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 grew up poor in a single-parent household. I grew up better off, with both parents making six figures. My parents were both good at saving, and good at investing money wisely. My husband knows we were better off (multiple trips to Disney World, all the fancy ‘80s toys, a large house with two spare rooms) but I don’t think he realizes just how well off. I’m just wondering if I should prepare him in some way for when my mom passes away, or go the “Surprise! We get a third of a multi-million dollar estate” route.
—To Surprise or Not to Surprise
Dear to Surprise or Not to Surprise,
I’m surprised that you’re married and your husband is not already aware of this. As a general rule, no one likes financial surprises from their closest loved ones, even if they’re good developments, so I would err on the side of telling him now. You’ll want to do some financial planning for that inevitability anyway, so there’s no real point in leaving it a secret until your mom passes away, other than your own reluctance to discuss it.
If you think the conversation is going to be uncomfortable, couch it in the need for long-term planning. You don’t have to drop it on your husband like a bomb; just note that he’s probably already aware that your parents are well-off, and you’d like to discuss how to plan for a potential inheritance. Then give him a sense of what that might mean in terms of actual assets.
Dear Pay Dirt,
My husband and I are thinking about having a baby in the next couple of years, but I’m getting extremely overwhelmed thinking about budgeting for it. We’re both employed in stable jobs and our combined household income is $150,000 a year. We live in New England (which is not cheap) but we purchased our first home as a fixer-upper, so we can comfortably afford the mortgage. We’ve both worked extremely hard at our careers, pulled ourselves out of really extreme poverty, and neither one of us wants to give up our jobs or go part-time.
We have about a year of income in savings, reasonable car payments on very reliable cars, and no credit card debt, but are drowning in six figures of student loan debt, and we both have chronic illnesses that suck up some money every month for care and medications. We also have some luxuries we spend on that I would really prefer not to give up—like a very nice gym I go to every day, an annual international vacation, and housekeeping service. We’re both in our early 30s but all potential grandparents are still young enough to be happily working full time and won’t be able to provide child care.
It sounds crazy because we do make a good income, and so many people who make less get by with kids, but how do people do this? I did a spreadsheet out of the costs for childcare, diapers, formula, medicine, health insurance, etc. and nearly passed out. We’re considering not even having kids at all if this is what the cost is like. How do people budget for this?
—Why Are Babies So Expensive?
Dear Why Are Babies So Expensive,
Welcome to America, where there is no universal health care, no mandatory paid childcare leave, some of the highest maternal mortality rates in the developed world, and a huge slate of impending policy changes at the federal level that will make all of this even more expensive! The reality is, having a baby doesn’t have to be as expensive as it is, but we live in a political and economic environment that makes it that way.
That said—and this is a big “that said”—you are correct that people make this work all the time, and with far fewer resources than you have. It may seem obvious, but it sounds like you need to think about whether you really want kids, and why. Some of the things you’re hesitant to give up are things that people often give up just because having children is time-consuming and draining. (I see that you go to the gym every day, which is great, but when you have a baby, things like that tend to go out the door in favor of things like occasional sleep.) So you should probably assume right off the bat that, unless you’re independently wealthy, you will be giving up some things you enjoy to have children, and that there are always going to be some unexpected financial surprises, whether they’re unanticipated medical bills, emergency childcare costs, or anything else that you can’t really plan for.
There are ways to manage, though. I had my first child at 38 and was not as well set up as you are. Some advice: Take advantage of your community resources, and find other soon-to-be parents who are in the same boat. Everything is easier and cheaper when you share resources, including time and money spent on child care, and expenses for your kid. You don’t need the zillion baby products that get recommended to new parents, and you can buy some of the more expensive items used. Your baby will not die if they don’t get farm-to-table artisanal baby food, and if you grew up without money, I’m sure you are familiar with the concept of hand-me-downs. (I wore hand-me-down clothes until I was old enough to get a part-time job and buy what I liked myself. I was not traumatized by it.) All of this might not be how you envisioned taking care of a child, but that’s why the question of whether you really want a child is important.
When I was in my early 20s, I wrote an essay where I said that I viewed children as “nasty, brustish, and short.” I still do sometimes, but not my child, of course. He is adorable, funny, smart, compassionate—and utterly irreplaceable in my life. The experience of being a parent is very difficult to describe to people who don’t have children because you don’t really understand it until you have them yourself. Trying to describe the specific quality of love you experience is like trying to describe a primary color that doesn’t exist. Your brain can only really process it in the encounter.
So this cannot and should not be a financial decision in its entirety. If you were still experiencing extreme poverty, that would be a good reason to at least consider postponing parenthood, but you are in a situation that is workable. The real question is, do you want a child? Not everyone does, and you absolutely shouldn’t go down that road if you’re only thinking about this because it’s “time.” The answer may also be yes, but maybe not right now. That’s fine, too. Ultimately, your focus needs to be on the question of whether you want to be parents.
Dear Pay Dirt,
My friend’s husband, John, died in 2016. He had two children—”Bob” with his first wife and “Matt” with my friend. John has cancer and knew his time was limited. My friend was the beneficiary of his 401(k) but he also told her he wanted it to be split between his sons after her death. Bob wasn’t around much in the years after John’s death but has been seeing my friend and her son quite a bit in the most recent years. My friend has been debating the boys’ inheritances, claiming that most of the 401(k) should go to Matt. Her take is that the account has grown significantly in the years since John died, mostly due to her financial acumen. (At least that was her take regarding the go-go years of the financial markets. She hasn’t mentioned it since the markets have tanked).
Last I heard, she had decided that Bob should only receive half of the value of the account at the time of John’s death because any gain after that belongs to her and should go to her son. I think she’s totally wrong. If John was still alive the account would have continued to grow. The only reason she has this growth to claim for her and her son is that John accumulated the 401(k) in the first place. She also has her own retirement and other saving accounts that will go solely to Matt, which seems reasonable.
On the one hand, I know that this is not any of my business, but she brings it up regularly and I would like to encourage her to reconsider. Technically, she inherited the account and it’s her decision as to who to choose as a beneficiary and how to divide it. But John made it clear that he wanted it split between his sons. Any thoughts on how I could shed some light on the unfairness of her plan? If she continues with this scheme I can totally see her stepson writing you a letter in 20 years or so: My stepmother stole my inheritance and gave it to my half-brother!
—Stop Giving Stepmothers a Bad Name
Dear Stop Giving Stepmothers a Bad Name,
I agree with you. Your friend should respect her husband’s wishes, and understand that it doesn’t matter how much the account has grown, her late husband views both Matt and Bob as his sons, equally. It’s perfectly understandable—and fair—that he would choose to split the account 50/50 between them. Whether she influenced the growth trajectory of the account is irrelevant. (And even if it weren’t, she may be overestimating her own financial acumen. If it’s a standard 401(k) plan I doubt there was any particular advice she gave that would have made much of a difference in a bull market.)
That said, it is none of your business, so I wouldn’t recommend trying to intervene. If your friend brings the issue up again, I think it’s fine to tell her you believe she’s wrong, but anything more would be inappropriate.
Dear Pay Dirt,
I quit a job at a toxic workplace in March 2020 after just nine months, and just as the pandemic shutdowns were taking effect in my area. I didn’t bother looking for a job for six months. It took another 13 months to land a low-level position. Most of my jobs have been in executive administrative support. I am now a receptionist/office assistant. My boss—let’s call her Elaine—is less than half my age (I’m 62), which I don’t mind, except for how little she understands the duties of a manager, much less the duties of someone with “rank.”
When I first started there ten months ago and didn’t understand the dynamic of the department, I’d agree with Elaine when she would say, “We don’t have to do that” or “They (the technical people in the department) should do that, it’s their project.” Now I’ve come to realize that nearly all of the work the previous manager performed has been passed on to me, while Elaine performs HR-related work (part of her role is as an HR generalist) for our department (and others) and handles expenses and travel for the vice president.
She casually tosses off unthinking comments as if she knows everything. Elaine’s favorite phrase is “fake it ‘til you make it,” and she’s certainly doing that. I’m getting frustrated because I’m falling behind in work. She’ll ask if there’s something that she can “take off my plate” and I tell her no because she gave it to me from HER plate. When I was out of work, I lived off my retirement savings. I’d quit, but I can’t take another financial hit like that because I don’t have that much in retirement savings. It was hard enough to get a job at 60-61; now at 62, it won’t be any easier since no one wants to pay me for my experience. I make $19 per hour which is not covering my mortgage, insurance, taxes, and maintenance. It’s not a great job market for everyone. Advice?
—Go Ahead, Give Me More to Do
Dear Go Ahead,
I’m sure that at 62, this is not the first irritating boss you’ve had or the first person you’ve had to manage upward. You need to assume that she is not going to improve anytime in the immediate future and figure out how to work around her flaws. When she asks if she can take something off of your plate, say yes, and ignore the fact that she gave it to you. Keep her apprised of what you have to do and where you are with those tasks and tell her when you’re overloaded.
In the meantime, there’s nothing stopping you from quietly looking for a new job. In my experience, people will absolutely pay for competent administrative support, especially if the person is reliable and easy to work with, and the labor market is very tight right now, so it’s a good time to job hunt.
—Elizabeth
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