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 husband and I are at odds over an inheritance from my late aunt. She split her money between my mother and me. My mother insists on putting her full share in a college fund for our daughter. I have two teenage stepsons. They don’t have anywhere close to the same amount of money saved up. While my husband and I contributed to their college funds, their mother and her very large extended family don’t.
I want to use the money as a rainy day fund. Our house is old and will need a new roof and foundation repairs soon. We also have retirement to think of. My husband argues that I should love my stepsons as much as my daughter and they deserve an education not drowning in college loans. I don’t think this is fair. My stepsons and I have a civil relationship but we aren’t close. They have a mother and it would be horrible of me to shoehorn my way into that position. And my stepsons haven’t even met my aunt for the love of god.
I understand the rising cost of college but there is community college, scholarships, and the rest of their extended family to think of. Part of me is bitter because if I do give them the money for school, do I finally get allowed to voice an opinion? As a stepmother, I have always been told to step back, it wasn’t my place to voice an opinion on what my stepsons do or do not do. I need some help here.
—Inheritance
Dear Inheritance,
Despite being their stepmother, it’s not your responsibility to make sure his children graduate debt free using the inheritance from someone they’ve never met and, most likely, didn’t know existed. It’s inappropriate for your husband to expect you to fund their college education with this money. I also think it’s extremely unfair to say you love them less if you refuse.
First, your daughter’s college fund is a gift from her grandmother, not you. Your mother is choosing to spend her inheritance how she sees fit, and it’s on her granddaughter who she has a relationship with. This isn’t a situation in which you’re leaving your entire estate to your daughter alone with nothing to spare for your stepsons. It was a gift to you and you want to spend this money on your house.
Speaking of parents, your relationship with your stepsons may be civil, but it also sounds non-existent due to boundaries put into place by your husband and their mother. Every family has their own dynamics. But I can imagine how it would feel to be repeatedly reminded that these aren’t your children, then told that unless you give up your inheritance for their education, you love them less than your daughter. Not to mention, you’ve already contributed to their college education while their mother has not. I, too, would be bitter, and rightfully so. Your husband should be searching for other avenues to help his children afford college along the lines of the options you mentioned—as well as asking their mom to be involved.
With all of that in mind, I don’t think it’s unreasonable for your to keep your entire inheritance and not put any of it toward his children’s education. I do suggest having a conversation with your husband about your decision and setting boundaries in regard to the situation at hand. Since the conversation is already fraught, try having it in couples counseling. A counselor can help make sure you both are heard and can suggest steps for moving forward from this disagreement. Good luck.
Dear Pay Dirt,
I have about $9,000 in debt across three credit cards that I’ve been trying to pay down for years. Recently, a close friend of 20 years offered to gift me the money to pay off the debt, with no strings attached. I accepted her generous offer. Now that I have the funds to pay these off completely, what’s the best way to do it to the benefit of my credit score? I have no other debts except what’s on the cards and have never had a student loan or car payments in the past. My current credit score is 720, and I’d love to get it as close to 800 as possible.
—A Good Problem
Dear Good Problem,
This definitely is a good problem to have and incredibly kind of your friend. There are five factors when it comes to having a good credit score. And FICO, one of the most recognizable companies in credit scores, weighs each of these factors into your score differently: payment history (35 percent), the amount of money you currently owe (30 percent), length of credit history (15 percent), credit mix (10 percent), and new credit (10 percent).
By paying off your credit cards, not only will you be debt free, but you’ll also lower your credit utilization rate, which is how much money you owe compared to how much credit you have available to you. For example, if you currently owe $9,000 in credit card debt and only have an available credit limit of $10,000, your rate would be at 90 percent. When you have a higher utilization rate, you look risky, which in turn, lowers your credit score. So pay those debts down as soon as you can.
After paying off your debt, keep practicing good credit management. Think about how you got into this debt and learn from that. Pay your credit card off in full every month. If you do take on debt again, make sure your payments are always on time, and your utilization rate is always below 30 percent. Also, it may be tempting to close all of your credit cards so you never risk temptation again, but don’t do it. Closing your accounts will lower your available lines of credit, credit mix, and length of credit history, which are all key to getting that 800 you dream of.
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Dear Pay Dirt,
My partner and I live in a below-market rental in a very expensive city. We love where we live and we have a great relationship with our landlord, but we dream of having more space. We considered buying a home at the beginning of the pandemic, but the competition was too fierce for us. Now that the market is a little calmer, anything we like in our city is far outside our budget. I had been feeling really down about missing the real estate boat, but now I’m excited about a new idea we’ve been discussing—but I need to know if it is realistic or if there are pitfalls we aren’t considering.
We’d like to take the money we’ve saved for a down payment and purchase a vacation home about two hours away. Our apartment is affordable enough that we think we can swing both rent and a mortgage (though it will be tight). We both work remotely so we’d be able to spend as much time as we want there while still having an apartment close to friends and amenities in the city. We don’t plan on renting it out. Rather than try to make quick money off of the house, we’d consider the extra expense a long-term investment since the area we’re looking at only ever increases in value. We both grew up poor and the only reason we have savings is because we’ve been in our tiny cheap apartment for so long, so we don’t know anyone who has purchased a vacation house. Can you tell me if this plan sounds wild?
—Can Your First Home Be a Second Home?
Dear First Home, Second Home,
Your plan doesn’t sound wild. It sounds like someone who’s trying to make do with our current market. I think the only way you can afford to purchase a home, though, is to give up the rent-controlled apartment.
While you didn’t state your actual income and expenses, you did say you don’t have money to keep both properties without it being “tight.” Are you factoring in the hidden costs to owning a home, beyond your mortgage payment? Not only should you account for property taxes and homeowners insurance, but you need to be prepared for maintenance issues that will need to be promptly addressed once they come up. Giving up the apartment would free up the cash you need in your budget to be a comfortable homeowner. You’ll have to weigh what you want more right now: more space (along with the responsibilities of homeownership) or being in a location you love. If you do want to stay in the city, have you considered paying slightly more for a bigger rental?
As usual, I always want to emphasize that you don’t have to buy a home if the timing isn’t right. There is a difference between seeing yourself in this new location versus actually living there and I know you currently love your city, just not the current apartment. If you can, budget for an extended stay in an Airbnb and live like a local in the new area. Check out new sites, eat at locally owned restaurants, and look for fun things to do, like farmers markets. After you spend some time there, you may be convinced to go all in your house and make the city a vacation destination instead.
Dear Pay Dirt,
I’ve been feeling deeply unfulfilled in my job basically ever since I started it. I like my co-workers, and the benefits are great, but the work is just…fine. I do the best work I can, but I don’t care for the industry I’m in, and I definitely don’t want to climb the ladder in my current role. But good news! I did a lot of soul-searching and volunteering and have found a career field that I am sincerely interested in, and I’m moving forward in that direction. I’ve been accepted to an academic program to prepare me for that field, and I’m planning to make a drastic career change.
The only problem is that my program doesn’t start for another year and a half. My current plan is to stay at my current job and save up money while I continue building up professional and volunteer experience on the side. Then next year I’ll move across the country and change careers. I’m not interested in staying in my current industry long-term, but I also don’t want to move jobs right now because I like my pay and benefits and co-workers enough that I’m not totally miserable. How do I make the most of the next year and a half? I’m stuck in my current role for the time being, but there must be some way to make that time feel more valuable. Any suggestions?
—Living in Limbo
Dear Living in Limbo,
I love how you are taking advantage of your situation and making the most of it instead of staring at the calendar. One way to make the most out of the time you have left with your employer is to see if there are any tasks or opportunities available that can help you prepare for your new program. For example, before I became a full-time writer, I asked my last employer to give me tasks that were related to my craft. Not only did I edit a ton of essays our students wrote but I also helped write grants for our youth programs. Review the skills you need and see if you can cross-match any of them to tasks you can do now.
Ask your employer if they have any ongoing education classes you can take advantage of for professional development. A lot of employers outsource tasks related to HR to companies like ADP, which offers numerous pieces of training in different areas such as conflict resolution and leadership. And take advantage of those benefits you love. Go to all your annual doctor visits and take care of any lingering medical issues or concerns you’ve had. Schedule a dental exam so you’re cavity-free. And if you need any help managing a chronic health condition, get a plan put in place now before you move.
—Athena
Classic Prudie
I’m getting married in a few weeks, and I have prided myself on being a roll-with-the-punches bride who knows the most important thing is that I’m marrying the best guy in the world. The problem is his ex (they dated for three years when he was in college over a decade ago), who still obsessively refers to him as her bestie (a level of friendship I’m not sure he feels, though I know he cares about her, and his sense of loyalty is my favorite thing about him). She decided at the last minute that she was traveling in to attend and now needs her hand held every step of the way.
