Pay Dirt is Slate’s money advice column. Have a question? Send it to Athena, Kristin, and Ilyce here. (It’s anonymous!)
Dear Pay Dirt,
“Oh, the poor struggling doctors in America!” said somewhat farcically. But it actually is kind of true for a lot of physicians these days who have tons of schooling debt and work for big box corporations milking their labor. Here’s our situation: We’ve both been in training up until now, each making around $90,000, which is decent for a resident salary, living in a high-cost-of-living area. We have been essentially equal in terms of income and we split living expenses 50/50. I have $300,000 of debt (which is average) and my partner has $40,000 due to scholarships. In our marriage, we have decided to individually be responsible for our own debt. Now that we are recently married, my question pertains to the “yours, mine, and ours” account system.
In my first job, I will be making $250,000. Because of their own health concerns and personal preference, my partner has decided to work half-time and makes around $120,000. This is not a point of contention and I support anyone who wants to live a balanced life! The point of contention is that we each have very different saving styles pre-marriage. Even on a resident salary in a HCOL area, I put away $80,000 between a Roth IRA and a high-yield savings account. My partner does not place as big of an emphasis on avidly saving and their assets are around $30,000. My concern is how the discrepancy in saving styles will affect us going forward. Seeing how on the same salary I put away more than twice their nest egg, I worry that with the salary difference coming up (with me earning twice theirs), this divide will just grow. I worry about being resentful that I will be the party earning more AND putting more away due to different spending habits. (I also acknowledge that the differences in our debt burden may have characterized our respective habits. I live comfortably according to me—I have all the creature comforts I need, but didn’t feel the need to “spend like a doctor doctor” during training because I wasn’t at that stage of life yet.)
Our financial advisor has advised each party to put 25 percent of their post-tax monthly paycheck into savings. Thus, this “ours” account (which is a HYSA) grows at a glacial pace (in my opinion). We have the financial goals most people have: house downpayment, expenses for kids in the future, paying off our individual loans, maxing out our individual retirement accounts, and enjoying reasonable (not lavish) vacations and hobbies. I even suggested that it seemed reasonable to me to “live like a resident” for the next year or two and save all the extra. What do you think is an equitable “ours” account growth mindset given these discrepancies in earnings and debt?
—What’s Up Doc?
Dear Doc,
Actually, your question is about choices and decisions. The most impactful decision you’ve made to date is not talking directly to each other about how you save and spend money. That needs to change, if you want to have a long and happy marriage.
I wonder why you’ve chosen to fund a Roth IRA and put away money in a high-yield savings account but not pay down a significant portion of your debt. Likewise, I wonder why your spouse hasn’t taken some or all of their savings and paid down what’s left of their student loans. I understand wanting to have an emergency account and saving for a down payment, but having $330,000 worth of student loan debt will eat significantly into your ability to buy a house, let alone fund the rest of your financial goals, even with a combined salary approaching $400,000 per year.
You say that you don’t resent your spouse for choosing a more balanced lifestyle. But, I read an undercurrent of envy in your letter, even as your savings build. They have a tenth of your debt, and could be debt-free tomorrow if they chose to use their savings to pay off their loans. It will take some years before you’re in that situation. Perhaps you should each focus on paying off your own debts as quickly as possible and then start the process of building your financial lives together. If your partner is willing to continue to live on $180,000 per year, you should use everything else you earn (after you fully fund your 401(k)) to pay down your debt as quickly as possible. They should use their extra funds (after contributing to their 401(k)) to pay off their debt, and then stash the rest in savings.
If you choose to pay off your debt first, you’ll find it relatively easy (even in a HCOL area) to save for a home, kids, and retirement on your higher salaries. None of this can happen, however, until you and your spouse sit down and talk through your financial priorities. They have to buy into a shared vision of your short- and long-term goals. If you can’t agree, it doesn’t matter how much you both put into a shared account. You’ll always be watching the bottom line with frustration. And, that’s no way to live.
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Dear Pay Dirt,
I need to leave my husband but we can’t afford the divorce, much less create two households, and I’ve been advised given the particulars not to tell him a divorce is coming until I’m ready to serve papers, which I won’t be until our finances are in better order. No one is in any physical danger but his contempt for me and our poor communication and conflict are becoming more and more intolerable, and it’s affecting our small kids. He refuses to go to counseling (jointly or for his untreated depression) or to participate in financial advising. Unfortunately, I also have ADHD as a working mother of a toddler and kindergarten, with a demanding job and elderly parents needing increasing support, on top of the emotional mess and unpaid labor in my marriage. Even medicated, my executive functioning is maxed out. I’m having a really hard time grasping much less following through on steps proactively in that direction.
I’m the one paying the bills, literally I push send, and also manage decisions about what goes where and what to triage—and I’m the primary breadwinner while he uses his GI bill to finish his BA. He is supposed to cover certain designated bills directly and then transfer funds to me every month from his retirement pay, housing allowance, and small federal student loans.
Ultimately, we have been spending more than we jointly contribute, resulting in the decimation of my savings that I came into the marriage with (he didn’t have any), a joint payment plan to the IRS for underpaid estimated taxes while I was prioritizing credit card payments, and $25,000 and growing in credit card debt in my name for joint expenses. He is responsible for most of the overspending, while unable or unwilling to explain discrepancies in his transfers to me or his spending choices. Any attempts at active collaboration or discussion of changes we could both make lead to him shutting down completely or lashing out. The only lever I have to slow his spending down is to take him off my credit card. This almost certainly will lead to him making terrible choices that put us further into debt anyway (i.e. opening up his own credit card with terrible rates and running it up without telling me), and/or withholding the transfers he’s making to me now. So I’m not even sure that’s the place to start. I don’t have direct access to his bank account or income (despite multiple requests and the fact he has access to everything of mine).
I’ve consulted with a few divorce lawyers but they can’t really advise me on specific financial steps, and financial advising I’ve had or looked into doesn’t really seem equipped to deal with the specific, personal, and somewhat adversarial nature of needing to get joint spending under control with a completely unwilling partner. Even getting to a point of being able to afford a small studio nearby so we can swap off “nesting” with the kids during an unofficial trial separation would be such a relief though ideally I would be positioned to pay legal fees ($15,000?) as well as fully move all of us into two separate homes. Increasing my income above the current mid-figures anytime soon isn’t realistic—but he should graduate in a year and start earning a salary on top of his retirement pay. What steps should I take to get myself out of this mess?
—Can’t Afford to Divorce, Can’t Afford Not To
Dear Can’t Afford to Divorce,
Your situation is complex and emotionally challenging on so many levels. I’m not a divorce attorney so I can’t advise you there. I understand why you want to wait until your spouse graduates, but I can see the benefits of beginning an official separation as quickly as possible.
To make this happen, you’ll need to get your financial and emotional ducks in a row. Can you and the kids move in with a family member sooner rather than later? Can you temporarily rent a small apartment that’s big enough for just you and the kids that is close to their schooling? Can you meet with an accountant to go over your numbers and figure out how to divide your tax debt? You’ll also want to document everything that’s been going on. Keep detailed records of all income, expenses, and financial discrepancies. This will be crucial for any future legal proceedings.
Talk with your attorneys about the benefit of filing for a legal separation now, to protect your finances. If they think you should wait to file papers, quietly start separating your finances. Open a new bank account in your name only. Start redirecting your income there and use it for essential expenses. Open up a credit card in your own name, then freeze your credit with the three credit reporting agencies (Experian, Equifax, and TransUnion) to prevent new accounts from being opened in your name. Create a bare-bones budget focusing on essential expenses only. Cut non-essential spending ruthlessly. Pay the minimum on your debt, knowing that you’ll soon be able to direct more funds to getting your debt paid off. Set up an online account for your joint credit card and create alerts so that you’re instantly notified about any charge. Just before you file the official separation paperwork, take your spouse’s name off of your credit card and ask your credit card company to provide you with a new card number. That should limit his ability to access what’s left of your money.
When you officially separate your lives, you should be able to stop the financial bleeding. You’ll still be in a hole, but it’s your hole, and you’ll dig your way out of it. If your spouse gets a new credit card, it will need to be in his name only. Any debts he rings up would be his responsibility, not yours. This is going to be a long, complicated process. But, you’ll get through it. Just make sure you know what you want and keep your eye focused on that ball, no matter what happens. Take care.
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Dear Pay Dirt:
I loved my condo. It is technically a one-bedroom, but I put in a sliding door so the living room can double as a second bedroom and there is a small windowless storage area that I could cram in a twin bed. My sister moved in after she caught her boyfriend cheating with their roommate and needed a place to crash. She is paying rent but hasn’t had any success in finding another place these past few months. And she will not stop complaining. The birds and traffic keep her up when she is in the living room, she can hear me when I get up to make breakfast, but sleeping in the storage area makes her claustrophobic. In her opinion, the only suitable solution is for me to give up my bedroom. That isn’t happening. I am just so tired of the topic! How do I get her to stop?
—Room to Go
Dear Room to Go,
You’ve been a kind sibling. You took in your sister when she was at a low point, and made room for her. Her ungrateful behavior has got to sting.
Still, you need to put up some firm boundaries with her that will let her know she’s still loved, but that even love has its limits. So, the next time she complains about her bed, the noise, or anything in the apartment, just say, “Sis, I love you, but it’s time for you to find a new place to live.” Rinse and repeat as often as necessary.
Eventually, she’ll get tired of complaining without any response and will understand that not only will you not give up your bedroom, but that she needs to find her own space. By all means, offer to help her look for something affordable.
Dear Pay Dirt,
I (M 21) am going to graduate college soon, and I can’t stop thinking (or well, dreading) the idea of navigating the adult world in the U.S. I was lucky enough in college to do two short studies abroad in Europe, one in Spain and one in England, and I felt more at home there (especially in Spain) than I do in the U.S. There are so many reasons I want to move to Europe: walkable cities, functional public transportation, socialized healthcare, better labor and environmental protections, good food, etc. But I know emigration is HARD, logistically, mentally, and monetarily. I don’t know where to start, or even if I should. I know it would probably be easier to suck it up and stay in the U.S. Not to mention I’ve been hearing about how difficult it is for native-born people my age to find employment in Europe, so I can’t even imagine how difficult it would be for me as an immigrant. I guess my question is what your advice is for figuring out if I should stay or go?
—Want to Be In That Part of the World
Dear Want to Be in That Part of the World,
I’ve been to many countries in Europe, and I agree with you: They’re lovely. Many places in Europe are quaint, beautiful, walkable, and interesting. There’s great art, delicious things to eat, and stunning architecture. But unless you have an official way to become an EU citizen or British subject, it’s going to be tough to find a legal way to live and work there.
So, start there. Many of these countries offer a way to claim citizenship by genealogy. For example, there are three paths to becoming an Italian citizen: by descent, Italian citizenship by marriage, and naturalization. Jure Sanguinis, citizenship by ancestry, can be obtained if your mother, father, paternal or maternal grandfather, or paternal or maternal great-grandfather was an Italian citizen at the time of their birth. There are some twists and turns you’ll have to get through, plus a mountain of paperwork, but if you are successful, you’ll be able to pass down citizenship from generation to generation going forward. If you want to be a resident, you’ll need to live in Italy for at least 10 years before you can apply. And, you must have a way to work legally, so finding a company in the U.S. that will transfer you to Italy would be the way to go. To continue with our example, Italy, along with several other countries in the EU, also recently launched a digital nomad visa for folks with remote jobs looking to work in the country. If you can find a U.S.-based company that will allow you to work abroad, that might be another option.
There are companies that can help you evaluate these choices. Be careful that you don’t fall for a scam site in your haste to find a new home.
A faster way to start living abroad is to apply to graduate school in your country of choice. Make sure you know the language fluently, and once you’re there, use every spare minute to make the connections you’ll need to land a job that will allow you to stay after your education is finished. The nice thing about going to graduate school in Europe is that it’s more affordable than in the U.S. It will also give you time to assess what it’s like to actually live in a European country, and experience the negatives as well as all of the benefits life there will bring. Good luck.
—Ilyce
Classic Prudie
My boyfriend, “Chris,” is obsessed with a famous pop star, “Sparkle.” We are both gay men in our late 30s, and Sparkle has been a household name and a gay icon since we were toddlers. Chris owns every piece of her merchandise, goes to every tour, has multiple Sparkle tattoos, does impressions and dresses up as her for fun, and has even managed to strike up a vague friendship through social media in his line of work.