Hi Michelle, love the chat! I'm so glad that you're back to a weekly schedule! My husband and I are chugging along paying down his old credit card debt (just paid off one card in December and working on 2nd one!) and my student loans. Accomplishing one pay off was a big morale booster but any words of wisdom to help me not feel like this is going to take forever to do? We have an old house and it always seems like as soon as one thing gets paid off something different breaks and there' s a new bill to pay!
You so sweet. I'm excited about chatting with folks every week. It's the best part of my job. Hearing from you and hopefully helping you.
First, send some time really praising yourself for committing to paying off the bills and then doing it. Sometimes I find people are so busy paying off stuff they don't stop to reflect on how much they've changed and done to dig themselves out of the a hole.
Try this to boost your spirits. Look at that paid off bill. Often. Look at how much was on it and now that "O" balance. Post it somewhere private but where you can see that paid off bill and others everyday.
And it will take time because it took time for you to get into debt. But there is an end and my oh my when the end comes how you will rejoice.
How about others share with this reader that feeling of being debt free.
Hi Michelle...thanks...I am 60 and still working fulltime. I have zero savings, just emerging from bankruptcy over 4 years ago, and just keeping up, feels great though, because before I was underfunded always, and overwhelmed. My only debts now are a $6000 Visa bill @ 8%, at the limit, and my car payment for four more years. Should I pay off the Visa as far as the money goes, or keep some or all in savings? I have no retirement coming up except social security, so want to pay the Visa off when I get my tax refund this year. It would be a huge weight off my shoulders to be nearly debt-free, as I prepare to live on far less. I will continue to work parttime though, if I retire any time soon after reaching 62. What do you think, though? Thanks
Do both, save and retire the Visa bill. I guess I shouldn't ask after the bankruptcy how did you get $6,000 on a credit card, but that's old news, right?
So put a little in a savings account, maybe $1,000. Then take all the money and pay down the Visa bill. And as soon as you can get rid of it totally. Then take the money you were using to put on the bill and boost your savings.
Also, if you can and your health allows, you probably need to postpone even thinking about retiring at 62. You really need to build up more retirement savings. Work as long as you can. You will find it very hard to live off just Social Security.
Hi, Michelle. You've always advised people to pay off debt. I came into a small inheritance -- enough to pay off my mortgage (my only debt). But the interest rate on that is low. Meanwhile, the stock market has done well. Wouldn't I be better off putting that money in my retirement fund at a higher rate?
I would pay off the mortgage. Without a doubt if you plan on staying n the house for a long time.
Paying off that mortgage is a sure thing. The stock market isn't. It's doing well now but what about tomorrow or the next day or the next day.
Since about 30 to 40 percent of people's monthly expenses is housing getting rid of that burden is an immediate jump to your cash flow. So use some of that money to invest if you want.
Why are your chats going to a half-hour? That doesn't seem like enough time to have a back-and-forth among you and the readers. Is this another bone-headed idea from the WaPo online managers?
Come on, "bone-headed?" That's not nice. Although I'm hoping you mean that's not enough of me for you!
We are trying the half an hour and seeing how it goes. I've got so much work, two columns a week plus my weekly email newsletter. All of them take reporting and writing time.
The chat used to be every other week (not weekly) because of my time crunch. I want to chat with readers regularly and the half hour allows me to do it weekly and get to my other duties.
But we shall see. If I find you all aren't satsified, I'm willing to go to an hour.
Let's just see first.
Would love to see more articles on caring for aging parents. Especially when the parents are being obstructive and uncooperative. We're scrambling to deal with a disastrous financial situation, after years of trying to get the grandparents to discuss the topic - and even now we're having to drag every bit of information out of them. Also the quandary: how much do we jeopardize our long-term financial well-being to keep the parents off the streets?
My dear I'm on your street now. Was on that street with my father-in-law, who resisted help until it was almost too late. I know exactly what you are going thu. All of it. Including wanting to shout "I TOLD YOU SO."
But you can't. You help the best you can. You give the best advice you can. Get non-profit help. One one thing you don't do is mess with your own financial health. That won't help the aging parents if you go down with them.
I will be writing about this more.
I'm a single woman, making ample income to afford a home, but I'm just not certain if it's better to continue renting, given the fact that property values continue to drop. I'm curious if you think in this current market, it's better to rent, than to buy? Thanks!
I always view a home as a home not an investment. It's also an opportunity to stablize your housing cost (Somewhat. And I say that because every homeowner knows there are so many other costs to homeownership)
So is it the right time? If you want a home and you can afford a home. Just buy smart. Talk to real estate agents in the area you're thinking about buying in. Also, don't get a house mortgage that is more than about 30 to 36 percent of your net monthly pay.
Dear Michelle, Thanks for all of your great advice. You've helped me get out of debt (except for my fairly new mortgage, which I got with a great interest rate and overpay every month). Now I will be having my first child. My husband and I have been married less than a year. We have our separate accounts that we came to the marriage with plus we have a shared checking and savings account. We each put enough to pay our shared bills in the checking account and if there is extra, we move that to savings and every few months we each agree to put another chunk into the savings account, so that is building nicely. A child adds so many known and unknown costs. How do we budget for that? Should we just put most of our income into the shared account leaving ourselves a little guilt free spending money?
Sounds like you had a good system. And it worked. Me, I favor putting all the money together and yes, having some guilt free spending cash. Go to this link
And search for "budgeting for a new baby." You will find some good information.
We WaPo readers get annoyed at the management's constant tweaking of the online chats, website, etc. And yes, I am a paying subscriber to the dead-tree edition of the Post and yes that gives me a right to complain about the website!
No problem. And you are so right. In my book, as a paid subscriber, you totally get to voice your complaints. I treasure you. I welcome your input.
But just know we keep tweaking and changing with all of you in mind. Really we do. We just want to bring you more and quality stuff with the limited man or woman power we have.
Why has the Post been getting rid of so many blogs, and now shortening chats?
Again, time, manpower, people's attention span. Many people joining me are doing so at work or on their lunch break. We are just trying to serve you.
But let's see how this works. It's already 12:27 and I'm struggling to get to more questions. Will get to as many as I can. However, waiting for me is my editor for my Sunday column. I could have finished it late last night but decided to spend time with my kids and new puppy (why oh why did I let those darn kids talk me into a dog!)
A major difference between me and my 18 and 22-year-olds is that at a comparable age I basically wore sweatshirts and jeans. They have what I consider a lot of clothing, accessories, and makeup (bought with their money) and often sighing over not getting more. I find myself getting infuriated with it; yes it's their money but it seems like they should save it for a future car, life happens, an apartment/furniture in the future, etc. Also, any good books for them in terms of teaching finances so it doesn't just come from the parents?
I completely get your frustration. Even now as a professional I don't spend much on clothes, hair, accessories, etc. Just not a priority for me. Never has been.
Give them time. Teach them. And they are watching you. My 17-year-old has a job and as much as she complained about me not buying her enough clothes, she won't spend much of her money to buy clothes now (YEAH!). Here's a good book, "Get a Financial Life" bu Beth Kobliner. It's personal finance for people in their 20s and 30s.
I am recently retired, wife still working for at least two more years. No debts. I would like to borrow $50,000 at the current low rates to make some home improvements. We would have no problem paying the money back with our incomes. My wife says no take it from my Roth (@ 800,000 in it) I want to borrow. Any input
Listen to your wife. If you have the cash, use it.
But I hate debt and you probably knew that. Or save a lot of what you need from current income and use the rest from savings.
Are you still doing this? After years of health concerns and spotty employment I am nearing the end of my tunnel with my last debt(student loans). What helped me to stay focused was to compare current progress to where I was x years ago, then the gratitude just overflows. Slow and steady the race can be won.
I am. And thanks for your testimony!
It's more beneficial for an hour. How is it that Prudence and Hax have 1hr and you want 1/2 hour? That's not fair to your listens. Maybe skip the 2 columns and do 1 column, but PLEASE MICHELLE don't give us 1/2 hour
I hear you. I hear you. But skipping the columns is not an option. Syndicated. Obligated.
I am married with 3 small kids. We currently have a monthly mortgage of ~$800/month and are looking to sell our house and move to a better school district. Current Salary is ~$90K/yr. I have $13K in student loans and my wife has a similar amount of student loans. Would it be recommended to first pay off the education loan before buying a new house, or better to use that money towards a downpayment on the new house?
Pay off the student loans. Go into that new house with your family as debt free as possible. You just never know what might happen. The best way to weather what could happen is to have as little debt as possible.
Michelle, if the person who wrote in is expecting a significant tax refund wouldn't you advise that they adjust their withholding so they are bringing in more money each paycheck? It is their money after all. Why let Uncle Sam use it interest free?
I would. But perhaps they had something happen that resulted in a larger tax refund. But if not, absoltuely adjust your withholdings so you get that money during the year. The IRS has a withholding calculator to help you figure this out. Go to www.irs.gov.
Hi Michelle, I just love your column and look for it every week! I have two young adult children who continue to struggle after college with jobs and their finances. They are both back home with me. I do not charge them for rent but I do ask that they save so they can move out and into their own place. Do you think that I should be receiving some kind of financial fee for their lodging?
Love this question. And love what you are doing. I wouldn't charge them rent if they are showing and proving that they are saving to move later. Keep asking for proof, their budget, etc. Watch what they are doing and spending on. The moment you see that they aren't saving as they should, kick in some rent and rules! They will save and move soon enough.
I would like to point out the longer you work past age 62 the higher your Social Security benefit will be.
Thanks for pointing that out.
A great book for younger girls (maybe boys would benefit too?) is America Girls' "A Smart Girl's Guide to Money". My daughters (10 and 13) have really benefitted from it.
I have to agree that 1/2 hour sounds like a bad idea. (Just weighing in, even though I know there's no reason to post this.)
I'm posting. I'm hearing. See you got me to stay on longer.
I admit it. I made mistakes and had bad luck. Yes my life is a failure. So I have no retirement. I know you suggest that I move in with a stranger and give up all pleasures in life in order to save money. But why not suicide as a viable option? I don't want a miserable old age. I have some money in a 401(k) but it is not enough to live on for more than a year. Why not have one happy year instead of 20 miserable ones? I think we need to have places where people who cannot afford to live can commit suicide.
I probably shouldn't publish this because I'm not sure if you're serious or joking. But I'm going to assume you are being sarcastic. Look you I try not to berate people for past mistakes. This money stuff is very hard. But if you didnt' do the right thing, once you know that you have to make tough decisions. That's what separates adults from children. If you need to get a roommate than for goodness sake get a roommate. Or live with a relative or cut cable or do whatever it takes to right side yourself financially. You can't complain that you didnt' do all the right things and then give me or anyone an impossible solution. I want' do this or that, so why don't I just die.
That's a child talking. Grow up.