Pay Dirt is Slate’s money advice column. Have questions? Please send it to Athena, Christine, and Iris.. (Anonymous!)
Dear Paydirt,
A few years ago, my widowed mother gave my brothers and I each a small safe filled with gold bars, worth about $50,000 in today’s market value. I immediately put them in a safe deposit box.
Most of this investment was made while our parents were alive, some was gifted to us by their parents, and we were all told it was an emergency fund to use as a barter fund if society collapsed.
Currently, our 100 year old house needs a lot of spending and work. Should I respect my mother’s wishes and save for a “rainy day” or should I sell some (maybe half?) and do the work that is desperately needed on the house?
— Mommy needs a new chimney
Dear Mom,
This doesn’t seem to be about the $50,000, but about the emotional importance of the money. Spending the money feels like a betrayal. To complicate things even more, the $50,000 is tied to something valuable and tangible – money – which only adds to the emotional value. This isn’t a financial issue, it’s an emotional issue. Feelings about money are complicated, so it’s hard to say “spend your money on the chimney.” But if I were you, I’d spend it on the chimney.
Will society collapse in your lifetime? Will you wish you had a bar of gold at the end of the world? Will you regret upgrading your chimney as you walk through your neighborhood’s dystopian wasteland? Probably.
No one knows what the future holds, and while it’s wise to have financial reserves to deal with whatever tomorrow brings, you also need to plan for your life. nowAnd if your house desperately needs repairs, I would. Like you said, you could do both, spend some of the money and save the rest for a rainy day or apocalyptic future, whichever comes first.
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Dear Paydirt,
My aunt never married or had children. She doted on my brother and me as she traveled the world. She was easygoing and chatty, with no ill intent. My sister-in-law, on the other hand, was difficult and extremely introverted. After a few hours of hanging out with her, she would become very irritable and moody. My aunt retired to the same city as my brother and sister-in-law and tried hard to stay in contact with them. She would invite them out, over to her house, and often on family trips herself.
I wasn’t there, but I’ve heard the story from all sides. My aunt was in a no-win situation. For example, she offered to help cook and clean for Thanksgiving, which my sister-in-law took as an insult to her hosting abilities. She didn’t offer to help at Christmas, which also upset my sister-in-law. To make matters worse, a terrible storm came through while they were celebrating my nephew’s birthday. There were flood warnings, and my aunt asked if they could stay the night because she wasn’t comfortable driving. They told her to get a hotel room, even though there were rooms available. My aunt was hurt and complained to my mother, who advised her to give in and have them come over.
I visited my aunt more times in one year than my brother and his wife did in six years. She stopped sending presents to the kids and only sent cards. My sister-in-law complained bitterly about it. I had to walk away before I said anything negative. I mean, how dare I expect presents from this person when it’s so obvious I despise and hate her? Really?
My aunt recently offered me a large sum of money so that I can buy my own house. I work for a non-profit and with college loans and high rent, it’s impossible to save money. The problem is, I’m worried that the whole family will find out that I’m getting a lot of money from somewhere and that my brother and sister-in-law will be furious. My aunt has been fired from her last three jobs and had to stop renovations midway because she couldn’t pay the costs. We’ve already had a messy incident where we lost contact because my mother offered to take the older two kids on a Disney cruise, while my brother and sister-in-law just wanted the money for their own vacation. I really want to accept this gift, but I’m worried about what will happen if they find out. What should I do?
— A great gift
Big Gift
Accept the gift and let them rage. Your brother and sister-in-law can decide for themselves how they handle their big emotions. They are adults and it is their choice. You can’t change how they react to situations, but you don’t have to victimize yourself to accommodate their bad behavior. There may be consequences and you can choose how you respond to them, but ultimately their actions are up to them.
That said, since you’ve kept quiet about the issue, if they have a great reaction to the gift, it might be an opportunity to get it off your chest. You can do this without turning it into a huge, nasty argument. When the issue comes up and they inevitably get upset about it, share your side of the story. Tell the truth, but focus on your aunt and her feelings, not on their mistakes. As in, “Aunt Jane loves you very much and was hurt by some of the choices you made. I understand why.” They will almost certainly get defensive, but you are under no obligation to argue with them. There is no need to go into a lengthy explanation or analysis of why you feel that way. In fact, it could make the situation worse. Keep it simple. Let them have their say, and then give your perspective on the matter.
Before this conversation begins, it may be helpful to write down what specifically you want to talk about and what boundaries you want to set during the conversation. Know your limits, and when the topic comes up, set boundaries to keep the discussion calm.
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Dear Paydirt,
I am 22 years old and a paid second year PhD student. This is my first decent job and I had no savings when I graduated college, but by living frugally this past year, I have already saved nearly $20,000 this year (about $10,000 in retirement and the rest in an emergency fund). I am the type of person who gets anxious about making purchases over $100, even for necessities like new sneakers. Saving this much has reduced my stress, but I find it difficult to know if it is okay to spend a little money or how much I should prioritize continuing to save. This grad program is 6 years long, so I still have a long way to go before I earn a similar amount. What is the guideline for whether to spend money or save? What are my long term priorities?
—Scrooge McDuckling
Dear Scrooge,
It sounds like you’re a bit financially anxious. You’re very vigilant about saving, which is a good thing. But sometimes that vigilantism can make your life unnecessarily difficult. If you had $20,000 in the bank, you wouldn’t have to walk around in worn-out sneakers.
The solution is relatively simple: you need to set some limits on your money. If you have a specific savings goal you’re working towards and are putting money towards it each month, you won’t feel as uncomfortable spending the rest on things like shoes. What’s a good rule of thumb for saving? The 50/30/20 rule. Allocate 50% of your income towards necessities like rent, bills, and groceries. Then put 20% of your income towards savings. This could be a retirement fund, a bigger emergency fund, or a trip you want to take after the program ends. The remaining 30% can be spent on whatever you see fit.
This is a good rule of thumb to get you started, but you can adjust it to suit your preferences. If you’re worried about your income over the next few years, your long-term goal might be to build up an emergency fund so you don’t have to worry so much about future income. In that case, you might adjust the rule to something like 50/40/10: 50 percent for essentials, 40 percent for savings, and 10 percent for everything else. Decide what you’re comfortable with as a specific amount you want to save over the next year or so, and then decide how much you’ll save each month toward that goal. You can always adjust the rules you set for yourself in the future.
—Christine
Classic Prudy
The husband was recently promoted and relocated within the same organization. About a week into his new position, he forgot to bring his lunch. One of his coworkers who eats with him had been at the work site that morning and stopped by to pick up some food on the way, so he offered her what he had brought. The husband was grateful and told her it was delicious. Apparently, when she got home that evening, she told her husband how delicious it was.
#mother #left #specific #wishes #inheritance