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 need some help with an odd problem. My mom died recently and unexpectedly. She went from being healthy and well to needing in-home hospice care in a matter of weeks—and then she was gone in another few weeks. I was lucky to be able to be there with her for her entire illness, and get as much time as I could before she passed. I am still young (in my early 30s) but have now lost both my parents.
She had barely retired when she passed, and suddenly all the money that she had saved passed to me. It’s changed my life—I have worked in education or equally low-paying jobs my whole life. But I can’t shake this enormous guilt that’s come with it. I know that I’m being irrational, but I hate knowing that the only reason I have a sizable retirement account is that my mom never got to have hers. I feel guilty for having money when I didn’t do anything to earn it except lose my last parent! Sometimes I think about giving it all away, but after 20 years of financial instability, I know that’s a stupid impulse.
I know I need to reframe my relationship with this money. Do you have any suggestions for how to think about my new retirement account? I feel like just having an outside perspective that doesn’t know me would help me put things in perspective. I am in therapy. We just never seem to get to the financial guilt stuff in those 45 minutes.
—It’s Like Winning the World’s Shittiest Lottery
Dear Shittiest Lottery,
I honestly don’t think you are being irrational as much as I think you’re grieving the sudden and unexpected loss of your mom. Yes, you are lucky enough to be able to say goodbye, but that doesn’t mean it’s not painful. It’s hard to navigate your new normal without being reminded she’s gone every time you log on to your checking account.
Once, a therapist explained grief to me as swimming in the ocean and then getting hit by a wave. Waves come and go—similar to a concept you might be familiar with, the five stages of grief. One of the feelings I think you’re expressing is bargaining. You’d give anything to have your mom back. To your grieving brain, that includes getting rid of the money. Anger may also be wrapped up in it. Your mom is gone and you didn’t want her to miss out on the retirement she saved for.
U.S. Bank has a guide that goes into detail and provides some tips I think might be helpful for overcoming the guilt of inheritance. You’re going to need to rewire your belief that this newfound inheritance is a curse, rather than a blessing. This won’t happen overnight and will take work that your therapist can help you with. In your next session, make it a point to bring up—and make sure it’s the first thing, don’t let yourself get distracted—that your grief is causing you to want to make a choice that can have major consequences on your financial stability. By sharing this, you can find ways to overcome the guilt so you can get better, day by day. I’m thinking of you.
Dear Pay Dirt,
I find myself in a tricky situation after my spouse passed away last year. His close friend has mentioned to me and other family members that my spouse said they could have his auto mechanic tools and gear if he died. My spouse never mentioned it to me and no provisions were made for any special gifts or any other people in his will except his two teenage children from a prior marriage and myself. He also named me executor of the estate.
I generally find the friend to be trustworthy and don’t think they are making this up. But I don’t really know what the context of this conversation looked like, as in “I’d give all that stuff to you before I let so-and-so have it,” or maybe it was just one of those things people say off the cuff without putting too much thought into what they’re actually saying. Or maybe he meant it but just forgot to tell me. Who knows?
My spouse and I were not married for a long time—only three years before he sadly lost a cancer battle. This person has been his good friend for many years before I came along. It seems like they’re expecting me to take their word for the situation and gift them these items, but the tools are worth quite a bit of money—we’re talking thousands of dollars here. Neither of the kids has an interest in becoming an auto mechanic like pop (nor any relevant experience), so the goods are currently just sitting in a storage unit across town.
It feels like if I don’t follow through, I’m being selfish or untrusting of this friend, and they will probably stop talking to me/having anything to do with us as a family. I don’t want to cause any bad feelings or division with people who were close to my spouse and can share memories with the kids when we get together sometimes. But on the other hand, those items can be sold to increase his children’s inheritance (and mine, obviously, though the children have more need for financial security since they’re young and still in school). Is it wrong to not just give these mechanic tools over? Or am I doing the right thing by putting the goods up for sale and splitting the proceeds with the kids?
—Stuck in Neutral
Dear Stuck in Neutral,
I’m so sorry for the loss of your husband. I hate that your time was cut so short. His children are very lucky to have someone who is looking after him, especially when it comes to matters of his estate.
You may already know this, but by law, you do not have to give your husband’s tools away to his best friend. In case you missed it, in last week’s column I picked an estate attorney’s brain on what to do with a person’s assets if that item is not stated specifically in the will. Assets travel because of writing; unless it’s specifically written down, it typically belongs to his estate, dependent on state laws. So, this means the tools are yours to do with them what you wish, even if that includes selling them and putting the money toward his children’s education. And while his kids do not currently want any of the tools, they might one day. Their tastes might change as they get older and they might regret not having the opportunity later on.
No one likes giving to people who expect or request things when someone dies. Even if his friend is trustworthy and you believe him, this may be what’s adding to your hesitation. You could divide the tools—give him a few and then sell or keep the rest. Try saying this: “Thank you for being a great friend to my husband—I hope you’ll continue to be a part of our lives. While I believe that he meant to leave these tools for you, it’s hard for me to decide how his belongings should be divided with no clear directions in the will. Let’s meet in the middle.”
Ask if he could benefit from certain tools more than others and then go from there. He may surprise you once he realizes your full intent. If he insists that he receives everything or you feel he’s being unfair, keep them.
Dear Pay Dirt,
I’m launching a business that I expect to grow slowly for the first few years, but eventually, hope it’ll become my full-time income. For the moment, I make about $60,000 a year in my 9-5 job. I live in a very high-cost-of-living area and don’t have much in savings right now. (The good news is that besides about $3,000 on a credit card, I don’t have any debt either.)
I’m looking forward to the day when I can quit and take my side hustle full-time. I want to be able to quit and focus on my business the second I’m financially able to—the burnout from working two time-intensive jobs is real. But I need to be able to support myself in order to make that happen and feel secure.
So, how will I know when I’m financially able to quit and move to full-time in my own business? My plan is to save what I make from my business, first to build up an emergency fund of six months’ worth of expenses, and then to add another year’s worth of expenses on top of that as a cushion enabling me to quit my current regular income. Are these markers too high? Too low? They seem like nice round numbers, but if there’s a smaller target that gets me safely out of my day job faster, I’m all for it.
And I’m also wondering about the right way to hold these savings as I build them up. The emergency fund I’m thinking should be in cash, maybe a high-interest savings account? But what’s the right way to hold the year of income? I have a brokerage account, so investing it there would be easiest, but I don’t have the time to choose individual investments for a portfolio. Would using an index ETF be a viable option? Or is there a better vehicle? I work in finance, you’d think this would be easier for me!
—Want to Be Free to Freelance
Dear Want to Freelance,
I love the fact that you’re ready to be your own boss! Freelancing full-time can suck but it can also be highly rewarding, which outweighs the bad. It all depends on the day—I digress.
You’re on the right path, which is figuring out how much money you should have saved before resigning. I always recommend saving between three to six months of your living expenses as an emergency fund if you’re self-employed or have a family. Another option is to save $10,000. I would advise the first option because you said you’re launching a business that will grow slowly. I don’t think saving another year of expenses on top of three months will really make a difference except add to your exhaustion. But you’re right to be thinking about your bank balance.
One of the number one reasons freelancing can be challenging, besides finding affordable health care, is your cash flow. Clients don’t always pay on time or quickly. As a freelance writer, I’ve seen a lot of writing gigs that mention they have up to 60 days to pay your invoice after it’s submitted. Not everyone is like that but that’s something to keep in mind as you move forward.
You’re also on the right track with thinking about stashing your cash in a high yield savings account (HYSA). Due to the current market conditions, you’d most likely lose money investing, reducing the amount you have saved. Even active investors are having a hard time. But the one thing about investing is that it’s meant to be done for the long haul to make the most cash possible. HYSAs are experiencing higher than normal returns so make sure you select one with an annual percentage rate (APR) of no less than two percent. Have fun!
Dear Pay Dirt,
I’m a millennial who, like many of my generation, got a late start in a career. The career I have now is fine enough, and I’ve been doing it for about 10 years. I recently bought a condo, and then wound up in a ton of debt (pet issues, teeth issues, etc.) that I am slowly paying off.
Here is my issue. I could stay in this career for the rest of my working life, but I wouldn’t be as fulfilled. I want to go back to school to a graduate program that would further my career goals and put me in a situation where I would be much happier. When I finish school, I’ll be making a minimum of $40,000 MORE than I make now which is already in the mid $60,000. However, during the two years of this program, I would be unable to work and would need to take on another $70,000, minimum, in student loans. On top of that, I have a child who, about the time I would finish the program would be finishing high school.
I’m very torn on if I can really afford to do school. Do you have any advice on how to figure this out and how to make sure I have enough to live on during the two years of school without drowning back in debt (I no longer have any student loans from my undergrad).
—Stability or Chasing Dreams
Is there another way you can pivot your career without attending a graduate program? This may be cheaper than taking on substantial student loan debt while still giving you an opportunity to support both you and your child financially. Another option worth exploring could be researching other graduate programs offered at other schools. Depending on the field of study, there may be a more flexible online program that would allow you to continue working, even if it’s only part-time.
Given the scenario you’ve described, the financial return of obtaining your master’s degree could outweigh the hurt your finances will take. If you feel confident you can make this work in two years and will have definite employment after graduating, go for it. You will need to figure out how much you need for living expenses and then figure out a way to obtain it.
Some graduate programs have graduate assistantship programs that receive free tuition and a small stipend for living expenses. You could also try to find scholarships to use for your living expenses while utilizing loans to pay for your degree or vice versa. If this degree will require you to take out student loans to cover your living expenses, you have a few different options.
If you’re eligible to apply for federal student aid, you can take out up to $20,500 in unsubsidized loans per school year as a graduate student. You can also apply for private student loans to help cover your expenses in addition to federal loans. If after making some calculations, you decide you can’t make it work, take time to save, earn additional money in your spare time, and lower your living expenses until you can. Good luck.
When I met my husband 10 years ago, he had been divorced for two years. “Lindy” turned into a party girl after their divorce. Never around for the kids and very flaky. We have custody of their two children. Lindy was out of the picture for years, but she reemerged and texted my husband. She says she’s changed her focus in life and is getting herself together. She told my husband that she’s moving to Australia to start a new job and new healthy life. A few weeks later, I come home from work and find Lindy in my house having a glass of wine…