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‘They’ve taken out tons of store-brand credit cards’: Our best friends share our pandemic pod, but they’re reckless spenders. Should we step in and help?

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We have family friends that we’ve known since before we had kids several years ago. Since then we’ve gotten pregnant at the same time, weathered COVID-19 as a pod, and relied on each other for relationship and career advice.

One thing that makes us sad, though, is seeing all the rough financial decisions they make. They’ve leased cars they can’t afford. They’ve taken out tons of store-brand credit cards. They spend more than they take home on silly Amazon
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 stuff that they don’t need.

And they fight about money.

As we look into our future, we see summer trips and divergent school choices for our kids, in part because of the financial decisions we’ve made. We’ve been honest sounding boards during money fights, and we’ve offered to take savings/debt classes, but old habits die hard.

At some point, we’ll come to more frequent forks where we have more opportunities because we have more financial freedom. I don’t want to go down that fork without my friends. What can we do? How can we be good friends and not gloat and preach?

I’d love to have this friendship for decades, but I worry that the difference in spending and debt habits means our families’ paths will grow apart.

Pandemic Pod 4ever

The Moneyist:‘Change can happen without us noticing’: COVID brought us a year of epic uncertainty — but here’s what I know for sure

Dear 4ever,

They have everything they need right in front of them. YOU are the best personal-finance class they can have. There’s one thing that influences us above all else: our peers. Those we decide to compare ourselves to while making cupcakes on a Saturday afternoon. You are that for them.

I recently got a letter from a woman who was tired of her neighbors and coworkers trying to emulate her. But you should keep talking about your plans over your Chicken Maryland, and how you intend to realize those plans, until they tell you to stop. Be up front and transparent about your decisions. This is one time it would be a good thing, indeed.

Or, as this peer-reviewed study put it, “peer conformity shows a significant effect on consumptive behavior.” It does not sound like you are acting in a very “consumptive” manner, but your lack of spending should not go unnoticed.


People who realize they’re spending more than their peers — those of a similar socioeconomic status — will cut back on their spending. In theory, that is.

People who realize they’re spending more than their peers — especially those of a similar socioeconomic status — will cut back on their spending, researchers at the University of Chicago and the University of Maryland found in this paper published in 2018. In theory, that is.

That study found that wealth can lead to overconfidence and folly. Consumers in the lowest income group — those earning $40,000 a year on average — were more likely to be influenced by their peers and actually reduced their spending for the month by 19%. However, those in the highest income group studied by the researchers — those earning $120,000 a year or more — only cut back on their extravagant ways by 10%.

With that in mind, it wouldn’t hurt to mention over a game of Scrabble that you are putting money aside for retirement now.

While eating some Baked Alaska and playing Pictionary, you could nonchalantly say, “Johnny, tell Mary and Roger about the story you read on MarketWatch the other day. The one that scared the life out of us.” Who doesn’t like a good scare at bedtime?

I am referring to this story by my colleague, Alessandra Malito. By the age of 40, you should — ideally — have saved three times your salary, and max out employer-sponsored retirement accounts, such as a 401(k) or 403(b) plan. Talk about how you would like to share that retirement.

Ultimately, however, the couple who share your pod are the ones who should be writing to me. As much as you want to help them, you can only do so if they are willing to help themselves. You can’t live their life for them. You can live your own life, and lead by example.

You can email The Moneyist with any financial and ethical questions related to coronavirus at qfottrell@marketwatch.com

The Moneyist: ‘My husband told me that my $1,400 stimulus check will be spent on aluminum siding on our home.’ What can I do?

Hello there, MarketWatchers. Check out the Moneyist private Facebook
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 group where we look for answers to life’s thorniest money issues. Readers write in to me with all sorts of dilemmas. Post your questions, tell me what you want to know more about, or weigh in on the latest Moneyist columns.

By submitting your story to Dow Jones & Company, the publisher of MarketWatch, you understand and agree that we may use your story, or versions of it, in all media and platforms, including via third parties.



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Video: SEC's Hester Peirce on why the U.S. is behind the curve on crypto

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S.E.C. Commissioner Hester Peirce on the outlook for crypto regulation, and whether this will finally be the year we see a Bitcoin ETF.





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My husband doesn’t get along with my son. I brought most of the wealth into our marriage. How do I split my estate?

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Dear Quentin,

How do couples typically handle their estates in a second marriage? My husband and I have been married for seven years, and it is the second marriage for both of us. I have one adult child from my previous marriage; he has no children.

I brought the majority of our wealth to our marriage, including almost $1 million in my 401(k) and a nice home that is almost paid off; otherwise, we have no debt. My husband and I bought a second home together. We work hard to fund our new 401(k)s, and own a successful business together.

I am turning 65 this year, so estate planning is long overdue. My husband is five years younger than me, and we are both in very good health. We have two issues facing us: I see our retirement as living very comfortably on the monthly income generated by our 401(k)s, pension, Social Security, etc., and leaving whatever may be left to my son.


‘The other issue is that my husband no longer gets along with my dear son at all, and feels no obligation to get along with him.’

I am not interested in scrimping, but I want to be able to have enough money to last us until age 90 (or beyond) by not touching the principal. My husband is more interested in dipping deep into our savings, and living it up in retirement while we are young enough to enjoy it.

The other issue is that my husband no longer gets along with my dear son at all, and feels no obligation to get along with him, to the point that neither one wants anything to do with the other. As far as he is concerned, my son doesn’t meet his expectations, and so deserves nothing from me and certainly nothing from him.

I want my estate planning to be fair to both my new husband and my son. How do people typically handle this type of quandary? I think that I need to create some type of trust to pass on my share of our estate to my son. My pre-marriage assets involved my son as I pursued my graduate degree through night school and worked long hours throughout his childhood.

Second Wife

You can email The Moneyist with any financial and ethical questions related to coronavirus at qfottrell@marketwatch.com.

Dear Second Wife,

Don’t allow your husband’s feelings toward your son to influence your estate planning.

Your relationships with your husband and your son and your own plans for retirement are all fair game when making decisions about your estate, but your husband and son’s fractured relationship is their business, not yours. You worked hard for this money, and your son is your legal heir. Any effort by your husband to spend all of your savings and fritter away any inheritance that you intended to leave to your son should be resisted at all costs.

You have worked too hard your entire life to compromise your plans for a comfortable retirement where you have money set aside for long-term medical care insurance, unforeseen emergencies and/or your son. If you jointly own your home, you can leave your half to your son in your will, and specify it can only be sold after your husband passes away.

If you own the home, you can give your husband a life estate. Your son would pay capital-gains tax on the value of your home when he sells it, and not when you bought it. You could also make your son the beneficiary on your life-insurance policy, and/or gift him a certain amount of money per year to see how he manages and spends that money.

Figure out what is fair to yourself first before moving on to what is fair to your husband and your son. It’s OK to put your needs first. I caution against your dipping into savings at a rate that is beyond your own risk tolerance.

Ultimately, you are entitled to leave all other separate property to your son when you die — and, along with a financial adviser, set up a trust with that in mind for you, your husband and your son. Not necessarily in that order.

The Moneyist: ‘I cut his hair because he won’t pay for a haircut’: My multimillionaire husband is 90. I’ve looked after him for 41 years, but he won’t help my son

Hello there, MarketWatchers. Check out the Moneyist private Facebook
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 group, where we look for answers to life’s thorniest money issues. Readers write in to me with all sorts of dilemmas. Post your questions, tell me what you want to know more about, or weigh in on the latest Moneyist columns.

By submitting your story to Dow Jones & Company, the publisher of MarketWatch, you understand and agree that we may use your story, or versions of it, in all media and platforms, including via third parties.



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These money and investing tips can help you make a place for crypto in your portfolio

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Don’t miss these top money and investing features:

These money and investing stories, popular with MarketWatch readers over the past week, can give you a better understanding of bitcoin and other cyrptocurrency, and help you figure out if digital currency has a place in your portfolio alongside stocks, bonds and other traditional assets.

Sign up here  to get MarketWatch’s best mutual funds and ETF stories emailed to you weekly!



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