Personal finance advice: I pay for a driveway but my neighbor’s … – Slate

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 apartment is in a converted house. One unit behind and two in front. My unit has a narrow driveway and I am the only one that can legally use it. There are signs. The other two units have to deal with street parking, which is notoriously hard to get.

“Jan” is in the other front unit. From what I gather, Jan runs an illegal home day care because she has a ton of kids and babies there all the time. I have already had to switch my bedroom because of the level of noise coming through the shared wall. I try to live and let live, but the moms will not stop using my driveway for their kid drop-offs. I work from home mostly but am required to go to the office a lot. I have already been late twice because some mom has me pinned in and will just be a “moment.”

I have knocked on Jan’s door with no response and left her letters warning her that the driveway is off-limits. The last time, I was running late and couldn’t get out. The mom was taking her sweet time to get baby supplies out of her car. I laid on the horn. The woman came up swearing at me and slammed her fist on the hood of my car before backing out of the driveway. That evening I put up security cameras facing my front door and driveway. I have a lot of evidence of Jan running a day care and people coming and going with kids using my driveway. My landlord isn’t the greatest but would shut down the day care and evict Jan. Or the state would. I really don’t want to get a little old lady evicted or get into a more serious situation. I just want to use the driveway I pay for. What should I do?

—Drive by Driveway

Dear Drive by Driveway,

This goes way beyond your parking if it is an illegal day care. Home day cares fall into a different set of regulations in many places, and it could be possible that it is licensed. Confirm with your county or state about the day care license, which should be publicly available information. If it is illegal, you should report it to authorities (not your landlord) and provide any evidence, such as the footage from your security cameras. An unlicensed day care is a risk for the children, and it is much more serious than being late to work.

If you find out that the day care is licensed or your neighbor just has a lot of grandchildren, you should treat it exactly how a business would approach the parking issue: Call a towing service. Or at least start a rumor that vehicles have been towed. Let your landlord know that you will enforce your rights to the driveway, find a local towing service, and put up a sign that cars will be towed (available at your local hardware store). Next time someone blocks you in the driveway, get out of the car and tell them that vehicles have been towed before. Word will spread, and no one will dare risk the driveway anymore. If you frame it as helping prevent them from getting their car towed, they’re more likely to comply than if you lay on your horn at a mother with a baby. In fact, laying on a horn might make someone vindictive and more likely to block your driveway in the future. So outsource that vindictiveness to a towing company that deals with it all the time.

Dear Pay Dirt, 

My husband and I have about $100,000 in savings that we hoped to use as a down payment for a house. When we actually started looking, any halfway decent areas are outside our price range because of monthly payments. We are essentially sitting on a very large sum of money that’s useless for our dream home. We need an area with good schools because we have a 1-year-old, so naturally, it’s the taxes that are really hitting us. Now that the fed increased the rate and we are in an even worse position than we were when we first started looking. I don’t know what to do. Should we lower our standards or wait it out?

—Rich Mom, Poor Mom

Dear Rich Mom, 

I recommend a combination of the two: Keep looking for a home in your target community with lower standards, but don’t stress about finding the right fit right now. You’re likely to be in a better position in just a few years if you can wait through the mess that is the current real estate market. Right now, there is a triple-decker burger combination of factors making the housing market extra spicy: low inventory, sky-high prices, and high-interest rates. Plus, a side helping of an economy teetering on the edge of recession.

You’ve already learned how quickly the housing market can change when interest rates go up, so there’s plenty of opportunity for the market to improve before your 1-year-old is school-age. (And, remember, you can always rent in your target school district while you look. Renters can attend school, too.) Meanwhile, you can take advantage of those rising interests by investing your down payment in a safer medium-term fund like a CD or Series I savings bonds.

If you do decide to buy right now, it’s unlikely you’ll get your dream house in the perfect location at the dream price, so you have to figure out what you can compromise on.

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Dear Pay Dirt, 

My partner and I (both mid-20s women) have been together for several years, and we’re looking forward to the future we are building together. We’re talking about marriage in a few years, having kids, and purchasing a home eventually. We have a lot of faith and trust in our happy, well-maintained relationship. However, my partner is significantly more wealthy than I am (by a factor of 10), plus she will have access to significant generational wealth in the future. We know we will benefit from having a prenup and a financial advisor(s?), but we don’t even know where to begin with taking financial and legal steps forward. It might seem like we’re getting a little ahead of ourselves, but queer people always have to put more effort into making our dreams come true. Gay marriage became legal in our adult lifetimes, so we don’t personally have LGBTQ+ role models who have been through this process at this phase of our lives. What questions should we be asking about what assets to merge, when, and how? Does it matter that I have some remaining student debt? How do we go about getting a prenup that we both feel is fair? How will we know we’re making decisions in our own best interest and the best interest of our future goals? Is there an order we should follow in doing these life things? Will these decisions affect the decisions we make about buying a home, sharing insurance, or starting a family?

—Fearful of Fumbling

Dear Fumbling,

I wish that more heterosexual couples would engage in the same kind of conversations and planning that many LGBTQ+ couples have been doing with their finances and legal documents. I’d have fewer letters to answer if more folks discussed finances before marriage. The good news is that this is nothing new in the queer community—without access to the bundle of rights and inheritance that comes automatically with marriage, many couples created legal documents and trusts (even sometimes adult adoption of their spouse) to try to provide the same legal protections. That’s one reason it was a case about tax law that finally overturned D.O.M.A.  So, luckily, many lawyers and financial advisors specialize in working with lesbian couples. In the past, you might find them by looking at advertisements in the back of your local gay newspaper or asking a friend. Nowadays, you can find an estate lawyer and a fee-only financial planner by searching the National Gay and Lesbian Chamber of Commerce or the Certified Financial Planner website for their “LGBTQIA Individuals/Couples” specialty. Even though we have access to same-sex marriage now, there are many other considerations that a queer-focused professional will be better prepared to discuss. They’ll better understand family planning costs and laws for donor-conceived children, the costs of gender-affirming medical care, and proactive legal steps if same-sex marriage is threatened.

Your list of questions has no perfect answers—but a skilled financial planner will listen to them and help walk you through making a plan for these different parts of your finances that considers your values and situation. I’d also recommend checking out queer-focused financial resources like the Debt Free Guys and my show Oh My Dollar! (cheeky plug) together to help start an honest conversation between the two of you.

Dear Pay Dirt, 

My husband and I are self-employed in the travel industry and winter is usually somewhat of a hiatus for us. When COVID hit, we were already running on fumes financially from the winter and unsure if we would be able to fulfill contracts in the shutdown, so we took out an $80,000 EIDL loan. 2020 ended up being a great year for us anyway, so we just sat on the money and even ended up buying our first house in early 2021 at 2.5 percent.

It turns out the effects of the pandemic were just delayed for us. Increases in the price of travel and uncertainty of variants tanked our business. Our revenue dropped by half in 2021 and 2022, which barely covered expenses. In the last two years, we’d blown through our savings, racked up $30,000 in personal debt, spent the EIDL, and have $9,000 on our business credit card. A lot of this money went to failed marketing attempts (hiring a disastrous boutique marketing firm) and a lot of it went to maintaining a basic and pretty unglamorous standard of living in one of the most expensive places in the country (we don’t drink or go out and live in a small town with not many dining options, the access to free recreation is the main draw here). We also owe $8,000 on our one car and I have about $5,000 in back taxes I’ve been paying down for like six years. I wish I had taken care of those smaller debts when things were good!

So here we are going into 2023, hoping we’ll get enough contracts to dig us out of this hole but I’m scared. We only have enough liquid cash to get us through February if new bookings are slow. All of our lines of credit are tapped, savings are dry, and we have no family safety net. I’ve been babysitting for extra money, but I feel like I’m sacrificing the energy it takes to snag multi-thousand-dollar contracts for the short-term $ 150-a-day pay off. I tried to get a debt consolidation loan, but my initial applications only got me about $16,000. The only “extra” money I have access to is about $35,000 in my retirement account, which is behind as it is and obviously almost beyond last resort.

All of this financial stress has strained the hell out of my marriage. My husband can’t or won’t acknowledge how tight things are, and his lack of urgency and attention to our finances honestly makes me want to divorce him. He’s not overly spendy, but he’s also not hustling like I am to try to find new work. Our division of labor has always been that I bring in new work, and he does the actual work. So he’s been in the habit of sitting tight until he has tasks in front of him.

We’re in therapy for that, but I still feel backed into a corner and don’t know how to proceed. I can’t shut down the business and get a full-time job because we do have nine contracts on the books this year, but we need more like 40. My professional network is very generous with referrals, but everyone I know took a hit last year and we’re all desperate to make up for a lean season. I can’t afford a divorce and maybe I wouldn’t even want one if things felt more abundant. We can’t move because our current work is tied to location, and the costs would offset any savings for years to come.

—Stuck?

Dear Stuck, 

It sounds like you and your husband are facing a challenging business situation and that financial stress has significantly impacted your relationship. Understandably, you feel backed into a corner and unsure of how to move forward, but you shouldn’t be the only one worrying about your household finances and business. You need to have a candid conversation about your financial situation and devise a plan together. Consider engaging a free business mentor from SCORE to make a plan for finding new gigs or new lines of revenue.

You need to rework your division of labor. Since you’re in charge of getting new gigs, you shouldn’t also be the one babysitting for $150 a day instead of making sales calls. Your husband should be investigating any work he can do when he’s not working already-booked gigs—it could be remote freelance work, daily gig work like you’ve been doing, or a part-time service job with flexibility. Getting a traditional job might take the edge off, especially if you can do seasonal work during the off-season. For example, I have a farmer friend that works as a tax office administrative assistant during the winter. Your husband must commit to working through these challenges as a team rather than waiting for you to solve them. Definitely don’t use your own retirement account to bail out your joint finances or business if you are stressed enough that you are considering divorce.

Establish a goal number of contracts that ensures you can cover expenses and a target date by which you need the booked. If you don’t reach, for example, 25 gigs booked by April 1st, consider shutting down the business. You can exercise cancellation clauses in your contracts or transfer the contracts to a referring business. Is it worth keeping the company if it is straining your marriage and isn’t paying your bills? Really examine if you’re throwing more money and energy into recovering the business because of sunk cost fallacy. Your business skills are valuable to traditional employers without the ups and downs of unstable income. A job opportunity might even be working for a competitor or a partner in the industry. There’s no requirement to keep a business running if it is losing money—bankruptcy or closing could allow you to settle your business debts and make a new plan if you don’t feel you can recover from this hole.

—Lillian

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