Color of Money Live

May 08, 2014

Join Washington Post nationally syndicated personal finance columnist Michelle Singletary for an online discussion.

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I'm so glad you could join me today. I'm here to answer your personal finance questions. Or if you want to just talk about the top personal news that's cool too.

So let's get started.

Hi Michelle, I attended your talk last week, it was great! (shout-out to our new friend Yolanda!). My question is, how do I convince my boo (married for almost 5 years) to take some interest in personal finances if boo finds it boring. I'm a details person, boo is big picture, so I deal with most household items, including our taxes and finances...

Thank you so much. So the talk was one I gave for the University of Maryland, College Park. Graduated from this fine university and found my "boo" there. Or he found me! Now my daughter is attending, just finishing up her freshman year. She's doing great and saving us lots of money!

Anyway, about your boo. I get this a lot. If your local bring your honey to one of my session. As you found out I'm definitely not boring. Next one is at my church May 17 (FBCG in MD.) at 9 a.m. 

The thing is if your boo won't go to a program or workshop to become better at money management or at least interested enough to know what's going on, you still go. Then as best you can keep pushing the information on him or her. Cut out or email stories where people were left clueless about their finances after a spouse dies. Don't nag but don't give up either. It's okay for one person to be the treasurer concentrating on the finer details but you both need to know what's going on. You might also try having a short household budget meeting, say 15 minutes and sub up what's going on. If that works, you can schedule a longer meeting say once a month. 

My question has do with a balance of gifts and space. I have always gotten small gifts from my two sons for occaisions such as Mother's Day, birthdays and I cherish them now that they are grown, esp one son who is due for his 4th deployment. However, I have a very small home! How does one balance fond memories with becoming a borderline hoarder? I have the same problem with toys, baby shoes, first outfits. I have some Breyer Horses my mom kept from when I was a child that my kids played with; should I donate, toss or are they ever worth anything as collectables. Honestly how does one decide what to keep, what to donate and live comfortably without hurting anyone's feelings or the need to buy a bigger house? I have tried asking my sons to make me breakfast, have an annual sit down professional photo taken, write me a letter with some memory they enjoyed growing up but they feel incomplete without getting something (I've been asking for earrings the last few years as those are small and easy to keep). Any suggestions?

I totally understand. I still have the hair clippings from my son's first hair cut! My husband did the clipping so we could save money :)

But you do have to declutter. So since they were your gifts, you get to choose what's the most important. Then give away, sell or toss what doesn't really matter. What I try to do is look at stuff and if I haven't thought about it or do that mother thing of tearing up when you see an old baby or gift whatever, it goes. I just tossed some handmade gifts my kids gave me. They were tucked in the back of the closet. I looked at them. Smile. Tossed. But I still have the "Yo Momma" book my daughter gave me with a collection of the crazy things I've said to my kids over the years. That will NEVER be tossed.

And as I wrote in my column on Wed. let them give because it makes them happy. 

I loved your comments about Mother's Day and gift giving. The gift can also be the gift of time and togetherness. I love flowers, so each year I pick out a bunch of flowers and my husband and sons plant them for me. I help (just a little), too, and then we enjoy the flowers all summer long.

I really prefer gifts of time and togetherness. But as I wrote, sometimes tangible gifts can hold memories that time may forget.

Michelle, love your thoughts on your son's desire to give you a physical gift for mother's day. opening yourself up to him buying something for you (and giving him hints) shows a lot of respect on your part. Gives him a chance to do something HE wants to do for YOU, even if it's not exactly what you want him to do for you. It takes a big person to be able to bend on something that you feel so strongly about. He's going to feel great about spoiling you. That's your gift to him. :-)

Thank you so much. My husband sent me the sweetest note after I wrote that column. He's been frustrated I'm sure over the years trying to buy for me. But I get it now. It's not just about me this gift giving thing. People want to honor you and that's something we shouldn't deny them. 

This is why I have a life-happens savings account, but man is it looking a little low right now. What would be a better contingency if we have to: dipping into investments or taking on debt (with an aggressive plan to pay it off)?

Can I tell you something?

My life happens pots (I have a few) are pretty low too. Been helping a lot of folks lately (some with loss jobs) and so my extra savings are exceptionally low for me. 

I say that to say I really do understand. 

So we are cutting back. Passed on a chance to go to Wizards playoff games (ahem). Tickets just too much.

For you, I would not take about any money from a retirement fund if you would incur a penalty. So if you have investments you can dip into without that issue I would. I would not take on debt. 

Or you can, if you can, just wait and boost your life happens fund with the money you would aggressively use to pay off the debt. 

My 22 year old son has his first job, do you have a book you can recommend for budgeting, savings for a young person just starting off? He has an AA degree with no college debt, but seems a little overwhelmed with budgeting for housing, food (car and insurance I pay) and the enticements of buying fireworks, eating out, etc. I appreciate you input.

If it's okay, can I recommend my own book "Spend Well, Live Rich" (get the latest edition with the PBS logo).

I would also suggest "Get a Financial Life: Personal Finance in Your Twenties and Thirties" by Beth Koblinger.

I think that since the Clintons did everything they could to "ruin" her, she should make her millions from selling her story and live off of that. Potential employers see her as the "woman who did the President" and "not quite right". The woman has to eat. Hilary tries to put all of the blame on Monica. As if her husband wasn't there with his zipper down. It takes TWO!!!! Stop acting like the Leader of the Free World was molested by this intern. We are all adults.

Hold your outrage. 

I don't believe anyone just blamed Monica Lewinsky. But she was a grown woman who had inappropriate sexual relations with a man she KNEW was married. And Clinton was just as wrong if not more.

So the question now is should Lewinsky profit from a mistake she claims she wants all to forget. This is about her and her character. What's that worth? 

I have received handmade artwork from 2 of our 3 children. I am really looking forward to Sunday, so I can open all of it up! My twins are 5. The oldest is 8. He made something, but I can't even have a hint until Sunday. I love every picture, bouquet of dandelions lovingly picked (and, YES, everyone goes into water and brightens my desk for the day). Hubby usually comes up with a new piece of jewelry, more Kindle books for me (I LOVE to read) or something else on his own. He's getting better.

How lovely.

I guess the point for all of us is to give and receive well.

I recently moved into a smaller house, so I HAD to give/toss many things of sentimental value. Two things that helped: (1) Take a picture of the item, and create a digital photo album of "Gifts from the kids." (2) Remember that the sentiment doesn't depend on the object. I know that my kids wrote me love notes over the years and I can enjoy the happiness those memories bring without having all the notes themselves.

Love your idea of taking pictures of the items.

Thanks.

Hi Michelle, Nothing to add but your mom is in my thoughts. Sending you a hug!

Thank you so much.

And for many of you who ask, my mother is still in critical condition following a fire at her home. Even though she's still sedated I've been telling her about the kind words and prayers she's been getting through me. 

I'm going through a short sale - what is the best and fastest way for me to build my credit back up?

Pay your bills on time.

It's the number one way to build your credit back up.

But it won't be fast. It will take time so be patient.

http://www.washingtonpost.com/realestate/cash-out-refinancing-grows-more-attractive-for-borrowers-with-equity-in-their-homes/2014/04/30/c1bd4eb2-cefd-11e3-a6b1-45c4dffb85a6_story.html?tid=hpModule_6032d2d6-919e-11e2-bdea-e32ad90da239 It starts out saying that the cash out refinance boom that helped bring about the credit crisis was different from the new surge. But then the examples that they give - of moving unsecured debt into mortgage secured debt (probably unaccompanied by any resolve to stop accumulating consumer debt), and refinancing into a higher-rate mortgage in order to get cash to invest into another real estate deal are exactly the types of transactions that got us into that crisis. Apparently the rest of the Post doesn't read your columns.

I think it is very unwise to refi and take cash out to so call pay off consumer debt. And I say that because you aren't paying off debt at all. You are moving debt around and putting unsecured debt onto your home.

Now, if you absolutely need money to say fix a roof or make a very "needed" home repair, okay I can see pulling out out. But other than that it's a bad, bad move.

I gave myself one Rubbermaid type storage container for my childhood mementos and stuffed animals. What I could fit in there I kept, everything else is gone. I did feel a twinge tossing my well loved Cabbage Patch Kids, but honestly, was I going to keep them until I died?

LOL!

I hear you. I have a hard time throwing out stuff too. But you can't keep it all otherwise you will be on that show about hoarders. 

Love the bin idea too!

Hi Michelle, I have about $35-$40,000.00 worth of equity in my home and want to do a cashout refinance. Any tips?

Question.

Why?

Do you have a home improvement you need that you don't have the savings to cover?

Otherwise, it's not your money until you sell. So you would be getting debt.

Look, character just isn't a factor in this entire mess, and it never was. The Clinton's have become millionaires many times over, despite his lies about his affair with Lewinsky and her shrugging her shoulders over his chronic adultery because he could help her with her political ambitions. So, if Lewinsky makes a fraction of what they have made, good for her. Many people threw her under the bus because they approved of Clinton's policies, so overlook his moral failings. Why should she have to wear the scarlet letter and bear its consequences?

I think you are pointing the finger and asking the wrong question. 

Was Clinton a louse for that affair and others? Sure he was. 

Was Hilary right to stay with her husband? She thought so. And frankly we have no idea why she stay and so what if she decided to stay married for whatever reason. To comment on it is to judge. As a wife, you have no idea what goes on in a marriage.

But should we all have to answer for our own actions?

Our own character. She messed around with a married man. She made the decision to do whatever she did. It was wrong and it's wrong to profit from a mistake SHE says she regrets. 

Ever heard of two wrongs don't make it right?

 

Thank you for your great work, Michelle. After a heartbreaking loss in my family, I have a lump sum available to me to use toward my children's education. I am planning to put the maximum amount I can into 529s for both of them (one toddler, one infant). I've been advised to wait because the market is so high/inflated right now. Does that sound wise to you? It feels wrong to be keeping so much cash ($60K) in a regular online savings account, but I also understand the importance of timing. Thank you!

I'm so sorry for your loss.

I try not to give specific investment advice such as what funds or investments to put your money.

But I'll tell you what I did when I got a lump sum of money. I put all of it in my oldest daughter's 529 plan. That pot of money took a hit when the market was down but rebounded nicely to the point that we have all the money she needs to finish at University of Maryland. 

You can't time the market. Invest the money in a diversity portfolio. 

Hi, Michelle! Just wanted to thank you again for doing the January Financial Fast. I just paid off our car loan yesterday and it feels great to get that out of the way. And the fast mentality is still sticking with me--no more Target visits at $100 a pop with no memory of what I bought when the bill comes.

What a wonderful testimony.

Thank you so very much for sharing. 

I try to tell folks all the time that when you do the fast with the book "The 21 Day Financial Fast" it can change your financial life.

Congrats to you.

The ex is getting remarried and I'm pretty sure he hasn't done all the legal paperwork to ensure our adult special needs son is financially covered in the event of his death. Now that ex is getting remarried is there anything I can do now to protect my son or afterwards if the ex dies without a will and new wife inherits?

Please try to talk to your ex. Have a lawyer draw up a special needs trust and then sit down with the ex to go over it and fund it. Hopefully ex will understand this is about your son. I would also encourage you and ex to include the new wife. If she's a decent person she will also want what's best for your son.

Hi Michelle - My parents have been extremely generous over the years, providing my husband and I with no-interest / no-deadline loans for things like part of the down payment of our home, a bit of credit card debit, etc. The problem is they haven't kept track of how much they loaned us and how much we paid back. And... I used to have a great record of it, but then switched computers and financial tracking software and totally lost track a few years ago. We are still consistently paying them $200 every month, but I really would like to settle on how much we still owe. Any suggestions on how to handle this? Thanks!

So you know I don't like loans between family and friends. But it's done.

Why don't you have a meeting with them. Tell them you've lost track of what you owe. Pull together your bank records and ask them to do the same. If you can't figure out the exact amount, just ask them how much they feel you still owe. I trust they will give you either the correct amount or fair amount you both can agree on going forward. 

She can't get hired. Bill and Hill have been doing quite well for themselves. Sure she screwed up, but most of us make our mistakes and then go live our lives. Seems no one will let her do the same. Plus, I can't imagine she's making millions from a mere magazine piece, even if it is Vanity Fair.

She can't get hired in the type of job she wants, which would put her out there at press events.

So how about a different career? Or start her own business?

I honestly think she should forgive herself and I am in no position to judge her actions. We all make mistakes and sometimes those mistakes haunt us for a long time.

But again, just because Bill and Hilary have made money based on their skills, doesn't mean in desperation she should make money off an affair she regrets. If she does, how sincere about her regrets does that make her?

 

How is she making millions? She wrote a magazine article, she didn't sell a book to Harper Collins for some huge advance. Seriously.

Cuz such pieces are often the way to get a book deal. Another TV deal, etc. 

Otherwise why?

Were you thinking about Monica Lewinsky? I wasn't. 

Am now. Recalling the hole sordid thing. 

Something to consider with 529s - they are only for college. And since none of us know what our kids' development will be like when they are teens, it's a good idea to keep some funds aside for them in non-529s. I know a family whose child had serious issues, mental and physical, in high school and decided the child needed a private school. Their 529s were loaded with funds, but nothing outside to pay the HS bills, and their own finances suffered severely as a result.

Actually, thanks for this input. You are right. 

But I will add. I put a lump sum in my kid's 529 but my husband and I also saved money outside that fund for exactly what you suggest.

I also hope they have an emergency fund and life happens fund.

Shouting your (old, old, OLD) story from the rooftops is probably NOT the best way to forget the story. If she wanted to *really* profit by selling her soul oops I mean story, that ship sailed quite some time ago. I care about the details not one iota. Does anyone, really? Also can't imagine that there is no job to be had anywhere. Maybe not a start at the top, but start somewhere like anybody else.

Exactly!

My husband and I are looking at hopefully having kids sometime soon. We've been floating around the idea of him staying home with them. It would be tight financially, and we would have to temporarily stop all of our regular saving, but we should be able to make ends meet. (Although to be honest, seeing how much daycare costs, we'd probably have to stop all of our saving temporarily even if we both stayed working!) Is there any advice you have for families considering this decision?

I applaud you for thinking this out. But I would only caution that you need to figure out some way to keep saving. So perhaps from now until you decide to have the kids you can double, triple what you are saving. Or you can really look at downsizing, going over your budget to find every possible cut. You can do this, many couples do, but somehow you still have to find a way to save something for the kid, for your retirement or emergencies.

Hello Michelle. Always love your advice. I've been trying to find employment in the DC area for months with no luck (my company downsized). I've reached out to connections, applied for over 60 jobs, etc., yet nothing has panned out. I have had a few interviews, but for the most part, my resume just seems to be disappearing into a black hole. I continue to pray that our situation changes but it's difficult to stay positive when you have bills and a family to support. Any advice? Thanks.

I'm so sorry. I know so many people in your position.

I wish I have a great answer but I don't. Just keep trying even moving into other career areas if you have to. 

Go back to your college and see if you can talk to a career counselor for other ideas. 

Just keep plugging away and don't lose hope.

Hi, life happens fund getting low due to helping other people in their time of need. I really need to do some home repairs. Should I take money from retirement fund? I am 64 years old and @ retirement( no plans for anytime soon) will recieve a pension, 401,survivors benefit and social security.

Sounds like you have a lot of pots and security, so I would use the money you've saved.

I'm so sorry if I didn't get to your question. But have to run.

I hope you join me again next week. And if you have a pressing question that can't wait until next Thurs. just send me a tweet on Twitter at @SingletaryM.

Take care.

In This Chat
Michelle Singletary
Michelle Singletary writes the nationally syndicated personal finance column, "The Color of Money," which appears in The Post on Thursday and Sunday. Her award-winning column is also carried in more than 120 newspapers. In her spare time, Singletary is the director of a ministry she founded at her church, in which women and men volunteer to mentor others who are having financial challenges.

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