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 minor child does some work as an actor and files a tax return yearly. This year, his refund check was stolen and deposited in a bank several states away (the Department of the Treasury sent me a form to fill out and included a photo of the deposited check. I’m also pretty mad at the bank in question, since, on top of everything, it was a very sloppy job of forgery). I filled out the form the Treasury sent, reporting that he didn’t get his refund, and mailed it off but I don’t know if I should be doing anything else.
Should I report this to the bank that deposited it (it’s a major one)? Do I file a police report and do I do it where we live or where the money was deposited? I don’t know if the check ever actually made it into the mail, so I don’t know if I’m supposed to report it to the USPS. I have tried Googling, but most of what I get is about identity theft—people stealing the tax refund by filing a false return, not stealing a check after it’s been made out to the correct person and the correct address (in fact, this year, the IRS actually made me call in to verify my child’s identity before they sent out the refund). I understand the Treasury should replace the check, regardless of whether they find out who stole it, but I am unsure if I should be doing anything additional or if that will just complicate and delay. And how long do I give the Treasury to take action before I need to follow up with them?
—Super Angry on My Kids Behalf
Dear Super Angry,
I would be super pissed too if this happened to my kid. You didn’t mention if the check was cashed into a checking account someone opened on behalf of your son or if they deposited it into their own—each situation is a bit complex to answer. Every financial institution has different requirements when it comes to endorsing a check for a minor. They might have written “pay to the order of” and then signed their name but it’s odd the bank didn’t inquire who the child was in relation to them if they used their own account. Most banks, if not all, ask that a parent or guardian be involved in the account that involves the child in question.
Your first step is to call the bank where the check was deposited and ask to speak to their fraud department. Explain the situation and ask them how this happened since they allowed the check to be endorsed without any proven relationship to the child. Check to make sure that there isn’t a new account opened on behalf of your child and if there is, close it. There are supposed to be procedures to prevent fraud and it sounds like a mistake was made here during the transaction. I would definitely be following up on this matter at least once a week until it has been taken care of.
I’d also call your local police and ask them how you would go about filing an identity theft charge. They may refer you to the jurisdiction where the crime was committed but get paperwork filed. Although you didn’t mention it, I would also do a check with all three major credit bureaus to make sure that any lines of credit or accounts weren’t opened fraudulently in his name. Just in case, I recommend a freeze on his social security number. This will stop any new accounts from being opened and will flag unlawful activity. You can lift the freeze later on.
Dear Pay Dirt,
This may be a silly question. This is a second marriage for both of us, and we’ve been married 20 years. We both have outstanding credit and no major debt or expenses. In our first marriages (eons ago!) each of us purchased homes with our then-spouses; him in Arizona, me in California. This was almost 35 years ago. Are we eligible for first-time buyer programs either as a married couple or as individuals?
—It’s Been a Loooong Time
Dear Looong Time,
I’m happy to say that it looks like you guys can possibly qualify for a first-time buyer program. It depends on each individual program but most just ask that you haven’t owned a home in the past three years or have some other exception. Since you guys last purchased almost 35 years ago with your previous spouses, you should be in the clear. First-time buyer programs can help those with credit issues (which you don’t have) but are also there for people who need assistance with a down payment. Now go buy your new dream home.
Dear Pay Dirt,
I’m in my early 50s I have recently been promoted at my job, which came with a significant raise ($62,000 to $95,000). I have a decent 401(k), a couple of other small investments, a more-than-decent cash nest egg, and have no interest in changing my lifestyle to match my new income. So what to do with this money?
The obvious idea seems to be to start an IRA or some similar investment, but this is where I’m hesitant. Due to this market I’ve been watching all of my investments lose value, in fact, my 401(k) is down 15%. Does it make sense to invest now, knowing that the value will almost certainly drop as soon as I open it, or am I better off to let my cash accumulate until things stabilize?
—What to Do With This Raise
Congratulations on the promotion! I understand the hesitation toward investing in today’s market. It’s hard to watch your portfolio tank and then want to throw more money into it. It’s harder for those of us who planned to retire soon, which doesn’t seem to be your situation. In fact, I’m going to assume you have another 10 years or more before you retire. With that in mind, I’d invest in the IRA or open another type of brokerage account.
If you have adequate time to ride out the dip in the market, it’s OK to invest. By investing now, you can purchase shares that you might not have been able to at the price they were once before. It’s a great time to be able to cash in on a significant investment without paying as much as you could have if you tried to get in at an earlier time. If you’re still hesitant, you can consider other investment vehicles. Options that are low risk include treasury bills, bonds, and fixed annuities.
Dear Pay Dirt,
My husband and I are in our 40s, with two elementary-age kids, and we’ve been together for a long time. We are both terrible at managing money. My husband does more of it than I do, but even he does the bare minimum to make sure monthly bills are paid on time. Despite this, we’re actually in quite good financial shape because we bought into the housing market back when it was still somewhat affordable, and because we have fairly high income, live in a low cost of living area, and have relatively modest aspirations. So we spend substantially less than we make in an average year.
A few years ago we met with a financial planner, which helped with some of the big stuff . We now have actual savings and investments, rather than letting hundreds of thousands of dollars sit in a checking account, for example. I’m not too worried about retirement, college, etc.
But we’ve never done monthly budgeting, and have no idea exactly where most of our money goes. For 10 years, we were living in a shabby house that we both disliked because it was in a neighborhood that we do like. The mortgage and property tax payments were quite low, and we have no other debt, so we’ve gotten used to having a ton of disposable income. We’d take expensive vacations on a whim, spend weekends in the nearest big city, buy artwork, write checks for $5,000 or $10,000 to cover a friend’s medical bills, or support a charity event without a second thought.
About a year ago, we bought our “dream house” and we now have a $400,000 mortgage. We got a super low-interest rate and we have $300,000 in joint income, so we’re not house poor. But the monthly payments are three times what we are used to, and of course, we’ve got inflation on top of that. We’re incredibly privileged, but I think we need to start to budget. I don’t want to end up not being able to keep helping friends or donating to charity, or not being able to do things we really value, because I’m buying too many fancy groceries or just bought a cool vase.
My husband thinks we’ll cross that bridge if we come to it, but I want to be proactive. The financial planner just laughed at us when I told him I couldn’t even guess what I spent on groceries, so I don’t think a planner is the answer. Is there any way for a 42-year-old to learn good money habits?
—Small Town Big Spender
Dear Big Spender,
It’s rude that the financial planner laughed at you. I’m sorry that happened, I’m sure he didn’t think it was a big deal but it is if you’re trying to better your financial future, and even potentially giving him money to invest on your behalf. Don’t let him make another cent off of you. There are tons of ways for anyone to learn good money habits and today is a great day to start. I love budgeting because it tells your money where to go and not the other way around. So, it’s possible to buy a cool vase, or random items at Whole Foods, and still, help a friend with a medical bill.
First, find a budgeting system you like. The budgeting system will depend on how much time you want to spend analyzing your spending, how strict you want to track your cash flow, and what’s most important to you. The 50/30/20 Budget allows you to put 50% of your income toward your needs, 30% of your income toward your wants, and 20% toward savings and debt. It’s pretty flexible for someone who hasn’t budgeted before and wants to just have some sort of order when it comes to their money.
If you’re really wanting to figure things out and be strict enough to ensure you’re hitting all of your goals, consider zero-sum budgeting. With this budgeting method, you assign every dollar you bring in a job and put it towards a designated category. You could even have categories like “sunshine fund” where you put money aside to help loved ones or “fancy vase fund” so you can randomly buy stuff at Target. Either way, figure out your cash flow to make sure you have enough to cover your bills and emergencies, then go from there. There is also software out there to help with your budgeting needs like Mint and You Need A Budget (YNAB). Good luck!
My husband got laid off during the pandemic (he worked in the travel industry) and went into a full-bore, midlife crisis tailspin. We’re in our mid-30s and I guess he came to the conclusion that he hated many aspects of his life. His response has been to make noise about starting a restaurant. He seems genuinely excited about the idea of building a community space, hosting group events, and helping people connect over food. I love that he’s so excited and passionate about this—honestly, more animated than I’ve seen him in years. But Prudie, I think this is an awful idea.