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,
How do I forgive myself for a dumb financial decision? I’m 56 with no debt since I turned 50. I plan to retire at 60 and I have a nice nest egg. I grew up in a family that had a history of poor financial decisions (buying into MLM schemes, timeshares, huge credit card debt, bankruptcy filings), and I was determined to do better, but I had to learn along the way on my own. I am overall very proud of what I have accomplished.
In my late 30s, a trusted friend told me about his investment in a pharmaceutical company. I invested about $150,000 into it. Well, 20 years later the company has folded, and I lost all of my money. I keep perseverating about my choice and cannot forgive myself. I think about how I could have been smarter with my money. I’m so ashamed and can’t move on!
—Can’t Forgive or Forget
Dear Can’t Forgive or Forget,
Recently, I ran a financial wellness training program for 120 faculty and students at a college in the Southwest. The lead faculty person, who is in her 60s, loved the program. She said, “I realized I did some things right. But I also realized I made some mistakes. But I’m going to teach my daughters not to make those same mistakes, and their children won’t make them either.” I share that story because breaking the cycle of poor financial decision-making in your family and building a solid financial foundation for yourself is no small feat. You should be incredibly proud of what you’ve accomplished, especially considering you had to navigate this journey largely on your own.
Now, about that pharmaceutical investment… Ouch. Losing $150,000 is a tough pill to swallow (pun intended). It’s natural to feel frustrated, ashamed, and even angry with yourself for making what turned out to be a bad investment. You put your faith in a trusted friend and you both (I’m assuming) lost everything. He may have even lost more. The truth is, though, everyone makes mistakes in investing. When I was 22, I allowed my uncle’s financial advisor to put my first $2,000 into an account that charged me a 6 percent fee going in and a 2 percent fee going out. That $2,000 was all the money I had saved from a year where my annual salary from my book publishing job was $14,000. I was incandescent with rage at losing those gains to fees and resolved to learn everything I could about investing. What I learned changed my life: I decided to spend my career helping people make smarter financial decisions. But I also learned that dwelling on this mistake and perseverating over what could have been only holds you back from enjoying the financial security you’ve worked so hard to achieve. The key is to learn from your mistakes and move forward. You seem to have done that, in style. So, let’s get you to stop focusing on the $150,000 you lost so many years ago.
Instead, think about all the smart financial moves you’ve made over the years that have allowed you to be debt-free and on track for a comfortable retirement at 60. What were the specific decisions you made that got you where you are today? Write them down along with a list of ideas about how you can pay them forward, to help the next generation build wealth. Start working on that list and maybe then you can find a way to forgive yourself for being human and trusting someone you cared about.
By the way, I hear stories all the time about people who lose money, sometimes truly huge sums, by trusting the wrong family members, professionals, or just plain bad actors. In 2023, the Federal Trade Commission showed that consumers reported losing more than $4.6 billion to investment scams, more than in any other type. That’s why you have to thoroughly research and vet any investment opportunities, even those suggested by well-meaning friends or family members. Trust your own judgment and don’t be afraid to ask tough questions or seek professional advice when needed. You’ve done something truly amazing. Congratulations. Enjoy your retirement, whenever you get there.
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Dear Pay Dirt,
I am a stay-at-home mom of two and my sister depends on me to watch her two girls (6 and 9). She is currently engaged to a man with two sons of a similar age to my nieces. Neither of their exes is in the picture. His summer childcare plans fell through and now he and my sister are pressuring me to take on the boys as well. They are too young to stay at home alone and all the summer camp/day camps have been filled up for a month. I can’t handle the boys. To be blunt, their father can’t. They are high energy, don’t listen, and constantly fight each other. I have watched their father physically pry them apart during a fight more than once.
I told my sister that six kids were too much for me. She argued back that I have watched more on occasion. I told her the boys were too much for me and that if she continued to pressure me that she could go ahead and find someone else for the girls. She has backed down but has been terribly mean about it. I am tired of her attitude and lack of gratitude. I have been the one raising her girls since the divorce. My husband thinks we should start asking my sister for money to watch the girls. He is tired of all this as well. What should we do?
—A Thank You Would Be Nice
Dear a Thank You Would Be Nice,
Wow, what chutzpah! You’ve been incredibly generous in caring for your sister’s girls in addition to your own. Asking you to take on your sister’s fiancé’s two high-energy, misbehaving boys is, in my opinion, a step too far. You’re not running a daycare center. I get why you’re feeling overwhelmed and unappreciated. The question is, why doesn’t your sister?
It’s disappointing that your sister is being unkind instead of understanding, especially given how much you’ve done for her and her daughters since the divorce. I can imagine she’s overwhelmed—or perhaps just a bit on the selfish side. She wants to solve this problem for her fiancé, but she isn’t considering your life at all. Your husband’s suggestion about asking for compensation is worth considering. While the money isn’t the issue (or, is it?), you’re providing a valuable service that saves your sister money and, more importantly, stress. It’s not unreasonable to expect some form of payment in return.
Ultimately, you need to prioritize your own family’s well-being. If watching your nieces is becoming too burdensome or if she asks you to choose between having all four kids or none, then have an honest conversation with your sister about making changes. If your kids love their cousins and they play together nicely, then offer to keep them and talk through compensation. But hang tough about your future step-nephews. Young boys have a tremendous amount of energy. Keeping up can take its toll (said the mother of two boys who were once that age). Don’t feel guilty for setting boundaries, or for expecting a little respect and appreciation for all that you do to make her life easier. Remember, it’s easy to walk on a doormat. If your sister and her fiancé don’t want to pay for you to watch their children, and you know you can’t handle the boys without some backup, then stand your ground. If your sister truly values what you bring to the table, she’ll apologize, back down, and help her fiancé find alternate summer plans for his kids.
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Dear Pay Dirt,
I work with an attorney who shares office space with another law firm. The other firm hired a new paralegal (I’m one too) three months ago. Her boss complains about her performance—poor grammar, spelling, lack of attention to detail, does not know legal terms that should have been taught in her paralegal courses, etc. (She has a bachelor’s and is going to night school for another degree.) I sympathized with him as those are all necessary skills for a law firm, so I offered to help the paralegal as much as possible.
However, his most recent comments have really bothered me. He said she had “plateaued” and it must be because of her upbringing and background—poor, first generation, bilingual who still uses her first language at home, she grew up with English as a second language even though she was born here, etc. The thing is: This is MY background. I grew up extremely poor and went to overcrowded public schools. Even though I was born here, English was my second language because we spoke my parents’ native language at home. I did not even graduate high school. I took his comments personally. I told him I also grew up poor, with English as my second language. I told him I was sure she could learn just like I did; it just takes time. He said his clients are sophisticated and highly educated people and he cannot have someone who does not have a grasp of the English language. I reiterated that I could help her improve her skills and he said he’d greatly appreciate me helping her.
I now understand why my boss told me not to mention my lack of education to anyone in the office when we first moved here. Everything I know I learned “on the job” or by taking classes here and there. Yes, she probably should be more advanced since she has a bachelor’s, but the fact that he’s determined she is not good enough for him just angers me. Maybe I’m taking it personally when I shouldn’t, but I also feel like I’m betraying her for not telling her what he’s saying. It’s one thing when the comments relate to her capabilities (or lack thereof), but his comments about her upbringing just felt insulting. People always say to study, go to college, and expand your horizons, but his comments seem very much like the people who say, yes, help the poor people, but put them over there, not where I can see them. What do I do? Should I just keep trying to help her? Should I tell her that she should try looking for another job? Should I tell her exactly what the attorney thinks of her (and in turn me)? Am I just thinking too much of it because I see myself in his comments?
—Not In My Law Firm
Dear Not In My Law Firm,
The lawyer’s comments about the new paralegal’s background and upbringing are indeed insulting and prejudiced. It’s understandable that you took them personally, as they hit close to home given your own experiences growing up poor and learning English as a second language. It’s amazing that you’ve offered to help the new paralegal improve her skills. Your own journey is proof that one’s past doesn’t determine one’s potential for growth and success. I also believe with time, support, and hard work, she’ll flourish, just as you have.
The bigger issue is how biased this attorney sounds against those who come from less privileged backgrounds. His comments suggest a lack of empathy and a narrow-minded view of what makes someone capable and valuable in the workplace—or in life. As a person with many attorneys in my family (husband, sister, and cousins), I wonder whether this bias has negatively impacted his work. Attorneys are trained to give everyone a fair hearing.
While you may feel a sense of betrayal by not disclosing his remarks to the paralegal, it’s important to consider the potential consequences. Telling her could damage her confidence and create a hostile work environment. And, she probably already feels her boss’ contempt. Instead, focus on providing guidance and support to help her succeed in her role. If the attorney’s attitude persists or worsens, ask your boss (who already seems aware of this pernicious attitude in the workplace) for guidance. He may tell you to back off and mind your own business. Or, he might tell his colleague that you’re doing him a favor, and in exchange, you expect a peaceful and respectful workplace.
Ultimately, your decision to help the new paralegal speaks volumes about your character and empathy. I think you should continue being a positive influence and advocate for her growth. If it all gets to be too much for you emotionally, and the attorney continues to be insulting, you might have to share what you know with the paralegal and suggest she find a more hospitable working environment.
Dear Pay Dirt,
Are there any downsides to debt consolidation? My husband and I have amassed an embarrassing amount of credit card debt due to a collision of home repairs and out-of-control childcare costs in our coastal city. We’re in a better place financially now and are no longer resorting to the credit card month-to-month, but the size of the debt still scares me (about $50,000 total). I ran through the SoFi calculator and it looks like we could get a personal loan sufficient to pay it off in five years at a much lower interest rate than we’re currently paying on our credit cards (12 percent vs. 19 percent), and the monthly payment is less than we’re paying right now so we could definitely swing that. Is there a downside to this that I’m not thinking of?
—Consolidate or No?
Dear Consolidate or No,
There’s no doubt about it: $50,000 is a significant sum. Kudos for deciding you’re ready to bring that under control. Debt consolidation can be a smart strategy for managing and paying off significant credit card balances, and it seems like you’ve done your homework by running the numbers.
Before you pull the trigger, have you considered a balance transfer? It’s possible you could qualify for a balance transfer credit card that would allow you to move over most or all of your existing balances to a card with a lower interest rate or a zero percent interest rate. Bankrate just ranked the 15 best balance transfer cards for June 2024. The top-ranked card is the Wells Fargo Reflect Card, which offers zero percent intro APR for 21 months on qualifying balance transfers with a $0 annual fee. American Express Blue Cash Everyday Card offers 0% for 15 months for qualifying transfers, also with no annual fee. If you were able to transfer the balances that you owe to a zero-interest card, could you get most of your debt paid off in that time? It’s worth considering. On the other hand, if you pay late or miss a payment, your zero interest rate might jump as high as 29 percent.
If that option won’t work, make sure you understand the potential downsides to debt consolidation before you pull the trigger:
1. Origination fees: Some personal loans come with upfront origination fees, which commonlyrange from 1 to 8 percent of the loan amount. Ask questions and make sure to factor this and other fees into your calculations when comparing the overall costs.
2. Rigid payment schedule: Unlike credit cards, personal loans have fixed monthly payments for a set term. While this can be helpful for budgeting and staying on track, it also means less flexibility if your financial situation changes.
3. Potential for more debt: Consolidating your credit card debt frees up your credit lines, which in turn should raise your credit score. If you’re not careful, you might be tempted to start charging expenses again, digging yourself into an even deeper hole.
4. Credit score impact: Taking out a new loan and closing credit card accounts can temporarily ding your credit score. However, if you make on-time payments and reduce your overall debt, your score should rebound and even improve over time.
5. Secured versus unsecured: Some debt consolidation loans require collateral (like a car or home), which means you could lose that asset if you default. Make sure you understand the terms and risks before signing anything.
Whether you decide to move forward with debt consolidation or a balance transfer, you might also consider accelerating your debt payment plans by adding a strict budget, boosting your income (side hustle, anyone?), or selling unwanted items. The key is to stay focused on your goal and maintain the positive financial habits you’ve established. Good luck, and write back to tell us which way you decide to go.
—Ilyce
Classic Prudie
“Nell” is 19. I dated my husband all through her middle school years but after we got married (when she was 16), she changed. Nell became nasty; there is no other word for it. I witnessed my husband ask her, in a mild tone, to take her shoes off the sofa, and she cursed at him. She was downright cruel to her stepsiblings: She has told her preteen stepsister that she eats “like a pig” and tried to hit her stepbrother when he called her “fat” in response. We wasted nine months in therapy; I still don’t understand why Nell acts like she does.
