Pay Dirt is Slate’s money advice column. Have a question? Send it to Lillian, Athena, and Elizabeth here. (It’s anonymous!)
Dear Pay Dirt,
I’ve been self-employed most of my career and have no spouse or kids to take care of me in an emergency, so I’ve made a point of being practical and frugal so I can take care of myself. I’ve managed to reach my mid-50s with a net worth of about $800,000. I also have decent health insurance, plus long-term care insurance if I need home health care or to move into a nursing home.
Women in my family tend to live well into their 80s. But my doctor told me this week that while he can’t be definite yet, he suspects the weird health problems I’ve been having for the last six months are caused by a certain illness that has no cure and has an average prognosis of just three to five years. So, now I have to revamp my plans for the possibility that I won’t even make it to 60, and will be increasingly debilitated and need ever more expensive care for most of that time.
I know I need to talk to a financial planner about how to make sure I don’t run out of money if/when I have to stop working. But I keep thinking, “Go do all those things you always wanted to do and visit all the people you love, because this may be the last time you’re well enough to do it.” Is this an either/or, or can I do both?
—I’ll Have No More Bad Days
Dear I’ll Have No More Bad Days,
I’m so sorry to hear about your diagnosis. I don’t think you have to choose. You don’t have unlimited funds but I think you have enough to plan for the care you need and still cross those items off your wish list. A good financial planner will help you do this, and it’s partly a matter of allocating your portfolio in a way that allows it to grow passively and deciding what an appropriate budget is for the things you’ve always wanted to do. Not all of those are going to cost you money anyway. Spending time with the people you love is the most crucial and that’s not always going to have a cost associated with it.
It may help, however, to prioritize what it is you want to do. At the risk of sounding cliché, what’s on your bucket list and in what order? If you have some specific ideas, bring them in when you talk to your planner. They should be able to help you figure out how to swing it financially while also giving you peace of mind that when you need additional care, the funds will be there.
Dear Pay Dirt,
I would like some advice on how to deal with some resentment toward my current college roommate, “Sarah.” We’ve been renting together for almost four months now, and she moved in two months ago. I also have a third roommate, “Rupal,” who’s a great friend.
Over the summer, as I was the only one living here, I was naturally running around to pick up some household stuff we were missing (weird-sized shower curtains! a coffeemaker! etc.). I let the other two know the cost and divided it by three, with the clear expectation that they would Venmo me. Sarah, who’s generally broke, just never did, not even when she moved in. So, eventually, I texted her to let her know that I’d be requesting her share on Venmo and she could pay me whenever. I’m not frustrated that it took her a few months to come up with the money, but I am frustrated that she just never said anything at all about paying me back.
Rupal and I each handle paying some of the bills and utilities, then Venmo request the other two people for their split of the money. Sarah always responds by telling us when, in the future, she’ll pay us back, usually in a matter of weeks. I paid for the shared communal groceries this week and told Sarah and Rupal to let me know what items they would use, so I could Venmo request everybody’s share. Sarah is just kind of ignoring that.
I understand that she is working a lot and trying to make rent, and I remind myself all the time to be patient and helpful, especially since I’m privileged enough to have my mom paying my rent, savings from a summer job, and a great part-time job currently. But Sarah seems to avoid thinking about how her brokeness is actually affecting her roommates. I literally have no idea what Sarah’s plan would be if I couldn’t spot her the money—she’s just assumed that I can. And while that’s true, it’s very stressful for me, because I’m always anxious about my savings.
It doesn’t feel to me as if Sarah can actually afford to live here— I’m essentially subsidizing her each month. I think it was messed up to move in when Sarah was likely well aware of whether or not she could really afford it, and then to just never mention once how Rupal and I would have to constantly pay for her and wait to get paid back. So, although Sarah is nice and pleasant, now I resent her and don’t have a lot of respect for her, just for the way she’s gone about handling things. Sarah is very avoidant of conflict and has a lot of anxiety, and when you bring minor things up with her, she tends to spiral. Help!
—19-Year-Old Adoptive Mom of a 22-Year-Old
Dear 19 Year Old,
I think you need to step back and think about what it means to be broke and why people struggle financially, which by your own admission, you’ve never had to do. I also want you to put yourself in Sarah’s shoes for a minute. She moves in and the first thing you do is charge her for items you think the apartment needs but she did not agree to buy. That’s not OK, to begin with, even if all of your friends are independently wealthy. You can’t make financial decisions for other people without their input, and choosing what to spend money on for your apartment is that kind of decision. If you want help from your roommates for household items, you need to have a conversation with them about what you need to get and what you expect to spend, and most importantly, they need them to agree to it. There are a lot of things I wanted in my early 20s for my living space that I held off on buying because I knew I had to save money. You say you understand that Sarah is trying to do that, yet you don’t, or you’d have given her some agency in the apartment spending.
Secondly, you’re not being patient or helpful. You acknowledge that she’s having trouble making rent and working a lot and your biggest concern is that she’s not thinking about how her financial struggles affect you—and it’s been only four months. It’s probably true that your anxieties are not her top priority, because if she’s having trouble making rent, she’s also having trouble paying for other necessities like food and health insurance. You have savings and a financially supportive family, and are likely not skipping meals or worried about having to do that. Your anxiety about money is probably nowhere near what hers is right now, and unsurprisingly, people do tend to react badly when well-off people who don’t understand why they financially struggle accuse them of acting irresponsibly. Financial problems are not de facto evidence of irresponsibility anymore than you not struggling because your parents are helping you is indicative of you being more responsible than the average person. You didn’t earn your family’s help, and I doubt Sarah earned her lack of a safety net.
If the uncertainty of whether Sarah will be a stable roommate is too much for you, then yes, you both need a new living situation. You don’t want the anxiety and she doesn’t deserve your presumptions and judgment. A lot of people with no parental support struggle at 22. So you need to come to some agreement about how long her lease will last going forward, and if you really do want to be helpful, you can help her find a cheaper place.
You also need to learn more about why people often can’t make ends meet. I’d recommend Barbara Ehrenreich’s brilliant book Nickled and Dimed, for starters. You have some naivety about these matters because you’re 19, but you’re also using a tone that makes me think you believe your financial security is something you’re earned because you’re more mature, and I believe you need to examine that—not for Sarah’s sake, but for your own.
Dear Pay Dirt,
I’m lucky to have maintained a group of childhood friends into my mid-30s even though we’ve never lived in the same place as adults. When we’re together, we revert back to girls at boarding school… for better or for worse. My closest friend is also the quirkiest in the group. Over the past decade, I’ve gotten into the practice of lending her clothes for extended periods. Once she came to visit and packed her bag full of homemade gifts, so I clothed her all weekend. Another time she stopped on her way to a colder climate and borrowed a jacket (she returned it a few months later at our mutual friend’s wedding). So, when she accompanied her husband on a business trip to my city this summer and asked to borrow a formal dress for an event, I had no qualms about lending one. She is odd but not unreliable.
She recently announced to the group that her husband sold his business and they are going to travel globally for the next year and work as “digital nomads.” In preparation for the trip, they ended their lease, stashed some heirlooms with various friends and family, and liquidated all of their belongings that they’re not taking along, saying they’ll buy everything new when they come back. I bet you know where this is going… the whereabouts of my dress is unknown.
I asked about the dress as soon as I heard of their plans to sell everything. Once she admitted she didn’t know where, or to whom, the dress was given, I asked for a small repayment from the proceeds. She never responded to that topic. She’s well off and gainfully employed, and I didn’t expect her to default on this loan. She profited from something that I’d loaned her—I should either get the dress or some money back, right? This is already making me resentful but I don’t want to lose a friend over it.
— Lonely Lender
Dear Lonely Lender,
You’re right to be frustrated by this. You’ve been generous in loaning her clothes and reasonably expected to get those things back. I think it’s also reasonable to follow up on your email asking for repayment. Tell her you need her to replace the items if you’re not getting them back. If she ignores you again, I’d be more pointed about it and tell her you loaned her the clothing because you trusted her to return it, and while it might not mean much to her, it does to you. Tell her you value your friendship and don’t want to build resentment toward her over this.
I’m not sure you can be more direct than that. If it escalates to that point, there’s a possibility that she gets defensive about it, so it’s important to give her an easy way out (which is, frankly, just paying you for it). Couch it in language that isn’t accusatory: “That dress was important to me, and if you can’t locate it, I’d feel better about the situation if I had funds to replace it.” She may also just take it for granted that you don’t care that much about the items you lend her, and it’s important to convey that that’s not the case.
I generally think anything you loan to a friend or family member should be regarded as a potential gift, and that may be useful to remember the next time your friend asks you to borrow something. But she is in the wrong here and should reimburse you.
Dear Pay Dirt,
I recently purchased into an event business with a friend who was very experienced with the type of business. Part of the deal involved keeping the original owner of the business as a partner in the new business. This past year was my first year being involved in the running of the event and I found myself doing most of the organizational work. I specifically joined with these two to learn from them but found that it was other friends and my personal clients who actually stepped in to help. I let it go at the time because I wanted to learn how to do all of the jobs required. The event was very successfully run and my additions worked out better than I could have hoped.
The main issue is that after the event was run, the original owner decided to finally read the LLC agreement he had signed that I set up with an attorney according to our agreed-on way of distributing profits. After speaking with my friend, who did remember that we had agreed to those terms, I consulted with the attorney to confirm that everything had been done above board. My friend changed his tune and now remembers that we were supposed to do things the way the original owner wanted. Despite the documents being signed 6 months prior and being completely fair and legal, they insisted that I had made a mistake. We had a meeting in which they both brought up their lack of participation in the organization of the event and how I just didn’t see the work they had done, as well as insisting that I agree to amend the agreement. I told them I would like to make things work but that I was not happy with their contributions. They seem to have taken that to mean that I will go along, and in subsequent meetings have seemed to have moved on despite creating a big uproar about how I was wrong. I am mixed about continuing to work with them. Should I continue this?
I’m a little confused about what the agreement states regarding the original partner. You say that part of the deal was keeping the original partner involved, and your friend states that the agreement required you to do things the way the original owner wanted, which are two different scenarios. It seems like you don’t have a clear chain of command for the business, so can the original owner veto any decision you and your friend make? If not, you need to come up with some process for building consensus around what you should and shouldn’t be doing—even if it’s just voting among the three of you.
If you think this is an issue of miscommunication or a lack of mutual understanding regarding what was in your partnership agreement, then that seems like a problem that can be solved, though it may require you to rework the agreement to everyone’s satisfaction. If it seems like your friend and the original owner are simply trying to control the business while you do the bulk of the work and take some equity, you should rethink whether you want to be in business with them. If you don’t, then perhaps you should explore the buyout provisions in your operating agreement. (You could buy them out or they could buy you out, and your operating agreement should outline how that would work.)
It’s hard to run a business with what are effectively three chief executives unless you’re all very aligned with regard to your vision for how it should be run, and what constitutes success. You believe the event was very successful; they believe you made mistakes. If you want to continue to work with them, you, unfortunately, need to talk to them about the event again, and better understand what they think could have been better, and make sure that you’re all in agreement about the direction you’re headed in now. You should have a common, shared objective that you all understand to be indicative of success. Maybe it’s revenue or profits; maybe it’s something more ephemeral like whether the event had an impact externally.
Whatever it is, you need to be in agreement or you’ll keep pulling the business in different directions until you tear it apart. In the absence of agreement, you need a hierarchy or voting process that allows decisions to be made in a way that doesn’t lead to constant conflict or prevent things from getting done. That means someone has to have a final say. A good starting point would be talking to your partners about how to handle conflicts where you disagree on business strategy or operational decisions. If you can’t work through conversations like this, you probably can’t work together long-term, at least not in a way that’s productive and satisfying for everyone.
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My mom is really inflexible about my clothes. The problem isn’t really about modesty; my family is both Indian and practicing Catholic (aka a modesty double whammy), and I can accept and understand that my parents are going to control things like the length of my clothes. I’m fine with that. My problem is that my mom won’t let me wear the clothes I like. I have a very different style from her.