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,
My husband and I are both around 40, have no kids, and have a combined household income of around $130,000. We have savings, retirement accounts, and no debt beyond a mortgage and his small, nearly paid-off student loan.
We also have somewhat different spending habits. Our finances are combined; I track our accounts, make sure the bills get paid, transfer money to savings, and do most of the talking with our financial guy. I have a good sense of what we can afford, and while I do my best to make smart decisions and don’t impulse buy, I also don’t fuss much about spending money. My husband frequently agonizes over small or medium-sized purchases, and I have to give him “permission” to buy a new PlayStation 5 or souvenirs on vacation.
This came to a head over Christmas gifts recently. He has a budget (that he came up with, not me) for his family, me, and the two good friends we exchange gifts with. He tracks things carefully; I try to focus on what kinds of gifts a person wants or could use, and just not go overboard. He usually handles those gifts, but this year he said he could use a little help. To me, that was reason to research a little and buy a nice household item I knew our one friend could use. But he was appalled by me spending his entire budgeted amount ($100) on one gift, and on a kitchen item at that, because it’s not “fun.” He insisted I cancel the order. I am frustrated because what’s the point if we can’t be generous sometimes? And how do we even talk about this when we have such different approaches to gift giving?
—Is He the Grinch or Do I Go Overboard?
I don’t celebrate Christmas, and I’m a chronically terrible gift giver because my economics degree makes me feel that non-cash gifts are inefficient (cue my annual tradition of reading the classic Deadweight Loss of Christmas). So, I asked the Oh My Dollar! forum community for help with this question. Many readers came to the same conclusion as me—at its heart, this isn’t a gift-giving issue. It’s a symptom of a lack of communication about financial priorities.
You mentioned that you handle most of the money and your husband asks for “permission” from you to make purchases. It sounds as if he usually feels capable of handling the holidays by creating his own budget that gives him “permission to spend.” So when you blew past his entire allocation in a single purchase without clearing it with him, he probably felt like the guardrails were off. Your generous gift triggered the exact stress he was trying to avoid by creating a budget. It’s possible he was being unrealistically frugal, but the time to negotiate about the budget is before you click “add to cart.”
It sounds as if your husband would benefit from more financial discussions to help him feel like he has the ability to make indulgent purchases. He’s already creating his own mini-budgets and asking you for permission to spend. Having an annual or quarterly budget meeting to talk about your money goals and make a “fun money” budget might help him loosen up and give himself more leeway to buy souvenirs on vacation without stressing.
Use one of these meetings to discuss how you think about gift-giving approaches and find common ground. Some questions to think about:
How does it fit into your family values?
Is it distinct from how your family feels about other charitable giving?
Where is it important in your budget?
Are mutual gifts decided together, or does one person take the lead and the other has veto rights?
What’s an appropriate amount for a family member versus a friend?
What makes a great gift for you?
Your husband might value “fun” gifts, while you value generosity and utility. Have a dialogue about these things before deciding on a budget. Consider a separate budget for gifts for occasions such as weddings, graduations, and birthdays. Once you find a mutually agreeable gift-giving budget, stick to it. And don’t give the other spouse crap about gifts, as long as they’re on budget and within guidelines. How much you spend on gifts is beside the point. No “perfect” amount fits all circumstances; it matters only that you’re on the same page with your spouse. One forumer did remark on your husband’s frugality in his allowance for (at least) five people: “A pound of butter is $3.50, so you can barely gift homemade cookies on that budget.”
Dear Pay Dirt,
We have a phenomenal nanny whom we pay on the books. She’s also a college student and, due to a complicated parental estrangement, is not able to get loans/aid. (She’s talked to lawyers about it—her mom is willing to contribute, but only if she reestablishes that relationship, which she isn’t willing to do. So she’s in a Catch-22 situation with her FAFSA.) She pays out of pocket and enrolls only in the number of credits she can afford.
We’d like to give her a substantial holiday bonus in appreciation of her hard work, and I was wondering if there was any way we could directly pay her tuition (or any other expense) so that she doesn’t lose a portion to taxes . I’d love to help her out as much as possible, as she really does go above and beyond.
—So lucky to have her
Dear Lucky to Have Her,
First off, thank you for paying your nanny on the books. I’ve worked with far too many household workers who are paid “under the table” and end up dealing with very high tax bills that shouldn’t legally be their sole burden. As long as you pay your nanny at least minimum wage in cash wages, you can compensate her with up to $5,250 tax-free tuition and books reimbursement as a benefit. There are tax savings for you as well: You won’t have to pay the employer portion of Social Security and Medicare taxes on the bonus you give her, as long as it is a reimbursement for educational expenses. Since you’re paying her above board, talk to your nanny payroll company or accountant about setting up this benefit. This isn’t the time to surprise her—you’ll likely want to speak to her about it ahead of time so that you can get the paperwork in order and make sure it’s what she prefers.
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Dear Pay Dirt,
My fiancé and I recently bought a lot, and we will be debt-free and in a home within a matter of years. I am estranged from my dad; we have not spoken in years, and to be frank, I have no desire to help him during his golden years due to his abandonment of us. He is getting older and has never been good with money management. His wife is a hoarder, and by all reports their property is in a horrendous state. My fear is that the authorities in his state will expect me to financially support him and pay any cleanup fees imposed by the county. Do I need to file some sort of paperwork with the court to prove estrangement from him? How do I protect myself and my assets?
Dear Estranged Daughter,
More than 25 states have filial responsibility laws requiring adult children to financially support their parents if the parents are unable to take care of themselves. Still, these laws are rarely utilized and almost exclusively invoked when a parent needs long-term care facilities but does not qualify for Medicaid or other social support. Filial responsibility laws are not designed to force estranged adult children to pay cleanup costs for hoarder houses.
These laws have been tested in court only a few times, and they’ve generally been over the cost of long-term care when the parent does not qualify for Medicaid. In a notable Connecticut case, a mother ran off to Greece after a stay in a rehabilitation facility, and the nursing home pursued her son for the unpaid bill. In my cursory search of filial responsibility case law, I could not find any situation in which the state sought adult children to pay for cleaning up a blighted property, especially while the parent was still living. The court could not compel you to pay expenses on your estranged parent’s home unless you were on the title for the house or had co-signed the mortgage. If you were to inherit a condemned property (because your father died testate or willed it to you), you could disclaim the inheritance and avoid those responsibilities.
If you want peace of mind, you can talk to an eldercare lawyer in your dad’s jurisdiction about creating a paper trail proving estrangement from your father. This could protect you if your father has nursing home debt in the future. But there’s no form you can file with the court. Instead, you would create and retain the records of lack of contact and his history of abandonment and pull them out only if a creditor comes a-knocking.
Dear Pay Dirt,
My twin and I are 21 and 12 years younger than our older brother. He and his wife have six kids between them and live a very lavish lifestyle. My twin and I share a studio apartment, are struggling with student debt, and still live off ramen. Our parents have health issues. Holidays are hard.
And our sister-in-law rules it with an iron fist. She has declared that gifts are only for the kids this year and that applies to my twin and me. We are adults now. It has always been a struggle with gift giving to our nieces and nephews. No matter how much thought we put into our gifts, they can’t compare with new iPads or ATVs. It is especially hurtful for our parents, since they can’t afford much.
Our brother doesn’t do anything his wife doesn’t like, and she doesn’t see a problem. I suggested we just pool our money to get something nicer for our parents, but my twin argued that our sister-in-law will take personal offense if we don’t get the kids anything. And then there will be hell to pay. I am stuck. We’ve tried activities and handmade gifts, and the kids have no interest in them. Thoughts?
—Giving Up on Gifts
Dear Giving Up on Gifts,
It’s unreasonable to expect 21-year-olds living off ramen to give lavish gifts to their niblings. It doesn’t matter if a small present doesn’t hold their attention compared with an iPad or ATV (Side note: What the hell?); you should let go of notions of matching what their wealthy parents give. You’re not your niblings’ parents, and you don’t have the same means as them. There may come a season in life when you can give expensive gifts (if you like), but you and your twin are not in that season.
Since your sister-in-law created an expectation of gifts, I agree with your twin: I would give your nieces and nephews some stocking stuffers to keep the peace. Nicely wrapped candy is an affordable option that most kids appreciate more than homemade trinkets. Maybe the sugar will fuel your niece and nephew’s ATV excursions, at least long enough to annoy their demanding mother. If it’s within your budget, you could also consider gifting an experience that your entire family can appreciate, like a visit to a museum or movie. Or propose a policy of skipping holiday gifts for extended family and instead focusing on pooling money for each person’s birthday to take the pressure off the holidays.
And if your sister-in-law’s “iron fist” continues to make the holidays a source of stress, consider trying a holiday celebration with your parents without including your brother’s family—perhaps they can visit his wife’s side of the family?
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My son is 17. He’s been in a relationship with a girl for the past year. She’s been through a lot, dealing with a severe medical diagnosis and several surgeries. I would characterize her as an anxious person generally, even before those things happened, and they both felt a lot of stress during that time. Thankfully, she’s much better now, and things seem to have normalized. What concerns me is the changes I have seen in my formerly confident and outgoing son over the last year. He has become anxious and frequently very down on himself, despite being a pretty accomplished and articulate kid. He has applied to a challenging university program, but says he doesn’t feel ready now.