My Sister and I Have Always Lamented Our Lack of Inheritances. Then Her Husband Let the Truth Slip.

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Dear Pay Dirt,

As we approach middle age, my sister and I have spoken frequently about how different our circumstances are compared to our social circles. We know we will not receive any inheritance as our parents have no assets, whereas most of our friends expect to receive significant or even life-changing amounts. Because of this, we live more modest lives compared to our close friends despite our household incomes being very similar, as we are prioritizing saving for retirement and paying off our mortgages before old age. I am single and childless but my sister has been married for over 10 years and has three small children. Recently, my brother-in-law casually mentioned to me how much he stands to inherit from his parents. It is an astronomical sum of money and I had no idea his parents were so wealthy. He clearly thought I was already aware of his circumstances and their plans for this money. My sister has never even hinted at this.

Rationally, I know his inheritance is none of my business and my sister was not obligated to tell me anything but I feel so betrayed. She has always spoken as if we are facing the same financial future but in reality, her family will practically be millionaires. It’s made worse by the fact that over the years I have loaned them a lot of money. Sometimes for urgent issues like medical bills and other times for fun things like a trip to Disney for the kids. They have never mentioned trying to pay any of the money back. This never bothered me and I felt proud that I was able to help my family in this way. Now I just feel resentful. Am I wrong to feel this way?

—In the Dark

Dear In the Dark,

Ouch. I understand why this revelation stings. You and your sister have long shared an “us against the world” mentality when it comes to your finances. Learning she’s actually on a very different path is jarring, to say the least. But it doesn’t have to be the end of your relationship.

First, give yourself permission to feel everything that’s surfacing: Betrayal, resentment, confusion—they’re all valid emotions and understandable. Once the initial wave of emotion crests, however, try to muster up some empathy and grace. Perhaps your sister wasn’t deliberately deceiving you. Maybe she felt awkward or conflicted about her in-laws’ wealth. Maybe it felt like her husband’s future money, not “theirs” or “hers.” Or the inheritance always felt distant and theoretical, not relevant to her day-to-day life. Her secrecy likely comes from her own confusion rather than a malicious intent to deceive. It’s also possible that she doesn’t have a clear idea of what’s coming, despite what your brother-in-law said. When you feel ready, consider having a heart-to-heart with her about this. Use “I” statements to share how you felt blindsided and hurt to find out you and she actually aren’t in the same space money-wise. Then, listen. Give her a chance to share her perspective. You may find her motivations and feelings are more complex than they appear.

As for the loans, well, they aren’t really loans, are they? They sound like gifts, since you never had anything in writing or formalized when and how your sister would pay you back. In any case, they’re separate from the inheritance issue. You wanted to help your sister and her children. So, focus on the pride you felt in helping your family, both for necessities and experiences. Those gifts came from love, not obligation. If you’d like to reset expectations going forward, you can clarify that future assistance will be limited. But let your past generosity stand untainted.

Now, about you: You’re obviously disciplined financially and a kind, caring person. You’re making prudent choices for your own security and peace of mind. That’s something to be proud of. Don’t let this new information get in the way of your generosity or your ability to save and plan for the future. In fact, if you can pass these lessons down to your sister’s children, you’ll be doing them the greatest favor. I know it’s easier said than done, but try to stop comparing yourself to your sister. Your sister’s path is her own. Yours is still one of diligence and thoughtfulness, even without a secret inheritance. It sounds like you have enough, and you’re OK with that. Which, for my money, is the definition of happiness. With time and openness, you can find your way back to treasuring what you share as sisters, while respecting that you each have your own journey.

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Dear Pay Dirt,

I’m about to graduate, and due to extreme luck on my end, become financially independent for the first time in my life. I also have dyscalculia, which severely impacts my ability to conceptualize numerical concepts around costs, and I grew up in a home where one parent was financially abusive to the other, and to a different extent, to myself. I’m having difficulty figuring out what a realistic budget should look like from month to month, and what “good” balances would be between allotments for necessary costs, “spending” money, and savings. I recognize that a balance between the three is ideal, but I don’t know what a good model would be. I simultaneously don’t know where to begin and start feeling guilty when I try to estimate a monthly budget for non-necessities, such as coffee or longer-distance bus fare to visit friends. This blind spot is not sustainable in the long term, but I don’t know where to start. Do you have any general budget percent breakdowns you’d suggest or any models to look into? And related, do you have any budgeting apps you recommend?

—Numbers Aren’t My Friend

Dear Numbers Aren’t My Friend,

You sound like the kind of person who’d really benefit from pre-set budgets. Fortunately, there are a number to choose from. Here are a few you might consider:

Option one: The 50/30/20 budget. This budget divides your take-home pay into three buckets: Needs, wants, and savings. Sort the money you spend each month into those three percentages and adjust as necessary. You can also try the 80/20 budget, which is a variation where you put 20 percent of your take-home pay into savings and then spend the rest. The 80 percent might be too unspecific for you, but if you have debt, you can modify this to 70/20/10, which means you spend 70 percent of your take-home pay on your expenses, 20 percent on savings, and 10 percent on debt.

Option two: The envelope method, also known as the “cash in hand” method. Label an envelope for each of your regular monthly expenses, like your rent or mortgage, utilities, cell phone, transportation, debt, savings, food, entertainment, etc. Then, cash your paycheck and place the amount you’re going to spend on a specific category of expense each month in its envelope. Once you’ve used up the cash, you’re done spending in that category for the month. Because some of your payments will be digital, you can put a slip of paper in the envelope that represents that payment. Don’t forget to include 1/12 of any annual expenses and one-sixth of any semi-annual expenses. You might need an auto or homeowner’s insurance envelope for these non-regular expenses.

Option three: The go-to-zero method. In my work helping people make better decisions about their money, I created this take on zero-based budgeting, which helps you mentally wipe your financial slate clean. Start by writing down every cent you spend on a slip of paper or an index card. Then, take a separate piece of paper and write down your take home pay. Next, sort your cards so that each expense is in order of priority: Rent/mortgage, insurance, transportation, food, etc. You get to decide which comes first. Take the top priorities and put them down on the table in front of you and subtract the expense from the page with your take home pay. So, if your rent is $2,000 per month and your take-home pay is $5,000 per month, subtract the $2,000 and you’ll see you’re left with $3,000 to spend during the month. If the next bill is food for $1,000, you’ll be left with $2,000 to spend—and so on. When you’re out of money, you stop spending. Everything else gets cut from your budget.

What’s nice about my go-to-zero plan is that you get to see where and how you’ll run out through your cash, allowing you to make adjustments. If you notice that you’ll have an extra $150 at the end of the month, you can plan to spend it, pay down debt, or stash it in your emergency account. (As I told another letter writer recently, having too much money is never a problem, it just gives you options and opportunities.)

Finally, you say numbers aren’t your friend, but the fact that you’re asking these questions means you’re thinking about money the right way. And, with some practice, you’ll realize that building in some next-level necessities, like bus fare to visit friends and family, and even occasional treats, like those coffees or other fun things you’ll want to experience in your adult life, are possible. The good news is there are plenty of free apps online, or you can pay for something more robust. I’ve been using Quicken for more than 30 years, but an online spreadsheet (Google or Excel) will work just as well. The point isn’t the technology. It’s committing to spend significantly less than you make. That’s how you’ll become financially independent and start to build generational wealth.

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Dear Pay Dirt,

I work full-time but my wife works part-time because while the money is good at my job, the insurance is crap. Hers is pretty generous. We depend on my mother-in-law to watch our 3-year-old twins but her health isn’t good. She has repeatedly told us that once the twins are in preschool, she is scaling back to babysitting occasionally and we need to make alternate plans.

I have been looking into daycares around us because most are pretty competitive for parents. We are on the waiting list for a few. Out of the blue, my wife told me that she wants to have another child and to quit her job to stay at home. Her solution is for me to find a “better” job with good insurance. Honestly, there aren’t any in my field unless I quit entirely and try something else. Frankly, the idea of trying to switch careers without having my wife’s job to fall back on and trying for a new baby just makes me feel sick. When we first got married we agreed to just have two kids and juggling twins is more than enough for me. We’ve been fighting about the subject for a while and every time I ask my wife to spell out how this scenario works, she just says we will make it work. We are on a waiting list to see a counselor but I don’t know what to do in the meantime. Help!

—Two Is Enough

Dear Two Is Enough,

I feel for you and your wife. Navigating childcare logistics, career paths, and differing family size preferences is a lot, especially with twins in the mix. But just because you agreed to something early on in your relationship doesn’t make it a lifetime commitment. If you learn nothing else as a parent, things change: with your kids, sure, but also with your job(s) and even the so-called deals you make with your spouse.

You and your wife need to stop fighting and start listening to each other. Share your feelings, fears, and practical concerns about parenting and your relationship. Focus on the good stuff while you try to understand her desires and vision for your family. She loves being a mom. That’s a good thing, but not the only thing in a marriage.

Living on one income is harder than it looks, but it can be done if both people are on the same page. So, write out the nitty-gritty details together on paper. Research insurance options and crunch the reality of living on one income. Talk about how easy/hard it might be to find another job in a different field or with better insurance. Will you save money on daycare and babysitting? Will your wife take on more of the cooking, cleaning, and managing of your daily lives? Map out best and worst-case scenarios, and talk about what happens and how you might feel as you go through it. Having concrete data can move you from vague notions of “making it work” to solid plans.

I think you also need to talk about what’s changed for her. What’s driving her longing for a third child and being a stay-at-home mom? Does she love being a mother more than she thought? Is she unhappy at her job and believes this is a better way to spend her life? Is she sad that the twins are growing up and into the next phase of life? (I remember how that felt—heart wrenching!) Ask a lot of questions and then listen with curiosity and kindness. Be honest with her about your own vision for your family and limited bandwidth for more kids. You’re allowed to have preferences, too.

Consider compromises and phases, rather than an all-or-nothing shift. Could she continue working enough hours to keep her insurance? Remind her that in a few short years, when the kids aren’t needing her so intensely, she might be glad she kept one foot in corporate America. Would she agree to table trying for a baby until the twins start school and you’re more stable with alternate child care? Can you frame potential changes as a trial period you’ll re-evaluate after X months? You might talk through what it takes to get a new job. I’m hoping you and your spouse find a resolution even before you find a couple’s therapist. But at the end of the day, you and she will have to make a joint decision about whether you’ll bring another bundle of love into the world. If you both lead with empathy and love, a boatload of grace, and a willingness to get creative, you’ll come out alright, together. Rooting for you!

Dear Pay Dirt,

I have a junior in high school (and a sophomore) and we are starting the college-choosing journey. Our small family of four makes about $120,000 a year but we live in a high-cost area. We are close to living paycheck-to-paycheck. As college conversations go, I know about applying for FAFSA, Pell grants, etc. but I worry that our income is high enough that my child will not qualify for much financial support. Federal programs don’t take into account the cost of living, so on paper, we look good. I hate the idea of her having to get loans when we see now how predatory they really are. I didn’t go to college as I am a first-generation high school graduate and neither my parents nor the inept high school college counselor were able to help me figure out how to apply and pay for it, so I went right into the workforce. I also didn’t have the financial bandwidth to start a savings account as a single mom of two for so long. Only in the last few years have I been making enough money to loosen the purse strings a bit. I want to start planning. How can I determine what I can “afford” to spend to send my child to college?

—College Rich but Money Poor

Dear College Rich but Money Poor,

Navigating the college financial aid system is no small feat, especially for someone who’s never done it. Your kids are lucky to have your thoughtful guidance, even if you feel like you’re figuring it out as you go. The answer to how much you can spend is simple: Take a look at how much you have left at the end of the month, after you’ve paid your bills and put money away for your retirement. If you have $500 per month, then you can spend $6,000 a year on your child’s tuition. If you don’t have anything left, it will be a lot tougher to contribute. Look at places where you can tighten your belt: Maybe you can squeeze an extra $250 or $300 per month out of your paycheck. Just don’t think you’re going to give up your 401(k) or Roth IRA contribution to build up your college fund. As I’ve often said, you can borrow for college but no one will give you a dime for retirement. Consider not just your current budget, but potential future adjustments. Could you free up more cash by downsizing or relocating once both kids are out of the house? Are you able to take on a side gig or extra hours for a few years? Think creatively about short-term sacrifices that could make a meaningful dent.

Still, how much you think you can afford might be different than what a college thinks you can afford, although an increasing number of colleges and universities are providing free tuition, room and board if your income is less than a certain amount and your assets as “typical,” whatever that means.

So, let’s talk about affordability. The U.S. government offers a website where you can estimate your college cost for each college or university. In addition, the Department of Education requires each school to provide a Net Price Calculator, which shows you the amount your student will pay to attend an institution in a single academic year, after subtracting scholarships and grants. Each calculator will take about 10 to 20 minutes to fill out. Make sure you have your most recent federal tax returns, W-2 forms, and any statements of assets, like checking and savings accounts and 401(k) or IRAs. You’ll be expected to make a family contribution, based on your adjusted gross income (AGI). In the 2024-2025 school year, this will be called the Student Aid Index (SAI), which will appear on your FAFSA summary. Here’s a link to the Department of Education’s paper on Expected Family Contribution.

You’re spot on that FAFSA and federal aid don’t account for cost of living. But many colleges offer their own need-based grants and scholarships that do factor in local expenses. As your daughter narrows her college list, research each school’s specific aid offerings and policies. Some may surprise you with their generosity. A friend of mine is in a similar financial situation as you, with a slightly lower income than yours and a home that has substantially grown in value over the past 15 years. Her daughter’s school of choice carries a list price of $85,000 per year for room, board, tuition, and fees, but after taking into account their income and assets, the college reduced that to less than $30,000 per year. Her daughter will also get a job on campus to help defray some of those costs, and a small loan. My friend will pick up the rest, minus whatever her daughter earns at her summer job.

You also don’t have to rely on a college’s generosity. Encourage your daughter to look at a range of schools, including lower-cost options like in-state public universities or colleges with strong merit aid programs. She can also look at getting the requirements out of the way at a local community college, then transferring to a state university to finish up and collect her degree. That would cut the cost of her degree in half, or less. When it comes to scholarships, good resources include the scholarships page at StudentAid.gov and FastWeb.com, among others. Oftentimes, no one applies for local merit awards. Every little bit helps chip away at that total cost.

Loans aren’t ideal, but they don’t have to be completely off the table either. Focus on federal loans first, which have more flexible repayment options than private ones. And make sure your daughter understands the short-term, long-term, and unintended consequences of any debt she takes on. Kids have a hard time imagining how tough it might be to pay $500 per month in student loan debt while making ends meet at their first job. Framing it as an investment in her future, but one to take on judiciously, can teach her to be smart about borrowing, now and in the future. The most important thing you can do is help your daughter understand her choices (and yours!) so she feels empowered to make the smartest move she can. With careful planning, a willingness to compromise, and a whole lot of hustle, you’ll find your way forward.

—Ilyce

A few years ago, someone in my family told me about their ongoing love affair ad nauseum with another human other than their spouse. There has also been talk and some planning of divorcing their spouse. I was even asked to assist with housing, support, and care of children after the separation and divorce, if necessary. My knowledge of all of this has made family gatherings extremely uncomfortable.