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,
My boyfriend of six years is extremely loving and completely devoted to me in every way possible… except that he won’t get married again (we are both divorced) or buy a home together (he currently owns the apartment that he’s had for 13 years but it’s not big enough for me and my two daughters to live). So we continue to live between two apartments (mine when I have my kids and his when they are with their dad).
Since we’ve been together, I’ve had to move three times (the first move was by choice because our place was too small when we would now have four people and a new dog). The last two times have been because the landlord was selling the building. I feel very frustrated because I feel like we wouldn’t have to keep moving out of our rental apartments if he would sell his apartment and we could buy something together (I can’t afford to buy something on my own). So, although we say we will be together for the rest of our lives, are in each other’s wills, and share everything with one another, it feels off. It doesn’t feel like a true partnership when we’re not making financial decisions together.
In his perfect world, I would just be fine renting for the next six years until my kids go to college and then we would live in his apartment. But I also want somewhere for them to stay when they’re home on breaks and holidays, etc. In my perfect world, he would sell his home and we’d buy one that would fit all of us for a long future together, but he says he’ll be miserable not being in his current neighborhood and apartment that he loves so much. We’ve had hundreds of conversations about this and always end up in the same place: I am the one who concedes mainly because he makes more money than me (which is a whole other topic that I could get into over gender roles and dynamics). I don’t want to break up but I’m also feeling increasingly resentful. What should I do?
—Longing for Stability
Dear Longing for Stability,
You say this boyfriend is “completely devoted” to you, but nothing about what you’ve written indicates that he’s willing to make any compromises to make your life easier. It seems he’s more in love with his apartment and neighborhood than with you and your family. What are you getting out of this situation? Having to flip-flop between housing every few weeks and moving three times in six years?
Currently, your boyfriend has it made—he gets a girlfriend in his perfect apartment and neighborhood and doesn’t have to change from his bachelor lifestyle. He thinks it is easier for your family of three to keep moving than for him to leave his apartment. Maybe he has something in his past that makes him cling to the stability of his apartment—but he isn’t the only one that deserves that. You and your daughters also deserve the kind of stable housing situation that he has.
I have to ask: What do your daughters think about your boyfriend and living situation? Are they OK with the way things have been going? Do they like him? They’re old enough to have opinions about him. Even though you’re the adult who will make decisions, they might provide you with new insights. It sounds like he views them as inconveniences to his ideal couple life with you—and not family members to consider in decision-making. All of your plans accommodate your children, and his “perfect” plan seems to be to keep them at arm’s length until they’re old enough to be out of his life and then have you all to himself (in his ideal apartment).
I’d tell you to ditch this guy because he only seems to be complicating your life, but maybe his other qualities are redeeming enough to put up with this apartment attachment. If you want to keep your relationship, one possible solution is to rent a bigger home with him for the next six years while he rents out his current place. That way, he holds on to the apartment for after your daughters go to college, but you don’t have to upkeep two households and switch back and forth. Maybe if he’s forced to move as often you have been, he’ll see the wisdom of your proposal.
Dear Prudence,
I am a parent who would like to hire a once or twice-weekly part-time caregiver so I can get some things done, both personal/home stuff, and work toward a career change. Because part-time childcare is a harder sell for a worker than full-time, I wonder if I should offer more benefits. I did some research but I only found suggestions for full-time nannies. What kinds of perks can I offer that they might like? And is there a way to do this without hurting them on their taxes? Also, the hourly wage around here is typically $20-$25 depending on experience (and of course more with additional kids), so I promise I’m not trying to use benefits to replace a fair wage… But maybe a higher wage ($30?) would be more enticing than any benefits I can come up with. Finally, I do have other childcare options on the horizon (family and maybe a neighbor’s teenager who could be a mother’s helper) but not until the summer. And in any case, I would love to hire a professional.
—Mama Could Use Some Help
Dear Could Use Some Help,
To avoid hurting childcare workers on their taxes, the IRS requires you to treat them as household employees with the appropriate tax withholding if you pay more than $2,600 per calendar year (for the 2023 tax year). Many families mistakingly think that paying under the table will help their nannies out but it can cut them out of qualifying for things like Earned Income Tax Credits and stimulus payments. You’ll also potentially hurt their social security and unemployment insurance eligibility, not to mention proof of income for housing. And you’re risking hefty fines and a tax audit. A nanny payroll service is the easiest way to stay compliant for most folks.
The best perks you can offer part-time workers are generally 1) higher hourly wages and 2) a schedule that works around their other commitments, like schooling or work. But you can also consider the kinds of tax-advantaged perks an employer would offer, like allowing them to use your car during specific times (make sure they’re on your insurance), a cell phone, or even tuition reimbursement (like this generous Pay Dirt reader did). If they have a kid of their own, being able to bring their kid along while watching yours might benefit everyone.
You could also consider teaming up for a nanny-share to find a full-time professional. If you have the space, an au pair might be a creative way to get part-time child care, too. Good luck finding the right solution!
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Dear Pay Dirt,
I am 37 years old and in the process of divorcing. Once assets are split, I will have about $275,000 in retirement savings, and $100,000 in a brokerage account (hopefully to be used as a down payment for a home in the future). Previously, I have maxed out all retirement options—401(k), Roth contribution, and HSA (I tend to be someone who panics about not having enough for retirement). Because of my divorce, my cost of living is going to significantly go up. Additionally, I know this first year of being on my own again is going to have some really emotional low points.
Based on that, I’m thinking of reducing my retirement contributions for the year to the minimum needed to secure the employer match and then using the extra money to find a nicer apartment/have extra funds for the year. Is this a bad idea? I’m concerned if I do it one year, I’ll let it be the same the next year, and so on. But at the same time, I think it might be good for my mental health to make sure I’m not panicking about money/living in a crappy apartment when there are already going to be a lot of emotional moments. If I do reduce the savings for a year, how do I set myself up for success to start increasing savings again in the future?
—To Spend or Not to Spend
Dear to Spend or Not to Spend,
Your plan makes perfect sense: temporarily ramping down your retirement contribution by accommodating a spendy year when your circumstances change significantly. Your nervousness indicates it probably won’t be permanent lifestyle inflation.
When considering how you care for yourself during this emotional time, avoid signing up for any expensive ongoing commitments that exceed a year: Don’t lease a fancy car or sign a 22-month lease on a costly apartment. Plot out your expected take-home pay once you return to your old savings rate in a year, and make sure your fixed commitments (like an apartment) are manageable for your future budget even including retirement. Brainstorm smaller things you can do to treat yourself: nicer gym, fancier groceries, larger coffee budget, etc. Consider the one-time purchases you’ll need for your new place as well. If you don’t increase your recurring costs too much, you should be able to re-up your retirement contributions after 12 months from within your existing budget. If you’re anxious about it, set reminders for savings in the months leading up to your deadline. You can even ease yourself in by increasing your 401(k) withholding a few percentage points each month—by the end of the second year, you’ll be back to your old retirement savings with a subtly shifting normalcy.
Dear Pay Dirt,
My husband and I live in a very expensive city. For 15 years, we rented an apartment in a beautiful neighborhood right near downtown. Few people can afford to buy there, including us. The rental market is mixed—new developments are expensive, but there are great and affordable options in multi-family homes.
After quarantining in our small apartment with my disabled father, who came to live with us, we were ready for more space. We took advantage of low-interest rates in late 2021 and bought a large and lovely home on the outskirts of the city. But after a year here, we hate it. The neighborhood is far from downtown and lacks amenities that we value; it’s much more conservative (and borderline racist toward my husband, who is brown); and even with the good mortgage rate, the cost of maintaining the home is still more than we’d like to pay, especially since our quality of life has taken a hit. We can technically afford it, but it doesn’t feel worth it.
Now, my dad is moving out, so we don’t even really need the space. We want desperately to move back to our old neighborhood, but we feel stuck. If we sell, we’ll lose closing costs; it might look bad for the house to be on the market again after only a year; and it’s my understanding that we’ll owe capital gains taxes if we do manage to make a small profit. Additionally, and this is the biggest issue, we bought the home as an investment in our future, to build equity and stop throwing away money on rent.
Would we be crazy to rent the house out to someone else, and go back to being apartment renters in our preferred neighborhood? On one hand, it’s risky: The home is older and has quirks that might one day mean costly repairs, tenants could damage the place or not pay their rent, and having to carry the mortgage in between tenants would strain us financially. On the other hand, the numbers aren’t bad: The rental market is robust and I think we could get close to the amount of our mortgage. And by renting something much smaller in our preferred neighborhood, we’d be saving more than $1,000 a month. We could invest those funds back into the house, for all of the extras that come with being a landlord. That way, we would essentially break even each month with our expenses—all while building equity in a home. We’re completely on the fence and have no idea what to do.
—Don’t Want to Live Here But Don’t Want to Sell
Dear Don’t Want to Sell,
Your plan makes sense if you want to be a landlord. Make sure you’re up for the work and frustrations of owning a rental: vacancies and repairs, screening tenants, and possibly leaving work in the middle of the day to deal with emergencies. You will have to budget for a property manager if you’re not. Search out a local landlord-tenant law class (you can likely find one offered by your city, community college, or state bar) before embarking on landlording as a side hustle to ensure your I’s are dotted and T’s are crossed. While you’ve run the numbers based on your personal expenses, make sure also to use formulas that landlords use (such as the one percent rule) to figure out if the house is a wise investment and estimate how much you need in reserves.
One small note: If you rent the house out immediately, you will not meet the “use test” for the capital gains exclusion because you won’t have lived in the home as your main home for at least two years. It doesn’t matter if you’re not selling the house, but worth knowing if you decide owning rental property is not for you.
—Lillian
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