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,
My son is 19 years old and in college. He refused to get a job his first two semesters because he was too busy with his girlfriend, with whom he ended up sharing his dorm. I was not aware of this girl’s existence in that manner and now, because I let my son know how disappointed I am of him… it only made matters worse. In their mind, it’s him and her against the world. Yet neither of them work full-time. This is a gentleman I would always see with a book in his hand. How do I knock some sense into him?
—College Job
Dear College Job:
You don’t. Your son is 19 years old, and biologically speaking, he’s nowhere near ready to take on the responsibilities of being a grown-up. His brain will still be developing well into his 20s. But, he is legally an adult, and you have to let him start to experience the consequences of his actions.
But before we get there, how’s the rest of his life going? Is he getting good grades? Is he able to focus at all while being in this relationship? Is he letting his other friendships fall to the wayside? If he’s getting good grades and having fun, but you feel he should (or already promised to) contribute financially to his education, that’s one thing. If his grades are sliding and you think getting a job will be “punishment” enough to get him back on track, that’s another.
Assuming it’s the former, decide what you think his contribution should be. The next time he’s home, you can sit him down and have a conversation with him that goes something like this:
You: Son, we need you to help out with your college expenses.
Son: But I’m working hard for my grades and don’t have time.
You: In life, we all have to make choices we don’t particularly like, and we can’t fund your beer money anymore. We expect you to find a way to contribute X amount to your schooling.
Then stick to it. Don’t bring up the girlfriend. Don’t bring up what you had to do when you went to school. This is just about his agreement to help—you’re asking him to stick to that.
And a word of advice for you: don’t think making him get a job will get him to dump the girl. Instead, try the opposite approach: make friends. Invite her in. As my friend Michael likes to say, “Be on the acceptance committee, not the admission committee.” That way, it might be you, your son, and whomever he’s dating at the moment, against the world.
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Dear Pay Dirt,
Our oldest child is looking to buy a house with his two best friends. They have already started looking into getting pre-approved so they know what price range to look into. They are also setting up a joint bank account where each can deposit their share of household money (mortgage, utilities, groceries, and a little each month to save up for possible repairs).
I have recommended that they talk to an attorney to make sure they are covering their bases for co-owning a home with non-family members. I know there are different types of titles and that they should consider up front how they would handle things if one of them needs to move and the others want to stay. What other questions should they be checking with an attorney about, and what other considerations should they be talking about amongst themselves?
My husband and I have told them we’re happy to accompany them on tours of prospective houses to help them ask the right questions, and keep them from falling in love with a place before they’ve seen things like the house inspection. It’s been 20 years since we bought our house. Are there any questions we didn’t have to ask then that we should be asking now?
—Kids Just Wanna Buy a House
Dear Kids Just Wanna Buy a House,
I love that your kid is making such a smart choice for himself. The earlier you can buy a house, the wealthier you’ll be later in life.
Buying a first home is exciting, stressful, and scary, especially now. The real estate market is in a place it’s never been before: Interest rates are high, and so are home prices. In a normal economic model, when prices rise demand falls. Unfortunately, according to economists, the U.S. housing supply is short by over 7 million homes. So, the real estate market is behaving strangely.
The good news is your kid and his friends are on the right track. The attorney should set up a partnership agreement that outlines how much they are each putting into the deal and how they can exit should the need or desire arise. They’ll need to decide whether to buy as joint tenants, with rights of survivorship, or as tenants in common, where they each own one-third of the property. They’ll also need to write wills once they own real estate, just in case something happens. Finally, they need to decide how much they can afford to spend. Getting preapproved, rather than prequalified, means the lender will commit in writing to funding the loan, provided the property appraises out in value. It’s the right move.
Other issues will pop up, and how they deal with them will tell a lot about how well they work together as a group. As I recommend in my book, 100 Questions Every First-Time Home Buyer Should Ask, they should each make a Wish List and Reality Check. The wish list is everything they want in a home, including the neighborhood, school district, size, shape, look, and feel of a house. Go right down to the kitchen appliances, if that’s important. The Reality Check is everything you can’t live without. For example, you might want a four-bedroom, three-bath house but absolutely can’t live without two bedrooms and two-and-a-half baths. They should all prioritize their separate lists, then come together and make a single list. Negotiating in good faith is a useful skill for this group to have.
Here are a few other things to think about. First, we’re mostly in a hot seller’s market, where buyers are often scrambling to make the winning bid. But not everywhere. As I write this, the housing market is cooling (a bit) in Florida, Austin, TX, and other places. So, they should choose an experienced real estate agent who does a lot of first-time buyer deals and may be able to guide them to finding a good deal.
Also peculiar to this market are pocket listings, which happen when listing agents advertise a property internally, to other agents in their company, before publicly listing it, giving them first dibs at bringing the property to their colleagues. Technically, pocket listings (known officially in the National Association of Realtors code as Section 17: Clear Cooperation) are against the Realtor code of ethics. However, they’re commonplace right now. I don’t think they’re good for sellers, because I think you want to showcase your home to as many buyers as possible. But if your buyer’s agent is well-connected, it could work in your favor.
Finally, in April 2024, the National Association of Realtors and some of the biggest real estate companies entered into a $418 million agreement that will supposedly change the way home buyers and sellers pay commissions when they purchase and sell property. Going forward, listing agents can’t advertise that they will split the commission with the buyer’s agent. The buyer is supposed to be responsible for paying the commission. And supposedly, with the listing agent taking only half of the total commission, the seller will lower the sales price.
There have been a lot of headlines proclaiming that this settlement will make things easier and cheaper for buyers and sellers. I disagree. I don’t think anything will change, and the agents I’ve been speaking with tell me that’s how it’s already playing out. But your kid and his buddies will have to sign a new agreement with their buyer’s agent saying that they will pay the agent’s share of the commission. Hopefully, they can work with the buyer’s and seller’s agent to ensure the commission gets paid out of the sales price, and doesn’t require them to do some fancy footwork with their lender.
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Dear Pay Dirt,
My husband and I are closing soon on a HELOC for some major home repairs. Our bank has an option to convert it to a fixed-rate home equity loan. The interest rate we’d be able to fix it at is about three points higher than our existing mortgage, but actually a point or so below the usual market rate right now.
I came of age in the 2008 financial meltdown, and I’ve heard so many horror stories about adjustable mortgage rates that I’m tempted to go ahead and lock it in, then try to refinance if we need to in a couple of years when rates are better. But I’m also hearing that it’s likely rates will soon drop, in which case we’d have locked ourselves into the higher rate for no reason. Depending on how I think about it, it’s like we’re betting against ourselves—or like expensive insurance. How do we figure out what to do?
—Fixin’ for Trouble
Dear Fixin’ for Trouble:
A home equity line of credit (HELOC) is a fairly expensive game right now. That’s why interest rates are so much higher than for a 30-year fixed-rate loan.
But let’s address your concern about adjustable rate mortgages (ARMs). ARMs have some built-in protections, including this: They can’t go up more than one or two percentage points per year, and are limited to no more than 5 or 6 percent total. Still, that’s something, so I do understand your concerns. It’s scary to think your interest rate can float upwards when you’re borrowing a significant sum. But there’s good news for you here, too. The interest rate on an ARM can also decline.
My husband, Sam, and I initially chose a fixed-rate mortgage when we bought our house. After interest rates started falling, we went with ARMs, for our primary home and rental properties we’ve owned, and then refinanced as interest rates came down. We started at around 8 percent and ended at around 2.6 percent, and saved tens of thousands of dollars over the years because ARMs are typically less expensive than fixed-rate loans.
But that isn’t necessarily true when it comes to HELOCs with an adjustable rate. Because investors are jittery about HELOCs at the moment, it’s tough to get those loans securitized. So, I’m thinking, take the conversion and lock in your home equity loan. If interest rates decline later this year or in 2025, you can always refinance. And, yes, if that’s how it plays out, you’ll have paid a little extra for the privilege of a good night’s sleep.
Dear Pay Dirt,
I work in an education setting, in a small team, and it is demanding work. I was diagnosed with cancer and had to take a medical leave, as the pace would have been impossible with treatments and side effects. My two closest colleagues who I enjoyed working with were with me when I received the phone call at work. They SHOWED UP at the beginning, coming over to my house, supporting the projects that my departure left hanging, and one even cut my hair.
I was trying to see through one particular project, as I was the point person for everything. Decisions were made without me that made the continuation of the project more challenging than it needed to be (changing the already established and widely shared schedule, re-starting work that had already been done, etc). After the completion of the project, the same colleague who cut my hair threw me under the bus to our boss, sending an email that complained about something I’d done (based on information she’d given me) causing a problem. She had not told me about this problem that I could have solved with one phone call. Later, my boss told me that she’d given this annual project to this colleague to complete next year, despite working under the assumption that I’d be back by then.
I feel like my colleagues, who I was friendly with (if not friends), have edged me out of my job. They are good people. What happened? The thought of returning to work with them causes me a lot of anxiety because I don’t trust them. I attempted a conversation once, which I thought was honest. We’re all trained in non-violent communication and mediation.
—Cancer Took My Hair, My Friend Took My Job
Dear Cancer Took My Hair, My Friend Took My Job:,
Yep. This feels like a double gut punch. Your colleagues not only seem to have forgotten about you, but now one has moved in by undercutting your performance and taking over your responsibilities. I’m sorry you have to deal with this on top of your very serious health challenges.
Assuming you’re back at your job, you’ll need to figure out how to work with these people. You’ve tried to have a direct conversation with them. Perhaps you should try again. It’s possible that your colleagues believed you weren’t coming back—or, perhaps they saw an opportunity to get a leg up in a competitive, stressful world. Or, maybe as they took over more of your responsibilities, they felt more distance between you. If you can’t get to peace with them on your own, you could try a mediated conversation with HR and your boss. And, about your boss: While you talked to her about the annual assignment, have you spoken with her about what you’re supposed to do now that your work has been reassigned?
You may have an opportunity for redress. Under the Family Medical Leave Act, you’re entitled to return to the same or equivalent job upon your return from your medical leave. If your boss has permanently reassigned your primary responsibilities and refuses to put you in a nearly “identical job” with the same or substantially similar duties, responsibilities, status, identical pay, and benefits, you could talk to HR about your rights under FMLA. In that conversation, you can ask for help getting you back to where you were. You can also look into filing a complaint with the Wage and Hour Division (866-487-9243 or find a local office online). An attorney specializing in labor law would be able to walk you through your legal options.
Even if you get back your reassigned work, that won’t fix the bigger issue of feeling like your work friend stabbed you in the back. Only time will tell if you and your colleagues can work through this. In the meantime, make your health a priority. Because if you don’t have that, the rest of this is just noise.
—Ilyce
My good friend “Mary” set me up with her brother “Jim” in January, when he moved in with her from out of state. We’ve been dating ever since. While Mary was happy for us, she was sad to not have a partner herself. So when Jim told me in March that he was going to prioritize her feelings because she was having a hard time, I understood. (By that time we were a “pod” of three, and being the third wheel can be rough.) Initially, their close sibling friendship seemed nice. But then Mary got possessive.
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