Pay Dirt is Slate’s money advice column. Have a question? Send it to Kristin and Ilyce here. (It’s anonymous!)
Dear Pay Dirt,
My partner’s sister is expecting her third child in December, it was quite a surprise, she found out at 20 weeks. I’m happy for her and excited about the baby, but concerned about the financial side. She and her husband haven’t worked in nearly a decade.
They’re barely getting by on government support, and my partner has loaned her money over the years. She currently owes him over $1,000—though she pays small amounts back, she borrows more than she repays. I don’t mind him helping with his own money, but we recently bought a home, live in a high-cost area, and are planning our wedding. With a new baby, I fear she’ll ask to borrow more than we can manage, especially since we want children ourselves in the next few years. He’s already given $200 for travel to appointments and baby expenses. We’d like to support them to an extent but need advice on how to set a budget and some boundaries about this.
—Loans for In-Laws
Dear Loans,
I hear you—you want to be supportive family members but you also want to protect your own financial future. And with a house, wedding, and kids on the horizon, you’re smart to think about this.
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Unfortunately, the fact that there’s already $1,000 worth of debt and growing might be a red flag that this tension is only going to get worse. It’s time to have an honest conversation with your partner about setting a specific annual or monthly budget for helping family. Maybe $50 to $100 per month? Whatever feels manageable without straining your goals. Now is a good time to get clear on what those goals are, exactly, and start there. Start with how much you want to set aside for your future—whether it’s homeownership or childcare costs—and then use whatever is leftover to figure out how much you can afford to give to family, if anything. Here’s a calculator to help you figure out some of the costs of parenthood, and here’s one to help with homeownership. They can at least give you a ballpark for figuring out how much you need to set aside today to plan for tomorrow.
This way, you can still be generous but there are clear limits for that generosity so that it doesn’t come at the cost of your own goals.
You could also offer non-monetary support, like putting together a registry, cooking meals, or helping with other household tasks. It can help to have responses ready for the inevitable requests that come from your sister-in-law, too. Something like, “We’re trying to save for our own goals, so the budget is tight this month, but we’d love to help by offering a couple of hours of childcare.”
It also might be worth discussing whether any future loans should have written repayment plans. Although honestly, given the track record, treating any money as a gift rather than a loan might save everyone stress and resentment at this point.
Ultimately, the key is to present all of this as a united front. Your partner needs to own these boundaries rather than making you the “bad guy.” Setting limits now will help avoid bigger problems down the road.
—Kristin
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My mother-in-law is in her late 60s and has well more than $100,000 in student loan debt that she has no plan to pay back. In fact, she’s told my husband and me repeatedly that her plan is to go to school until she drops dead to avoid repaying! She has two master’s degrees and is now applying for a Ph.D. program in a social science field where, even if she got a pay raise, she’d have no hope of making enough to pay her loans. I would (obviously) rather she at least considers paying her loans, but I also think student loans are predatory at best, so it’s not a battle I’m willing to have with her—unless we’ll be on the hook for her bad behavior after her death.
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