Backpackers Tokyo

Pay Dirt

How can I make her help us again?

Two women wearing masks sit on a couch.

Photo illustration by Slate. Photo by Inside Creative House/Getty Images Plus. 

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 parents, now in their late 70s, made awful financial decisions that culminated in them taking early social security—a combined $1600 per month, with no other retirement or savings to live on. They both have mobility issues, and my dad is having memory issues, so working isn’t a possibility.

Two years ago, in order to keep them nearby in our increasingly expensive area, my sister and I decided that my parents would move in with my family, and my sister would contribute $400/month toward their living expenses. We didn’t have a written contract, but we do have a record of her doing this since they moved in.

Last month, we had a blowup with my sister over her refusal to get her kids vaccinated, and she stopped talking to all of us. And she’s stopped contributing funds. Do I have any recourse? Between debt payments and paying for physical therapy and other medical bills, my parents don’t have anything left over for anything social or other needs, so now it’s falling on my family to pay even more, on top of the increased utilities, food, etc. I’m furious that my sister put us in this position.

–We Still Need That!

Dear Still Need That,

Unfortunately, there’s no way to force your sister to pay up. She may have a moral obligation to help, but she has no legal obligation. I’m sorry that your family has to take on more of a burden because she’s chosen to selfishly withhold her contribution, and also that she’s selfishly refusing to vaccinate her children, which puts both them and your elderly parents at risk. For now, I think you just have to plan as if those contributions are not going to materialize, and budget accordingly.

Dear Pay Dirt,

I have been with my husband for over 10 years. For the first seven years of our marriage, we managed our finances separately. I made a fraction of his income, so we just split bills. He managed high dollar items like mortgages and utilities. I would cover things like groceries, phone bills and streaming services.

When our second child was born (2 years ago), we made the decision for me to stay home with our kids because my income would be negated by the cost of childcare. At this time, we merged our accounts and began spending money as a couple. It’s been an adjustment for both of us as we previously spent the remainder of our respective incomes with little discussion or input from our spouse.

Two years in a row, we ended the year living paycheck to paycheck (though it’s a healthy income) and then my husband gets another very healthy bonus at the end of the year which we have used to pay off the debt. I probably shouldn’t complain much because we’ve been able to install a very nice patio, purchase a new vehicle and pay off expenses incurred after travel–with no debt remaining. The problem is that we disagree on how to spend money throughout the year and we get to that paycheck-to-paycheck period by putting too much money down on major expenses (vehicle, home improvements) without leaving much for a nest egg or an emergency fund.

We have also butted heads because he thinks we should always pay off a credit card in full when we have the amount in funds every time, where I think if you split it in half or thirds to preserve funds for daily living expenses (when the total is high), it’s worth the small amount of interest to avoid using the credit card even more when the money runs out. When money is taken from savings to pay off a large credit card bill, that money never gets put back on the next pay period. Then the savings dwindle and another major purchase comes along (we’re hoping to get a new pontoon boat this year) and my husband insists on putting nearly all of our savings into the down payment. Then there’s no safety net.

We’re in the black right now because of hubby’s bonus from 2021, but how do we keep ourselves from falling into this cycle all over again? I have budgeted most of our expenses and we have savings taken out automatically every pay period. We have also tried to increase communication by putting all or our bills on a shared calendar. I also insisted on consolidating use of our credit cards to just one so we have fewer payments to make. However, we’ve just butted heads again over my husband paying an $1,100 credit card bill after he insisted on spending $500 on silver and $150 on home improvements that weren’t necessary right now. In addition to that, his paycheck was short this period due to taxes on a separate non-cash bonus.

I know that paying off a credit card is always ideal, but does it really make sense to have no balance if you end up charging groceries because there’s no funds in the account? I think the small cost of interest is a fair trade for a safety net. What do you think?

–Different Ideas About Debt

Dear Different Ideas,

If you’re living paycheck to paycheck despite budgeting, consider that there may something wrong with the way you’re going about it. You mention a lot of big purchases that are taking priority over an emergency fund, for example. There’s nothing wrong with selectively deciding to make those purchases when they increase your quality of life, but you do need a financial cushion in case your husband loses his job, or something else happens that leaves you with even less income than you have now, or creates a big unexpected expense. And it’s not a matter of denying yourselves everything in order to get there, but you do need to plan for these major purchases in such a way that you’re not spending your accounts down to zero.

What this means is that you need to include savings in your budget, and create a hierarchy of what you can spend where every month: necessary expenses first, something into the emergency fund next, and then the discretionary purchases that aren’t necessary but add to your quality of life. Most importantly: do not touch the emergency fund, except in case of an actual emergency. Create a separate account, put money into it each month, and then pretend it doesn’t exist. It is off-limits for spending.

As for whether paying off your credit card immediately is ideal, it really depends on how you’re using it and what the terms of the account are. If you’re using a card that has significant rewards for spending (cash back incentives, travel perks, etc.) there may be some incentive to put expenses on the credit card and pay it off before you accumulate an amount of interest that outweighs the rewards. Regardless, it seems as if your husband wants to pay the card off immediately because he’s afraid of having any debt, which is as much about his anxiety as it is about practicality. But he needs to understand that being cash-poor is what creates anxiety for you.

But all those practicalities aside, I think you’re making a bit of an error in assuming that this is an issue of “cash in the bank” versus “credit on a card.” If you have debt on a card, that’s money already spent, so it doesn’t “save” you anymore cash in any meaningful sense. Your problem isn’t whether you’re using cash or credit, it’s that you need to make your budgeting process more accurate, relative to your usual expenses, and pull back on some of the major purchases until you have enough savings to feel financially secure if you’re short a paycheck.

Money advice from Athena and Elizabeth, delivered weekly.

Dear Pay Dirt,

I’m very fortunate to have been relatively untouched by the pandemic (financially anyway), but many of my friends can’t say the same. I have a number of friends who ran hospitality businesses in what was a busy and thriving tourist destination but has collapsed. I just moved back to the area after 15 years away and it is devastating to see these friends struggling and businesses that had been successful for over 20 years boarded up due to no fault of the owners.

I’m not wealthy per se, but I have a stable job with a good salary, and a healthy retirement plan and savings account. I have some extra money saved that I was planning to use to for a down payment on an investment property or to buy some shares. Would I be crazy to consider giving this money to one of my friends? If it’s not a straight-up terrible idea, what’s the best way to go about it? Investment or loan? What should I look for when deciding if it’s a safe investment? And should I give one friend everything, or three friends a small amount?

­–I Really Want To Help

Dear Really Want to Help,

You’re a very good friend to even consider doing this, but any arrangement you make with your friends runs the risk of changing your friendship, depending on what your—and their—expectations are. As a general rule, you should never loan a friend or family member money unless you can afford to give it as a gift, because you may never see it again, even if the beneficiary of your generosity is responsible and well-intentioned. So don’t give your friends anything unless you’re prepared to really, truly give it as a gift. The hospitality business is notoriously volatile, particularly if we’re talking about restaurants, where failure rates are high even in good, pandemic-free economic times.

You don’t indicate that you have a background in hospitality, so I don’t think it’s a business you would be able to meaningfully evaluate as an investment, either. In a previous life, I was an equity analyst, and I advise people not to pick individual stocks for the same reason: the kind of legwork you have to do to really understand a business isn’t something you can just carry out casually, and most people are not equipped to do it.

You also don’t indicate that any of these friends are asking you to do this, and consider that you don’t want to put them in a position of saying yes to your offer just because it’s there, which might not be good for them, either. All things considered, I would find another way to help.

Dear Pay Dirt,

Always been a big tipper, in part because I have so many friends in the food and beverage service industry, and understand what a tough gig it is. Since the pandemic, I’ve increased my largesse, with tips of over 30%. My dilemma is when splitting the bill, my tendency tends can rankle the person I’m splitting with as they feel the need to match. How do I not look like a jerk but still continuing tipping big?

–Making Them Look Bad

Dear Making Them Look Bad,

I also err on the side of big tips—for many of the same reasons you do–but don’t want others to feel obligated to do the same, so my trick is to just sign the check and immediately turn it face down, so the only person who knows what you tipped is the person you’re tipping. It’s harder to hide what the tip is in all-cash situations, but your friends are probably not going to count the amount that you put on the table.

If your friends ask what you’re tipping—in which case, there’s no getting around it—just note that you have a habit of over-tipping, and leave it at that. You’re the weirdo, not them!

And for what it’s worth, you’re not making them look bad. Your generosity on this front doesn’t make your friends stingy, and wait staff knows what a decent tip looks like. Unless your friends are under-tipping, they’re fine.

—Elizabeth

More Advice from Slate

About three weeks ago I started dating a nice guy. Recently we were talking and I told him about some childhood issues. He got really excited and confided to me that when he was born he had numerous congenital heart defects. He’d been hoping to find somebody who would understand that he still needed frequent medical care, might need surgeries, and would probably die fairly young. This threw me. To tell you the truth I wanted to walk out. I’d been telling him about my childhood to tell him how hard it was to grow up with a brother with congenital heart problems. I live in the same city as most of my family and rarely see them, because all of the stress of my brother’s care and his eventual death tore us apart. Now I’m supposed to do it all over. I can’t. I feel like a horrible person, but I know how hard this is and I just can’t do it again.