male. He is an amazing friend, partner, and awesome husband, and although he came into the relationship with financial baggage (medical and credit card bills etc.), we have worked hard to eradicate those and have used my first home as a stepping stone to upgrade to bigger and more expensive property.
We now own acreage, put our kids through private school, and recently bought a second property that our kids are using and paying rent for. The issue is that my husband’s family is under the belief that our financial situation is due to him alone (he’s actually bad with money management) and despite his efforts in my presence to disabuse them of this notion, they still act entitled to what we have and allude to his success often.
Now, a close family member of his is becoming homeless in their old age, with no retirement savings and they have dumped this quandary on his lap. To make matters worse, we have a massive home with lots of room and can easily accommodate this family member and I don’t want to see them homeless. I am terrified that once they come in, they will claim part ownership through him, and especially if something were to happen to him (heaven forbid), I am worried they will put up a fight to claim part of his estate on the grounds that he brought us to where we are. Should I prevent this move to head this off? If not, what else can I do to protect myself and my four children? (We have a will already, but it will not stop a court battle if they want to go that route.)
—Entitled and Misguided In-Laws
Dear Misguided In-Laws,
It sounds like you have two different problems here. One, you’re about to let a family member you don’t trust reside in your home, and two, your husband’s family needs some boundaries.
First, express your concerns to your husband. You stated you don’t want this family member to become homeless but you’re also fearful about their true intentions. You have every right to protect your own family financially, including being cautious about whom you let into your home, and what type of financial support you are willing to provide. While you’re at it, look into creating a trust. In your trust, be sure to describe how your house should be inherited if anything happened to either one of you. Make sure to state that his family is not to inherit anything. While wills and trusts can both be petitioned in court, they serve different purposes and can add another level of security to your family’s affairs in case he should pass.
If you do agree to let this person into your home, your first step is to book a consultation with a real estate attorney so that you can work with them to draw up a lease agreement. Make sure all terms and conditions of living with you are clear from the start and written in a legally binding contract. List that while they may not be paying rent, they are still responsible for things like property damage and may be asked to vacate the property if the living arrangement is no longer a good fit. You can also state in the lease that although they may live there, they have no claim to ownership of the home and list out proper steps in case one of you were to pass away.
Next, your husband needs to set hard boundaries with his family. He needs to make clear that moving forward, your family’s financial success will no longer be up for discussion. You may never get them to acknowledge your role in their son’s success. It sucks. But with this new boundary, they will at least stop discussing it. He also needs to make clear that while they are family, it is not his family’s job to support anyone financially, in any manner. Your husband does not owe his family an explanation. If it comes up in future conversations, he needs to immediately address it and if it continues, remove himself from the situation. Boundaries are hard but his family will eventually get that you guys are not a cash cow. Good luck.
Dear Pay Dirt,
My husband and I (late 30s) own a successful small business that bounced back from a rough pandemic year and is doing better than ever. I feel like we are doing the right things on paper—we have increased our 401(k) contributions, have no credit debts, own a nice home, and provide healthy incomes for our small staff.
But our finances are a mess. I am the owner, manager, HR, customer service, AND accounting. The busier we get the less time I have for the latter. Also, neither my husband nor I have any semblance of experience with accounting. The business is set to grow by about 25% again this year and somehow our business accounts just tread water. We always have money for our payroll and bills and taxes, we just aren’t banking any profits no matter how busy we get—and we aren’t living extravagantly (think practical used cars, public schools, secondhand clothes, and toys).
It’s demoralizing to put in the hours I do in managing everything on busy weeks and months only to see the bottom line stay the same. I’m having trouble reconciling the big number on the gross receipts we are bringing in with how stretched the cost of my daughter’s dance classes makes us feel. I want to get an accountant involved but how do we even pay one with the situation as it is?
—From Treading to Swimming
Dear Treading to Swimming,
How frustrating! I know how hard it is to make a profit once both business and living expenses are paid. In order to come up with cash to pay for an accountant, you’ll need to cut expenses or earn more. Every individual situation is different, but in your case, I would look into seeing what I can cut.
Look over your business expenses to see if there are any services or subscriptions that your company isn’t taking full advantage of, then add them to the chopping block. Next look at services you are utilizing but could do without, such as hiring out a cleaning service. Consider taking out a personal loan for your small business or yourself to pay your accountant upfront to get started. Your accountant will most likely clear up your financial situation while helping you make the money needed to pay back your loan as well as their own salary. You can find an accountant who fits your needs through Tax Professionals, an online platform that helps match you up with an accountant in your area with the experience that you’re looking for.
Dear Pay Dirt,
I’m 19 and I don’t want to have debt. More than anything in my life I value my freedom, and the ability to do what makes me happy. Nothing makes me more miserable than being tied down to something like debt. I want to avoid having to pay things off or being stuck in that not enough money loop.
I’m hoping to be my own boss someday and own a business. Specifically, tattoo art which I already have a bit of experience in but haven’t seriously started to make money off of it and make my day job. How do I do things right, upfront, and cut out all the miserable debt? Is it realistic for me to never need a loan excluding true emergency situations? I know nothing about money and have no one to teach me. I don’t know what’s realistic online and what’s just clickbait.
—Sink or Swim
Dear Sink or Swim,
Kudos to you for being 19 and wanting to make sure you’re starting your financial life out on the right foot. Many of us make mistakes with our finances until we’re much older which can set us back on our personal goals. It’s very well possible to live a life free of, or with, only occasional debt. It won’t be easy but once you figure out a financial strategy that works for you, the sky’s the limit. A website I love—that’s not clickbait—for Generation Z is Money Under 30. They address topics such as opening up a checking account for the first time or how much you need to save to hit different financial goals. I do write for the site from time to time but I find it useful for overall information when just getting started.
First, if you haven’t already, figure out a budgeting system. The way to avoid debt is to have adequate savings. An emergency fund is a specific amount of money saved to cover you when you need it for things such as car repairs or tattoo equipment that breaks down. You might not always have enough money saved for an emergency that comes up, like a medical bill, but you’ll at least have enough covered for smaller ones instead of having to put them on a credit card. In order to save, you’ll need to figure out a budget.
There are a ton of different budgeting systems that you can utilize such as cash envelopes or you can even download an app straight to your phone. Sit down and realistically go over your expenses to ensure you have enough income coming in to cover your bills. Write out a list of things you value, such as perfecting your art and staying debt free, then write a list of stuff you don’t value so you know not to spend money on it. This will allow you to see what categories you realistically need in your budget besides your bills, like saving toward an emergency fund. Anything that seems unnecessary you can get rid of.
Since you’re not rolling in the dough with your art yet, find a flexible job that will cover the stuff we mentioned above while allowing you space to work on your craft. You need to be as smart as you can with your time so you can invest in yourself and your career. If you haven’t already, find a great artist you can apprentice for to get started. The more skillful you become, the more you can charge. As you work your way there, you can network, and show off your art on social media like Instagram and TikTok. Figure out what it takes to make a name for yourself in your current art scene. It will take time to establish yourself but I know you can definitely do it. I’m cheering for you.
Dear Pay Dirt,
I’ll say it straight out—I have an embarrassing number of credit cards. Between my partner and I, we have 11 cards, including store cards, cards that earn airline miles, and cards that earn other types of rewards. I have little excuse—just accepting a lot of offers for various reasons. And we don’t use a lot of the credit, we’ve kept the utilization under 15%, which has helped boost my credit score a ton. The thing is, if we don’t use the cards every so often, the bank closes them and that hurts my credit. It’s just a lot to keep up with (and multiple annual fees that we shouldn’t waste money on). So how do I go about cutting them back without hurting my credit? This is the first time in my life my score has been above 750, which has been awesome for my home and car loans.
—Credit Card Craziness
I actually know a lot of personal finance creators who have twice as many credit cards as you do. They use them for the same reasons you listed above. My point is, your number really isn’t that embarrassing. You could cut back on the amount you have which would make your utilization ratio go up since you’ll have less available credit. This may affect your score and the type of financial products you’d qualify for. An open credit card can also be your longest line of open credit so you’ll want to double-check what cards you’d like to cut for the least impact. You may also consider keeping a spreadsheet with annual fee due dates so you know when to call your creditors to see if they would be willing to waive the fee to keep you as a customer.
If you’ve decided closing accounts is still something you’d like to do, figure out which cards you can live without. Once you’ve decided which accounts to close, close one account at a time after ensuring the balance has been paid off and all rewards have been utilized. Speak to a representative on the phone and request both a confirmation number and letter for your records. Closed accounts in good standing will reflect positively on your credit report so while your score will go down at first, it will eventually find its way back up.
Recently I’ve been on four dates with an engaging, beautiful, kind, and compassionate woman I met online. She told me she worked at a call center in “customer service,” but as she described her job, I realized she makes spam calls all day, every day, even to people who’ve tried to opt out of her call list. She seems to view it as “just a job,” whereas I think she is actively causing frustration, annoyance, and ill-feeling in the world.