Color of Money Live

Feb 28, 2013

On Thursday, Feb. 28 at noon ET, join Washington Post nationally syndicated personal finance columnist Michelle Singletary for an online discussion. Her guest will be Deborah Price, author of this month's Color of Money book selection, "The Heart of Love." Michelle will be available to answer your personal finance questions. If you can't make the live discussion, submit your questions early.

The sequester's wide reach
Families could use real help with the high cost of college
Sequestration primer - Today's e-newsletter
Michelle's column on Price's book

So sorry for the delay. Let's get right to it.

Hi, Michelle. A famous baseball player who recently signed a $127 million contract says "It's all about the money -- I wuld have signed with the worst team in bseball if they had given me the most money." We are reasonably well off and, like all parents, want our children to do well. But we also don't want them to think that money is the be all and end all of existence. We save as much as possible and also support several charities. While none of our children is ever likely to have this kind of payday (n our dreams!) how can we combat this "money is everything" approach? They are still chaffing because we won't buy them every new electronic gadgeet that comes on the market.

You are so right to be concerned about giving your children everything. Money is a precious tool and resource and one children need to learn to both value and learn to create and earn. If we give our kids everything we can dis-able them, create entitlement issues and cause them to develop money patterns that may not serve them later on in life. Create a spending plan with your kids, give them an age appropriate allowance and let them learn to earn or create more through their own efforts. They will thank you for it someday.

If I had to cut 10% of my spending through the year, I could either cut 10% from all categories (food, entertainment, gas, phone, mortgage, clothing, etc.) or I could make strategic cuts (no summer vacation, get rid of all but the basic cable package, fewer meals out, etc.) Why can't Congress and the Federal agencies do the same? They can cut from everything equally, or make a few strategic cuts to areas that will have the least impact to the fewest people.

 

The sequester's wide reach

 

It's complicated but in many ways you are right. The biggest problem everybody says theire project or department or program is so strapped they can't cut. I see it wheh I sit down with individuals all the time. They swear they can't cut and then I find cuts.

Hi Michelle, What sources can you recommend to help to begin talking about money with a significant other. My boyfriend just recently moved in and money has always been a sore spot for him (he owes quite a bit on credit card debt, last year he said the range was $30,000). I don't have any debt, finally paid off my student loans, own my car outright and I max out my 401(k) contributions every year. I am open, honest and frank with him when it comes to my finances. I also pay for more than my share to help him out but he shuts down whenever I try to bring up finances, even something as innocuous as asking how he's doing with the balance causes him to meltdown. If we're going to share a life together, I need to know how to broach the topic with him. Thank you

 

Why couples clash over money

It sounds like your boyfriend is possibly being triggered due to feelings of frustration and shame about his circumstances. It is not uncommon for people to react irrationally where money is concerned. Some of this reactivity may also be related to unconscious patterns that pre-date your relationship. Try asking him what he needs from you and how you can support him...not rescue him or feel you have to fix it for him. Also, see if he'd do the exercises in The Heart of Money with you. That would be a great start!

I love Deborah's answer and she's right. But my dear please, please pay attention to these signs. Of course I wouldn't have recommended you live together but that's another story. I'm not sure what the end game is for your relationship but I'm concerned that you are covering things he should be covering. And then he won't talk about it. If he continues to shut down, maybe you need to consider where you want this relationship to go. You are not his mommy or his wife and it's not your responsibility to take care of him especially if he won't be an adult and figure out how to help himself.

Hi! I work full-time. My husband is currently laid off. We have three children, ages 7 and under. We have very little saved. Very little. We have some credit card debts. We have college loan debt. We are due to receive an income tax refund (have not filed yet. Will do this next week or two.) Should we save it for living expenses? Pay off the two credit cards that are under $1,000 balance or something else? Thank you!

Hoard the cash. You need funds for your living expenses. I know the debt weighs heavy on you but just make the minimum payments for now until you are in a better position financially. Who knows how long your husband will be laid off.

I am preparing for the flood. My spouse sees clear skies. After negiotiating our spending and saving styles and years of praying, savings and living frugally, we are in a good place. I think the big moment was when he saw my 401(k) and I said this is the amount of money you will have if I predecease you. I want you to be ok when I am gone and not desparate for money in your old age. He had to think what am I doing for her because his saving behavior changed.

You are clearly a wise woman! It sounds like he is beginning to truly recognize this. Perhaps you can ask him how it feels to know he'll be taken care of and possibly think of how he can do the same for you?  It's a two-way street.

Is there a way to listen to this or is it just online via text chat?

Just text chat for now. But stay tuned working with social media staff here at the Post to try and do more video, which of course means audio. It's something I would like to do because I can talk faster than I type.

Hi, Michelle, I read you always! I've planned and saved all my life. If policy makers and institutions can undo everything I've done, creating volatility and financial peril, have I been pursuing a fool's dream all this time?

It's interesting. I get this question al lthe time. Why save. I could die. Other people do bad and get help so why should I do good.

The thing is, planning and doing all the right things do pay off. The truth is the politicians and the markets can't undo "everything" you've done. If you lose your job because of say the sequestration, you are far better off having savings than someone who didn't save when they could. If you don't have any debt because you've planned, you can weather that storm that much longer. Doing well and good is in fact a great reward.

Trust me the other side of not doing it is not great in good times or bad.

I read your book, and it is wonderful. Do you teach others how to take this work out into their local communities?

Thank you! The Money Coaching Institute offers training in this area as well as live and online workshops which you can find out about on our website at www.moneycoachinginstitute.com. Or give us a call!.

If you were given the task of working with a leader of a nonprofit who thinks with a scarcity mindset around money, how would you help them shift that thinking?

Unfortunately non-profit organization leaders are often conflicted themselves about money. Non-profit does not have to mean "unprofitable" but many people have deep-seated money issues that influence their ability to allow them to recieve greater prosperity. Discussing this with them can be helpful.

Hi Michelle, I have been doing a lot of reading this year on personal finance. Do you have any tips on budgeting and getting out of debt as quickly as possible? I have read David Bach and Dave Ramsey, implementing tips from the both of them. They are very similar and I am curious if you have anything to add. I even met with a credit counselor who suggested a debt management plan for three credit cards I have. We discovered that I do not have any poor spending habits as far as my budget, just trying to get rid of the credit card debt. I made the decision not to enroll in the DMP because of how it could reflect on my credit report when trying to get approved for a home loan hopefully in the next 1-1.5 years. Thanks!

I like some things about both Bach and Ramsey. But I fall more in the Ramsey camp as to how to pay off debt. Start with the debt with the lowest balance is the method I typically advise people to take.

And for some the debt management plans work because they don't have the discipline to do it themselves. If you have that discipline, you can do it yourself, which it sounds like you do.

So come up with a plan that works for you -- Back or Ramsey -- and go to it.

My husband and I just received $150,000 from the sale of our house, and need to decide what to do with it. We have no debt (moved into an apartment, with no plans to buy anything anytime soon), are in our mid-30s making approxiametly $500, 000 a year between us, and have significant stock/retirement funds. Kids are in our future, but none yet. We're pretty frugal and live on less than one of our salaries, but don't feel like we're missing anything. I know that many people would LOVE to be in this situation, and we've worked hard to get here. What would you do with the "extra" money? Thanks!

Without knowing the details of your life (age, income etc) that's hard to answer but I'd say, if you have everything you need already, invest it wisely and/or have a family money meeting to see if there are any unmet needs or dreams unfulfilled that this money might allow you to experience.

Amen. So many people would want to be in your shoes.

Just be sure to be grateful.

When most of us do not work for government agencies, why is this such a major topic? I do not care if the safe/secure government workers get a few unpaid days of work given the amount of unscheduled leave they're able to take (in the DC region). The rest of us aren't secure in our jobs, and have had to deal with enormous budget cuts. I just don't understand their (belly-aching) heartache.

Wow. So no compassion for the many who have house notes, car notes, college tuition, food to buy or elderly parents they may be taking care of.

And the fact is this could impact many more people. If the large gov't workforce in the metro area and across the country (think military bases) stop spending because they don't have money that impacts other businesses.

But let's say it doesn't affect you. It's not true that the federal workers are all sitting on their lazy butts, piling up days. They work and they work for us. If they aren't working, they aren't working for us.

 

wondering what we do when we lose a day every week to the sequester?

 

The sequester's wide reach

Click the link and at the bottom of my column I provide some tips to help weather the coming storm.

Married for 5 years, at the start both of us were gainfully employed, little debt. Then recession hit, now one is unemployed and I am struggling to keep him motivated to obtain gainful employment. Of course this has caused various arguments. I continue to maintain my (wonderful) hubby is a consumer and doesn't recognize why I took his debit and credit cards away. I am now (more then EVER) very OCD about money, checking the accounts daily to ensure we're not in the red. Any suggestions on how to embrace our current situation and not fight over money issues. I don't wanna make the bacon and have to come home and cook it too!

Sadly, many families are expereincing these kinds of financial stressors today. Your husband sounds like he could use some support. He most likely feels badly about his circumstances and instead of facing them (he may not know what to do) he has become triggered and is acting out throught spending. Undoubtedly, this is causing you to react in turn by becoming hypervigilant in managing your money...which is a vicious cycle as it may make your husband feel worse or controlled. Try to get on the same page, don't blame each other, sit down and focus on solutions.

 

 

As the person on the other side of this equation (I have student loans, my fiance has no debt and a boatload of savings), I suggest you be very careful about how you approach this. Try to remove all judgement about the debt-- you weren't in his shoes when he got into debt and you have no idea what you would have done in his shoes. Also, remove judgement about spending-- if you are paying "more than your share" is it because you want a nice place than he would have otherwise been willing to pay for? Is it because you want to go out? Finally, make sure you understand repayment. He may be paying $600 a month and only covering interest. It is frustrating. I know I am very reluctant to open up about my debt if I feel there is any judgement about the amount, how I am getting out of it, or my spending.

It's true...when people feel judged, it makes them feel either angry or ashamed. Speak from your heart, be compassionate and work together to find healthy solutions one steop at a time.

I volunteer at a suicide hotline and they're gearing up for their yearly fundraiser. They want us volunteers to approach local businesses and friends to ask for donations, but man - I am so embarrassed to ask! I believe in the cause but any talk of money, even with friends/family, makes me clam up. It was always a taboo subject at home, and now I have no idea how to talk about money openly. Any tips?

Ask the organization to provide you with some training on fundraising. It doesn't come easy to a lot of people. Believe it or not, I don't like it but I have done it for causes I believe in. Perhaps what stands in your way is that people will say no.

Again, there are skills to asking for donations, so ask for help.

Do you have any good ideas as to how to have healthy family conversations around money?

My book the Heart of Money has an entire chapter on this.The most important thing is to not over reveal financial details that can frighten your children. Help them to feel safe, learn to talk about money, communicate their needs and empower them to learn and earn!

I think my sister's approach with her 2 kids (now young adults) was terrific. Once they hit high school age, they got an allowance of $100/month, and they had to learn to budget from that. Want a new pair of shoes? Better save for it. Movie with your friends? Same thing. She now has 2 incredibly responsible, thrifty young adults who are good at managing their money!

That's the way to do it!

I do like that approach too.

I just started to give my 8 year old son a weekly allowance of $3, is this an appropriate amount for his age.

It is if you can afford it. Just make sure you talk about how to handl the money instead of just doling it out. Talk about taxes, giving, saving and delayed gratification. Make it a teaching moment and not just a handout.

When my husband and I met 23 yrs. ago, we both contributed 50/50 to all our expenses. Over the years I've changed my career and haven't been able to bring my 50% to the table. My husband is very good about it and generous but how can I overcome the "guilt" within.

Where is that guilt coming from? Sometimes are feelings and behaviors are merely symptoms of other isses we need to resolve. Time to look within. You deserve to recieve...why can't you?

I think the only answer is for Congress and the White House to take your class on finances. I don't see any other way.

Lol.

They couldn't handle the truth!

Money is tight, but it's important to me to give to charity. I've heard that it's more important to give than what/how much you give - meaning, donating my time is OK if I can't donate money right now. What do you think?

If all that you can give is your time that's a very valuable thing.

I'm sorry I just read your column yesterday that said to stop aggresive plans of paying of debt - i am paraphrasing here so pardon me if i misrepresent you :). My sister attends the same church and we have been on your plan of saving money since. Should I really hoard my cash and not try to pay off a student loan with 13.1% interest. I pay 70 bucks a month in interest...it saddens me...grrr. Single no kids no other credit cards ....my other student loan debt is at 3% but this one loan at $6,000 is at a high interest rate. Help?

The thing is if you are the path of the sequestration or you might be losing your job because of other factors, you need to save cash to pay for the basis things you need -- housing, food, etc.

Once you are back working again or not getting a major part of your salary cut then you can go back to aggressively paying off your debt.

Thank you for your questions and joining! Have a great rest of the day!

So sorry if we didn't get to your question. But I keep them and if you read my column you know I often answer them there. If not, come back next week.

Thanks for joining me today.

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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