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 moved in with my boyfriend and I loathe it after just five months. I’m 53 and he’s 49 going on 16. I made a huge mistake and sold the house I was living in (I had planned to move anyway) and put the profits into the house we now share instead of just getting my own place again. I thought I would have enough space in a large house but it hasn’t worked out that way. Anyway, we both put $47,000 each as a down payment on a beautiful $448,000 house. I clean the hell out of the house so it still looks great but of course, the value hasn’t changed. So, do I wait it out for a few years like a trapped animal? Do we try and rent it? The $47,000 I put down was all I had—my only other savings are my 401(k).
Dear Dumb Mistake,
Do you want to break up with your boyfriend or just the house? Selling so quickly after buying is a very costly endeavor. In addition to not recovering the one-time costs of purchasing (closing costs, commissions, recording fees), you’ll owe short-term capital gains on any profits. Renting the house out could feel like a tidy solution, but if you move out without living there for two years, you won’t be able to utilize the 701 capital gains exclusion. You’ll also become a co-landlord with your immature boyfriend, which comes with its own set of issues: The house might not be a profitable rental, you might end up bearing all the administrative burden, and tenant vacancy or nonpayment will affect your ability to pay the mortgage. Make sure you want to become a landlord and that the rental market pencils out in your favor before you take that leap.
Given the rising mortgage rates, I recommend you get creative with other solutions to your problem if it’s only a matter of enough space and you want to keep the boyfriend. Perhaps getting a coworking space or fitness club membership would get you out of the house more often and make the small space less frustrating. If you like the place but need help maximizing the square footage, you could hire a professional organizer and invest in better storage solutions. You could also look at putting together the funds (through a HELOC or prioritizing savings) to add on an extension or mother-in-law unit. Maybe even rent a pied-à-terre for when you need to get away.
These creative options are likely cheaper than selling the house in under a year in a rising interest rate environment. You will have to decide if you and your boyfriend are willing to take a loss of possibly tens of thousands of dollars. If you want to ditch the boyfriend and the house, it may be much easier and cheaper if one of you sells to the other (rather than selling it to a third party) because you avoid the costs of a market sale. You would work with a lawyer to create a contract for the remaining person to buy the interest in the home from the other. Hopefully, when you bought the house with an unmarried partner, you put together a joint house ownership agreement that stated what to do in the case of relationship dissolution. If you didn’t, it isn’t too late to work with a lawyer to negotiate such a document.
Dear Pay Dirt,
My wife teaches middle school Spanish, and like most American public school teachers, she spends a lot on stuff for her students and classroom. We don’t have much in terms of savings and want to save more. I think that her work-related purchases are an obvious expense to eliminate. At the end of last school year, we talked about it, and she agreed to spend less on work this year.
To her credit, she has cut back a lot. But she is still buying tissues (the school only provides teachers with one box at the beginning of the year), extra copy paper (they only get 10 reams per semester), pencils to loan out to students, and teaching resources and materials (the school doesn’t provide textbooks or even curriculum for some of her courses). It’s been coming out to $125-150 a month so far. (She also made some one-time beginning-of-school-year purchases in August.)
She thinks she’s done enough and it’s unfair for me to expect her to cut back more. Her argument is that if she does, it will make her job significantly more unpleasant and difficult. She says the tissues are a sanitary issue. Without loaner pencils, some students will be unable to do their work, and she gets dinged during observations if everyone isn’t engaged. She says the extra paper is needed to copy materials because of the lack of textbooks, iPads, or Chromebooks for her classroom. If she doesn’t buy the teaching resources, then she has to spend even more hours after the school day making things from scratch or finding them for free.
I get it, sort of, but… she shouldn’t need to spend ANY of her own money on a job! In my field, that is unheard of. It feels like a big waste of money to buy stuff her employer should be providing. Who is right? Should I be thinking about this differently?
—Sick of School Spending
Dear Sick of School,
You’re absolutely right. It’s unfair that schools expect teachers to buy the supplies to do their job when other employers would cover these costs. Moreover, because of inequitable school funding, the teachers with the lowest salaries are the most likely to need to pay for supplies. An Economic Policy Institute survey found that teachers spend an average of $459 out-of-pocket on classroom supplies.
The work environment for teachers is so uniquely broken it spawned a genre of #WhyIQuitTeaching videos and posts across social media. One ex-teacher friend of mine was surprised when her new corporate employer didn’t implement a quota on how many pages she could print or require her to reserve the printer days ahead of time.
While there’s yet to be a fix to underlying educational funding inequality, the IRS at least made it possible to tax-deduct educator expenses up to $250 per year. There are other tactics to cover these expenses. If your wife works in a wealthier district, she can ask students to bring supplies for the room or set up a classroom Amazon wishlist. She could set up an account on DonorsChoose, the nonprofit platform for teachers to fundraise for classroom supplies.
If she’s part of a union, she could talk to her representative about negotiating the school’s limits on paper and tissues. Or she could organize with other teachers to ask the school board for textbooks or supplies. If the school district still doesn’t pay, she could buy bulk supplies with other teachers to save money. I agree—it is unfair teachers are put in a situation where they have to choose between their savings and basic work supplies. You could invest your time into campaigning for improved school funding, but I recommend focusing your energy on strategizing with your wife for her classroom expenses.
Dear Paying Proxy,
My girlfriend owes over $200,000 in medical and credit card debt, but she believes it can be settled for five percent of the total amount if someone else will pay that. She reasons that her creditors wouldn’t have a claim on anything that was in my name, so they will take whatever I offer to settle on her behalf. She said she can give me the money in cash. Is this a good idea? Could attempting to do this make me responsible for her debt? Would it be better for her just to declare bankruptcy, or try to negotiate the debts herself?
Dear Paying Proxy,
When people are desperate, they make desperate plans. Your girlfriend’s idea has elements of truth in it: Creditors will often settle for less than someone owes (especially if the account is already in collections), but 5 percent of the total bill is much lower than usual settlements (usually 30-50 percent of the debt). Plus, canceled debt is often taxable. Negotiating with her creditors alone won’t make you responsible for her obligations, but debt collectors will try every trick under the sun to get money owed. Adding yourself as their target is foolhardy. Common tactics include:
—Resetting the statute of limitations with new credit card offers
—Misrepresenting private debt collectors as law enforcement
—Making fake Facebook profiles to get in contact with debtors
—Calling debtors at work (though if you ask them to stop, they must)
I sympathize with her situation, $200,000 of medical and credit card debt is overwhelming, and it’s tempting to look for an easy way out. But she needs to take ownership of her debt, not foist it off on you. Bankruptcy could be a way to clear her debt (plus, filing for bankruptcy can make creditors more willing to negotiate), but she should work with a reputable, nonprofit debt counseling agency to determine if that makes sense for her.
A nonprofit debt counselor will make an actual plan for her debt, including bankruptcy or forgiving medical debt through charity care, rather than concoct complicated schemes. Many sketchy debt counselors promise a “quick fix” for a fee, so she should take the time to find an accredited nonprofit agency. A trustworthy place to start the search is the National Foundation for Credit Counseling and the Justice department’s list of credit counseling agencies. This cornucopia of debt is her responsibility to deal with, not yours. You can offer support and resources but stop way short of negotiating on her behalf or enabling her TikTok misinformation-style plans.
Dear Pay Dirt,
Well, it happened. My parents put my younger brother in charge of all their estate and my mother-in-law (who lives in my husband’s country, where we live) told me that she had deliberately excluded me from any inheritance because “you never know.” I’m 40 and had a good job that I used to fund my husband’s start-up for about 10 years, and then, I quit and did the domestic labor that I had paid people to do while my husband was start-upping. So, now all “my” money is not mine and I have no pension and, while I love my brother and don’t think he’ll put me out to pasture, he does make four times what I made on my best day and doesn’t “need” the money but is also not known for sharing as he likes to invest in real estate that he can rent. I’m mad because my parents paid a lot more for my bro’s education than mine. I’m also mad that my husband sat silently through my MIL’s explanation regarding her estate, never mentioning the somewhat open secret that I financially supported him for 10 years.
What do I do? I don’t think I’ll get divorced but I feel pretty stupid. I guess, as a woman, I was warned about this, but I honestly thought the people I loved and knew would appreciate what I’d done for them and might offer me some financial security, which was maybe egocentric, dumb, and naive. I kept quiet when my mom mentioned my brother’s role because I don’t know. I love my family and they love me and no one owes me anything.
I have no backup should I be unpleasantly surprised by any life event and I’m wondering what the smart thing to do is, other than warn my daughter to be more careful than I was. Should I do my best to plunge back into the workforce (while balancing young kids) and start putting money in a secret account? I still live in a foreign country where I am technically a resident, not a citizen, so I guess I should address that as well. Advice for an idiot, please.
—Potentially a Naive Karen
Dear Naive Karen,
You shouldn’t get a divorce simply because you aren’t inheriting money, especially if your husband is committed to returning your financial support from his startup years. But you shouldn’t feel financially abandoned in your partnership. The fundamental question here is about your marriage, not inheritance: Does your husband support your financial security?
In the U.S., inheritance is commonly excluded from marital property, so his silence on your inclusion in his mother’s estate doesn’t raise eyebrows. But I’d be concerned if he hasn’t addressed your financial security now that his startup is doing well and you are covering the domestic responsibilities. He can contribute to a spousal IRA, a savings account in your name, or your country’s version of a private pension. Your marriage should be a partnership with both of you working together for financial security— not relying on the whims of your brother or mother-in-law.
It sounds like you are resenting your family silently without expressing your concerns to them. You kept quiet when your mom brought up your brother’s estate responsibilities and haven’t talked to your brother about your needs around the inheritance. It’s time to TALK about your worries.
It’s possible your husband doesn’t understand how stressed you are about this. Since you are only 40 years old and he’s been focusing on his startup, he might not realize how high your financial anxiety is. Open up the conversation and make time to work together on a financial plan that protects the entire family—before you ever escalate to divorce.
Your current country might have different marital property laws, but any U.S. judge would consider your support of the household finances during your husband’s startup years in divorce proceedings. In addition to getting your fair share of assets, your lawyer could advocate for your ex-husband to pay alimony or even grant you a stake in his business. They could argue for reimbursement support, which compensates a spouse who sacrificed their finances or career advancement during the marriage to support the family while the other spouse trained for a lucrative career. Divorce isn’t the first step you should take, but know that there are options to protect yourself and your kids if it comes to that.
More Advice From Slate
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…