I Have a Six-Figure Savings Account. It’s Completely Useless.

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 does one figure out what they’re even saving for? I’m reaching my 30s, and many of my friends are still in very “spendy” times of their lives—a lot of them spend big on going out/vacations/etc. by using the sentiment, “What am I even saving for?” I’m admittedly a bit more conservative with my money and try to save as big a portion of my salary as I can (while still making space for the things I enjoy). Because of this, I’ve amassed quite a bit in savings (just over $100,000).

But lately, I’ve been wondering, what am I actually saving for? The chances of affording a home one day in my high cost of living area are actually very small (a lot of people here are lifelong renters, even into middle age). Of course, there’s money for emergencies and retirement, but beyond that what is all this money actually for! How do people decide? It seems like the natural conclusion is saving for a home, but if that’s out of the picture, what then?

—A Saver With Doubts

Dear Saver with Doubts,

Congratulations on hitting a huge milestone: $100,000 in savings. That’s no small feat, and I’m sure you’ve made some tough choices to get there. I’d like to reframe your questions. You ask, “What am I saving for?” as if the only answer is something tangible: A house, a new car, a big, fancy trip. Instead, imagine if what you’re saving for are “options and opportunities.”

What happens if you save too much money? You can take a year off, retire early, help your family and friends, or contribute to a worthy cause. You can indulge your passions, whatever they may be, go back to school for an advanced or different degree, become a caregiver, or stay at home and game all day long. Having money in the bank (and hopefully the stock market) gives you the option and opportunity to explore and experience your life differently.

As for saving for a house, let’s reframe that, too. What if you continue to rent in your neighborhood but buy a vacation or investment property elsewhere? Could you start building a nest egg of rental properties or perhaps purchase a small commercial building that will eventually deliver passive income to help fuel your options and opportunities? You’re building financial security that will pay off down the line, just when you need it most. So, keep an open mind. Talk to people about their lives and investments. I have no doubt that one day you’ll find an opportunity worth pursuing.

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Dear Pay Dirt, 

My wife is in her first year as an attending physician and is absolutely burned out. She wants to quit and find a part-time position that would likely pay her around $100,000 less per year. We have a 3-year-old and recently bought a house in a high cost of living area based on the assumption that she’d be working full-time. We barely have savings after her eight years as an underpaid medical student and resident.

I want to support her choices, but I also know we can’t make up $100,000 just by cutting back on Starbucks. We would have to make life-altering changes to stay afloat financially. We fight whenever I  bring it up. She gets upset when I talk about the trade-offs, and I get frustrated when she refuses to consider them. How should we approach this problem? What can I do differently?

—Bad News Bearer

Dear Bad News Bearer,

Your wife must be under immense stress: She’s in her first year as an attending physician, getting used to all that working full-time entails. She probably feels that she’s short-changing everything else in her life, including you, your toddler, and your marriage. She’s worried about financially supporting the family without losing her mind, especially if she has student loans. (The average medical school graduate owes over $250,000 in total student loan debt and 73 percent of medical school graduates have educational debt.)

For what it’s worth, my doctor friends say the first few years as an attending are the worst. You’re getting used to the job, the hours, and the pushback you get from the healthcare industry, older/more established physicians, and even some of your patients. So, yes. Her life is tough right now. She knows you’re barely making it financially. What she doesn’t realize is that she has a partner in her success: You!

You’re watching her struggle and in addition to keeping your eye on the bottom line, you have to help her remember why she went through eight to 12 years of schooling and residency to become a doctor. Help her recall the trade-offs you both made so that she could achieve her dream. Back off on the money discussion for the moment and focus on what you can do immediately to lighten her load. Can you pick up more slack with your toddler? Do more around the house? Manage playdates, run errands, or find a way for your wife to get some personal time (and maybe a massage, if she enjoys that sort of thing)?

More concerning is that you two are talking past each other when it comes to money. She doesn’t want to give up her home and lifestyle, not after all the time and energy she spent to get there. That’s why she fights you whenever you bring it up. On the other hand, you don’t want to dig a hole you can’t climb out of. That’s fair, too. The good news is there’s a way through these tough times. It involves sitting down and talking about how hard things are now and the timeline for when you both envision them getting better. Make a list of the positives and negatives of her staying full-time. Figure out how long it will take her to feel better about work and stabilize your finances. It might take six months or a year or two to get there. But I find that once you put a number down on paper, you can mark time against it. Writing down financial goals helps put things in perspective. It’s your own 30,000-foot view. Then, check-in at three or six months and see how much progress you’re making. If she’s still unhappy, nail down the new pain points she’s feeling and work to relieve the pressure. Is there a way you can increase your income to help balance a reduction in hers? Is there a temporary part-time role she can take on while she recovers her equilibrium that would help save on child care or other expenses? Are there strategic cuts (beyond Starbucks) that will help you stay in your home and focused on the future while you work through this financial pinch?

If you can’t have this conversation calmly (and opening a bottle of your favorite beverage doesn’t help), then you might need a third party to help you get there together. Marriage counseling is where I’d start. See if you can find a way to communicate about your money issues that doesn’t sound (to her ears) like a threat, a give-back of hard-won gains (like the house), or a vision of a bleak future devoid of fun. Once you learn how to talk to each other about money, find a financial advisor you can trust to help you plan through the tough times and visualize all the good stuff that’s coming.

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Dear Pay Dirt,

My husband and I (38 and 40, no kids) have steadily worked our way up and after 14 years of marriage, I feel like we’re finally pretty comfortable. We have a combined income of just over $100,000, a house with a decent amount of equity, retirement accounts, a more short-term investment account, and a savings account (“high-yield” at a pitiful half a percent) with around $60,000 in it. Our only debt right now besides the mortgage is my husband’s student loan, around $10,000.

I guess my question is… what now? Should we pay off his loans? Should I be more focused on maxing out retirement savings? Put some money into renovating our house? We have a financial advisor, but he’s pretty low-key and just asks us what WE want. I’m not sure how to prioritize!

—We’re Comfortable, Now What?

Dear We’re Comfortable,

What a nice place to be at 40. Congratulations on doing so much right. Here are a few suggestions for taking it all to the next level:

First, take some of your low-yield savings and pay off those student loans. You’re probably paying 8 percent on the debt while earning half a percent. That’s not a winning strategy. And, while you’re at it, there are plenty of true high-yield savings accounts online. Some are returning 5 percent, or more. So, find one (Bankrate lists a bunch) and transfer a big chunk of your excess savings there so you can make your money work harder for you.

Next, absolutely maximize your 401(k) accounts. And, if you haven’t already, open up a couple of Roth IRAs. In 2024, you can plow up to $7,000 each in after-tax funds ($8,000 if you’re at least 50 years old) into those accounts, which will grow tax-free forever. Trust me: It’ll be nice to have the option of using tax-free funds in retirement. Once you’ve done all that, pay down your vehicle loan(s) and home loan.

As for renovating your house, that’s a huge project in and of itself. The question you need to answer is whether you need to do something (i.e., the roof is leaking) or you think you’ll live happier or better in some way. That could mean freshening up your decorating or perhaps tackling a larger project like redoing a bathroom or kitchen. Renovating your home is costly and it takes up a lot of time. And, unless your home is way out of date, it’s unlikely you’ll recoup the cost of the renovation within a year, according to the latest Cost vs. Value report. I wonder if you wouldn’t have more fun planning a special trip somewhere instead.

Finally, I’m all for steady and dependable financial advisors. But asking you what you want without offering a conversation around setting goals seems a little too laid back. Try engaging your financial advisor in a conversation about short-term and long-term goals. Put down some of each on paper and spitball some numbers so you know what you’re working toward. Then, go back to your financial advisor and have a more specific discussion about each item on your wish list and talk about what it would take to get there now, in five years, or in retirement.

Dear Pay Dirt,

My partner and I are finally about to move to a big city with a much higher cost of living compared to the smaller town we’ve lived in for the past few years. We’ve talked about this move for many years and are finally in a place with our careers where we can make it happen. We’re so excited! We’ve started the initial search of looking for apartments. But there’s one thing that’s keeping me up at night: How do we prep for this major change in the cost of living? Our rent is about to at least double, that is the easy part to prepare for. But I can’t stop worrying about everything else: groceries, transportation, nights out, hobbies, etc.

Right now we don’t have strict budgets, we just generally spend about $300-ish on our credit cards bi-weekly and pay it in full when we get paid and keep track of our spending in that way. I know realistically we won’t be able to save as much as we do now, but how does one prepare for this big of a financial change? Do we need to make a strict budget even though we’ve never been spreadsheet people?

—The City of $$$

Dear City of $$$,

Landing a long-time dream feels great, doesn’t it? But like most things in life, dreaming is safe while reality bites. I don’t love the idea of setting a strict budget now without knowing what your new life will cost. It’s like saying you’ll spend $10,000 renovating your kitchen before you discover that the stove you’ve been eyeing actually costs $15,000.

Instead, do some field research. Move into your new place and unpack. Take a month or two in your new city and see where you’re spending money. Focus on your behavior, not on the dollars. For example, if you find yourself eating out every night or ordering food for delivery, you know you’ll wind up in the red pretty quickly. So limit restaurants to one or two nights a week, and make sure you have enough food in the fridge so your default isn’t DoorDash. If theater or concerts are your thing, buy tickets monthly, not weekly. Make sure you have a healthy emergency savings account and are continuing to contribute to your retirement savings.

I do want you to write down what you’re spending. Use a pad of paper, your phone, a budgeting app, or a spreadsheet. At the end of the month, take a look at your credit cards and bank accounts. Are they in balance? Are they (hopefully) growing? If not, go back to your list of expenses and analyze where you’re leaking cash. You may have some extra one-time expenses that won’t be repeated or perhaps you met friends for drinks a few too many times. You should be able to pinpoint a few places where you can reduce your spending immediately and keep your budget in balance.

If the goal is to stay in this new city permanently, then you’ll need to find a way to pare back while still enjoying the social and cultural benefits your new home offers. Writing down every cent you spend will speed up that process and get you to the joy part faster!

—Ilyce

Classic Prudie

Recently, a local center focused on LGBT issues posted my dream job. I was not able to apply due to timing. My partner applied and got the job. I know she’ll be incredible at it. But I feel very envious knowing that my dream job exists and I missed out.