By Erin Lowry
Welcome to Money on My Mind, where our advice columnist Erin Lowry — a personal finance expert and author of Broke Millennial — helps solve your money conundrums. While we don’t hear enough about it, there’s a critical connection between our financial well-being and our whole human well-being. Money is a top cause of significant stress for Americans, and unchecked stress levels have been linked to issues from heart disease to diabetes to depression. Read on for advice on how to take control of your financial and overall health, one small step at a time.
Money conversations have a reputation of being uncomfortable, but the pandemic and heightened stress around finances have made them even more awkward right now. Even if you have your own financial house in order, and have managed to keep it that way through these trying times, you’ll find money can still be a pain point unless you communicate openly and honestly. That’s why I wrote my third book — Broke Millennial Talks Money: Scripts, Stories and Advice to Navigate Awkward Financial Conversations — to help us all learn how to have a healthy dialogue with important people in our lives.
As a financial expert, I’ve been getting a lot of questions about how to handle a few pandemic-specific money conversations. Here are three of the most common conundrums, and how to handle them:
“How can I ask my landlord for a rent reduction?”
This far into the pandemic you may think your opportunity to ask for a rent reduction has long passed. That’s not necessarily the case. In fact, my husband and I are gearing up to ask for our own rent reduction at the renewal of our lease. In many cities, like our home of New York, the real estate market has seen an exodus of people, meaning those of us who stayed are for once in an advantageous position. Rents have been dropping drastically around the city, so if you’d like to stay in your place, it’s reasonable to ask your landlord for a reduction.
The first thing you need to do is research the current market rate for your type of apartment in your area. It’s simple enough to see what a comparable apartment would go for on Zillow, StreetEasy, Hotpads, or Apartments.com. If you live in a larger building with many rentals, you may even spot listings of available apartments in your same building with the same specs (e.g. 2 bedroom, 1 bath and same square footage) and find out that they have been listed for less than what you pay.
This is exactly how we plan to ask for a rent reduction. Two of our neighbors moved during the pandemic, and we’ve been monitoring to see how much the apartments were relisted for. Currently, the relist is $150 less per month than we currently pay. Given that we consistently paid our rent throughout the entire pandemic, we plan to ask that our rent be lowered at renewal to match the current market rate. We are, however, willing to move if the rent isn’t lowered. If you aren’t willing to move, then the landlord does ultimately have the upper hand.
A critical element in this money conversation is to stay respectful and avoid making demands. Remind your landlord that you’ve paid consistently, even through financial difficulties during a pandemic (if that’s the case) and that given the change in the rental market rates, you’d like to see a rent reduction of [insert amount]. Don’t play your “I’m willing to move” card unless your offer is rejected. That’s when you can say, “I appreciate your consideration, but without a reduction in rent to match market rates, we do plan to move.”
Should you need a rent reduction because of financial difficulties, you should lay out a similar proposal about how you’d like to stay, but on your current income you could only afford to pay [insert amount here]. The response may be no, but if the rental market is sluggish in your area, then your landlord may actually prefer to keep you paying less than leave the apartment empty.
“My live-in partner lost his job, and I don’t know how to be helpful to him.”
You and your partner are far from alone in this; it’s an incredibly common situation. The first step in helping a partner who lost his job during the pandemic is to provide emotional support. In normal circumstances, it’s an emotional rollercoaster to be let go, but combine that with a global pandemic and you could have a recipe for issues like anxiety and depression. Depending on your partner’s profession, there also may not be many options for gainful employment right now.
With that in mind, it’s critical to first assess how the two of you can reduce costs in order to get by on a combination of your income and whatever savings you may be able to leverage (plus his unemployment benefits — which he should apply for ASAP, if he hasn’t already). In an ideal world, try to preserve your savings and attempt to live on what you alone earn. You two should also discuss your worst-case scenario situation in terms of cost cutting. For example, are the two of you willing to move into a family member’s home or temporarily live apart so you can each move in with a family member in order to save money? These are tough conversations, but if your financial predicament necessitates having them, don’t shy away.
Ultimately, a question you need to ask yourself is whether you’re willing to compromise your own financial goals to support your partner. Presumably, if you live together, then it’s likely that you’re in a serious, committed relationship. If you see a future together, the answer may very well be yes. But if you have the sense that this may not be your long-term partner, this moment may also make you question whether or not you want to potentially jeopardize your own financial future to support him. There’s no wrong answer as long as you’re honest with yourself and communicating openly with each other.
“My parents have been going through financial struggles recently. How do I talk to my siblings about helping out?”
Confronting the notion that parents are struggling financially is the conversation absolutely no one wants to have. It’s a painful place to be in as both the child and parent. For the parent, having to admit you’re in a financial bind can be embarrassing, and accepting support from a child can feel like a fundamental shift in the natural parent/child paradigm. It’s so uncomfortable that lots of parents may refuse to engage entirely. If navigating this with your siblings is an option, here’s some advice:
First, you should all share your own individual perspectives about your parents’ financial situation. It’s quite possible that over time you’ve each gleaned some insights based on comments your parents have made, or questions they’ve asked.
Next, there needs to be an open dialogue between all of you about what you each can realistically offer in terms of support. You need to be OK with the amount not being equal, especially considering each person’s own financial situation or comfort level. It’s also critical to keep in mind that the support children offer their parents in a time like this isn’t always financial — and that’s OK! Providing emotional support, transportation, or even having a parent move in are all ways to help without actually writing a check.
Finally, if your parents will not engage with you about their needs, but you suspect their savings won’t be enough to allow them to ever retire or cover later-in-life costs, you and your siblings could start an emergency fund earmarked for your parents. Each person contributes what is reasonable given their own situation. The advantage is that by setting aside modest sums early and consistently, you will be prepared to offer financial support if it’s needed.
Want to learn more about navigating awkward money conversations? Erin Lowry’s latest book — Broke Millennial Talks Money: Scripts, Stories and Advice to Navigate Awkward Financial Conversations — is available wherever books are sold.