Color of Money Live

Feb 13, 2014

This Valentine's Day, do you have a lot of love for your honey but not a lot of money?

If so, join Washington Post nationally syndicated personal finance columnist Michelle Singletary, Thurs., February 13 at noon ET for a Color of Money Live online chat to discuss Valentine's Day gifts that won't break the bank.

Michelle will also answer your personal finance questions.

Send your money questions in early.

--Obama's 'myRA' plan is a start, but it won't save retirement

After Valentine's Day engagement, find financial counseling before booking the reception

Today's Color of Money e-newsletter: Valentine's Day: Your money and your honey

So sorry for the delay. Slow computer.

Anyway, let's get started.

Michelle - I am in my 30s, w/ no debt. I make good money and have managed to put together a 6 month emergency fund, enough to buy a new car (not happening until the current car died though), and max out my 401(k). I still want to put 10% or so away a month, but otherwise, can I just start you know, spending the rest of my money? I've done it the last few months and got to do some really special things that I enjoyed.

So can you slurge on some things. Let's go through this exercise I use for folks:

-- Do you really have six months of "living expenses" saved in your emergency fund. That means all the money it takes to run your household for six months -- rent/mortgage, transportation costs, cable, car insurance, etc. 

-- Do you have a life happens fund? Depending on your life, I suggest about $1,000 to $3,000. You have an older car. So if you need a major repair do you have the money saved in your life happens fund becasue I want you to pull from that pot, not your emergency money, which should be reserved for a really, really big emergency such as a job loss.

-- Do you have the money for a new to you car when it's time to put the old one to rest. You will not be pulling this money from your emergency fund and having $1,000 in the life happens fund won't cut it. So if you expect to "need" a car in the next few years, you should be saving separately for that expenses.

-- Are you saving well for retirement. Sound like you are but double check. Go to and go thu the retirement ballpark calculator to see.

If all those bases are covered, then sure you can slurge on something you want.

Any woman who has assets, be they inherited or hard earned, who does not get a prenup signed before marriage, is crazy. Period. The deck is already stacked against women as it is - overt in some ways, *subtle in others - and you don't want to get a divorce and have to start over. Avoiding divorce and avoiding poverty are two entirely different things. *and by subtle, I even mean whose financial decisions in the relationship get a higher weight. In a perfect world the decisions are equal. We aren't in a perfect world.


Today's Color of Money e-newsletter: Valentine's Day: Your money and your honey

So let me get this right. You trust this person with your life and body (cuz you sleeping with him) but you don't trust your assets?

Doesn't that say you value your money more?

With a prenup you've put divorce on the table. You are starting out saying this is a real option. 

You protect yourself by really discerning the person you want to marry. And you do that my going to premarital counseling, spending time getting to know their values, watching how he handles his money, how he treats other people, etc.

Marriage isn't about protecting your stuff. There's only one way to really do that and that's not getting married. Even prenups can be broken. 


Lots of good advice, but it bothers me that for many chatters the botom line seemed to be how much money you can make. There are many things other than salary to consider! I work for a small nonprofit for a very modest salary and live in a group home with like-minded friends. The work is challenging, at times frustrating and I rarely get a good night's sleep. But the rewards of changing at least a few people's lives for the better are overwhelming. Sure I'd like to go to Europe or even own a car; Metro fares are astronomical. But I'll take my life over many others who make a lot more money.


Feb. 6: Color of Money Live online chat

I think you may be a little too harsh. Many people take jobs paying less for the joy of work. And I didn't get that vibe from the people helping out.

But in the end, you are right that money can't buy happiness. However, if you are going to take a job with modest pay compared with the cost of living where you live you need to do what you can to be a really good money manager.

Hi Michelle. Hope you are warm and cozy. I know that you have written much on this topic but wanted to know if you thought that the credit monitoring that Target is offering is enough protection. The credit card that was used during the breach has been replaced and no pin number was used. Should I sign up for the monitoring or do something different or in addition to this service. Thanks much for your words of wisdom.

Thanks for asking. I signed up for the monitoring because well it was free. So no harm in the little bit of extra protection. I would sign up anyway. 

But the steps you have taken are the ones that really give you the protection or as much as any of us can have these days. 

Because really our data can't be fully protected. So do the best you can to check your credit reports regularly, check your credit card statements, banking accounts, etc.

when is the "right" time to trade or sell a car and buy another. I have a 10-year old Honda Accord with 120,000 miles. Are there indicators that it is about to go? It is probably like timing the market, but there must be some things that one should look to.

Really, if the car is getting you to where you want without trouble drive it until you are a first name basis with the local tow truck drivers. I've had car owners who have kept their cars for 15 years or more or well over 200,000 miles.

My rule is if the car is breaking down without warning. So if you know something is wrong and you can plan for the repair keep the car. If you are being constantly stranded then it's time to move on. 


Hello Michelle, Becky Frost here. I work in credit education for Experian Consumer Services and wondered what are the recurring questions you receive from couples about managing their money? We usually hear from people wanting to know how a potential partner's credit could affect their own, or from couples who have decided to better understand what goes into their credit and how to manage it. Just curious about the other questions you see and the advice you share. Thanks in advance! Best, Becky

Thanks Becky.

You got it the No. 1 question I get from couples is whether ther credit records are merged if they get married. 

Of course I tell them it isn't but if they get debt together, that information appears on both the reports.

I also get people asking how to improve their credit. I tell them to pay their bills on time. The top way to get better credit. 

What additional advice would you have for people?

My husband and I are realizing that at some point in the next few years, we'll need a new car. (Ours is 8 years old right now. We live near the metro and only have one, so it's used quite a bit). My husband says that we should buy the new car in cash, since ours has been paid off for years and he'd rather not have car payments in our monthly expenses. I say that we should take the cash that we would buy the car with and pay down our mortgage (30 yr. fixed rate). Here's my logic: I have seen 0% interest car loans. Assuming we get one of those, then we'd be paying no interest on the money. That said, we ARE paying interest on our mortgage, so why not pay it down a bit and lower the amount of money on which the interest is based? We do not need to pay off our mortgage until we sell, since we plan on moving in a number of years (at least 5 or so), but we are confident that our home has appreciated in value (based on nearby comps). As such, I realize that yes, we would not see the benefit for a while, but in the end the money is worth more if it's going towards paying less interest monthly. Is this correct? We're looking at about ~$25,000 cash. (Note that we would not refi our mortgage, since we already have and are at the lowest rate possible already). I feel that this is a good way to spend our extra money. (We have no debt, other than the mortgage, save money at the end of each month, max out my husband's retirement - I am mostly at home with the kids for the next few years - max out the kids' 529s, have a 6 month emergency fund - despite my husband's fed gov job security, and a $10,000+ life happens fund.) I said that I'd go with your ruling on this. Unless there is a better investment that we're missing? (We have a bit in stocks, but are not huge risk takers). My only other thought is Roth IRAs, but there is an annual limit on those, I believe, anyway...

I vote with your hubby. Buy the car with cash.

Even a zero percent loan is debt. So what if God forbid he loses his job? Won't matter if the interest rate is zero because you would still have the debt.

And since you are going to maybe more in 5 years, no point in putting that money on the house if you are just going to get back the same amount of money if you sell.

And when you say maxed out the savings for the kids, meaning you are saving enough to put them through school debt free? Just curious. 

One other thing, you mention saving for retirement for your husband. I hope you are also saving for your retirement too. You need to put money away for you as well. 

The lack of taking a reservation really irks me! Why can't you make a reservation anymore? Why are people expected to wait HOURS for a table? Then, the restaurants get mad if you decide not to do that and LEAVE?! When did this become the norm? Plus, they have the nerve, after requesting people wait for HOURS to be seated, to add in their own tip! Let me decide how good your service and the meal were for myself. (NOTE: I always tip our servers. I have good friends who make their living this way and without a tip, they are really up a creek!)

Well, you could always have a great meal at home :)

There are restaurants that take reservations but they tend to be the pricey ones. And really I understand. People make reservations and then don't show up or show up late. Then the places have to turn away folks. 

I've talked a lot about the tip thing and it's a losing battle. However, generally it's not imposed unless you are a party of 8 or more. 

I've been with my boyfriend for over two years. We live together and split all of our shared costs evenly (rent, groceries, utilities). He's a grad student with no debt, a decent stipend and we live in an area with a fairly low cost of living. I have significant debt, around $14,000 in credit cards and $68,000 in student loans. He knows about the student loans but I haven't been explicit about the credit card debt, and I'm paying off it off. I have a plan that should get me to $0 in about 3 years. Is it really necessary for me to tell him that? I suppose the debt itself could be a red flag but I've been proactive and have already made decent progress plus its not affecting our lifestyle/situation because I make more money than him so I can pay things off and still maintain a similar standard of living.

Ok, I have two reactions to your note.

1. You aren't his wife, so nope you only need to share what you need to share. It's not any of his business because you are a roommate with benefits. And you didn't indicate you were working toward getting married.

2. You are sharing everything else with him, including I'm assuming your body, so why wouldn't you open up about the debt? You have a plan and you are working to pay it down and that's a good think I would think you would want him to know especially if you think you might get married or you've been talking about getting married. Potential spouses should ask questions about how their partner handles their money. If you didn't have a plan and were satisified with that level of credit debt I would want to know. All the things you have done with your finances and will do factor in what you will and won't do in a marriage, qualities you should share.

Hi Michelle, I love your column and truly value your advice. A few months ago I posed this same question to you concerning paying off my primary home mortgage with the proceeds from the sale of another property the we planned to sell. You agreed with my then plan to do so however since that time I have had second thoughts on the matter due to the unpredictable housing market. I'm just not sure that I want to sink $250K into my home here in PG county for the payoff then 2 or 3 years from now my home loses value again and we possibly loose some of this hard cash that we now have in hand. I thought maybe a better solution may be to invest the money in T-bills and other ultra safe areas and just continue to pay our mortgage until my hubby retires in about 7 years when we plan to sell and leave the area for warmer temps. What do you think?

If you plan on selling in several years I think I agree with you about holding on to the money. But keep in mind that you are paying interest all those years. And if your home loses value and you can't sell for what you owe, you'll still need to bring money to the table.


When we file our taxes, will we be covered if we complete a Schedule C along with our 1040 and detail the income one spouse was paid as an "independent contractor" if the employer refuses to provide a Form 1099? I feel that this employer is more on the "lazy" side, but may be up to something more. I just don't want any trouble on our end. Every penny is documented (there are check stubs for all money received). Thanks!

You should contact the IRS and find out what you should do.

The IRS says if an employer paid someone who is not their employee $600 or more they have to give you a 1099 by Jan. 31. 

I would call the IRS to see what you can do to get the form. But in the end you are right that you still have to report the income.


Don't go over your budget. My husband and I usually go to dinner without the children (imagine, eating a hot meal & not cutting up anybody else's food first!) and then add in another activity. We live in a cold climate and often end up at the movies. As much as I enjoy this time with my husband, I would prefer a place more conducive to conversation. The prices of flowers triples for 2/14 every year. On 2/17, they drop drastically! I told my husband to skip the roses and choose something else if he wants to give me flowers. We give each other cards, handwritten letters, and several hours together. We get out for "date night" each month (sometimes twice a month) throughout the year. Still, it would be great to celebrate Valentine's Day without price gouging. Due to our work schedules, we won't see each other until dinnertime on 2/14 anyway. I will go to a school Valentine's Day party with our Pre-K twins. Last night, I helped all of our children complete Valentines for their class parties (we have 3). Some places have "special" dinner for two all weekend for under $30. Other places are charging $150 for a "romantic evening out" - do we get the whole lobster for that price? I saw a commercial for a hotel suite, dinner, wine, chocolates - all inclusive for a few hundred dollars! I prefer to sleep in my own bed. Seriously, pizza & chocolate at home with my husband after the children go to bed tastes great too! Just for a little time together. Happy Valentine's Day!


I could use uninterupted bath time and a foot rub!

Michelle, I thought your suggestion of financial counseling for the newly engaged was spot-on and timely. I'll do you one better-- when my husband and I were engaged, I would read questions from your chat to him, and we'd talk about what we would do, then talk about your answer. It was a great open-ended way to discuss "what-ifs" from a safe distance. That's how we knew we were on the same page regarding a lot of money matters, and it gave us a chance to talk through our differences to see if they'd be problems in the long-run. THANK YOU!

Oh what a GREAT idea to have a good money talk. Love it!

Really creative way. How would you answer the question honey.

I need you to come teach with me :)

My husband and I both got new jobs last year that involved large pay increases. I've been saving aggressively in my 401(k) and we cleared all credit card debt, but we still have a car note for his car and I'm paying my own way (no loans) through grad school. Problem is, my job involves a lengthy commute and I have serious car envy - my current car is 8 years old and while nothing's wrong with it yet, it has no frills or touches to make 2+ hours in the car every day more comfortable. I've been having serious car lust but I know it's a bad idea to take on more debt when we should pay off my husband's car first and put back some money for a down payment... talk me out of trying to make two car payments work please! I know better than this but I can't seem to get the sense of entitlement, "I deserve a new car" out of my head.

Here's me talking sense into you.

Think of the car debt as a backpack with lots of rocks in it. Now put that backpack on it. How does it feel?

Heavy, right?

Don't do it. Keep the old car. Get a air freshner with a new car smell. Get some books on tapes to take your mind off your hoopty. 

And really all those folks with those cars you envy are probably deep in debt for them or GASP leasing!


Hang tough. You deserve to be debt free.

I'm recently divorced and embarrassed to admit the extent to which my ex husband controlled our financial life. This is the first time I've had to file my own taxes in almost ten years. I've thought about going to a professional accountant but don't want to spend the money. I don't have kids, I live in an apartment, I don't own a small business, I don't have any capital gains to worry about, my husband is claiming all the deductions. (He's not an ogre. It was simpler and he was very financially generous with the settlement, which I rolled directly into my 401K.) Can you think of any major pitfalls I could miss that would cause me problems? Any glaring reasons I shouldn't try to file on my own, like a grown up? (Again this is very embarrassing for me. I'm intelligent, have a good career, advanced degrees, and I can't believe the extent to which personal finances are so foreign to me.)

Please don't be embarrassed. You are not alone. Trust me.

Married, divorce or never married lots of women and men have no clue about their finances.

It's really not that much to hire someone to do a simple tax return. Maybe this first year you get your taxes done professionally and then next year you can do it yourself using software, which walks you through everything.


I understand the importance of being honest about money with your partner, but how much information and how soon? I've been seeing a lovely man for 7 months. We've had some general discussions about money; our attitudes about debt, spending, priorities, etcetera. (Our values are almost identical. The main difference is he has very responsible habits and I am trying to build good habits. I'm not a big spender, I have a few hundred dollars in credit card debt that I'm paying off, no student loans, but my money management tends to be more chaotic and I'm not saving as much as I would like to.) We are very serious about each other but we are also both divorced and not ready to think about remarriage for quite awhile. Since marriage and/or cohabitation are not a relevant issues for the foreseeable future, how much disclosure is necessary? Do I need to tell him my exact credit score, or is it enough to admit I'm working on improving it? Do I need to tell him how much I make or the balance in my savings account? (I will say all of these things make me uncomfortable. I make a decent living, but am embarrassed to talk about it. I don't have very much consumer debt but am embarrassed at how low my credit score is.) Thanks for your help Michelle, and for all the work you do. You are a major guiding force in my financial life.

You are so new in the relationship, I wouldn't share very intimate details about your finances.

Talk in general. Your general feelings about debt. How you have a little debt and that concerns you. Or that you want to save more and need to figure out how.

Don't share your salary, savings amount, credit scores, etc. It's none of his business at this point. 

Talk about financial values. And hey, I love the last poster who said she used my chat questions to generate conversations about money. Try that too to get at what you both think about money.

Just take your time and if this leads to something much more serious or marriage talk then you can get more financially intimate.

Thanks, Michelle. There is so much to talk about when it comes to couples and money, but you definitely hit on the big conversation starters. If I could share one thing it would be to encourage open and frequent communication about money. For many of us, it's not something we're naturally taught to discuss in our families. I recently read a good article that included three recommendations and included them below. 1. Talk About Your Financial Goals Regardless of how much you have in common with your significant other, there's still a chance that your money management styles are not a match. So, before you combine a single penny or line of credit, sit down and discuss your financial goals. If you have competing wants and needs, consider compromising by using joint accounts to reach mutual objectives. 2. Discuss Your Bank Account Options Just because you're combining your finances doesn't mean you necessarily have to merge all of your accounts at once. Opening one joint checking account and keeping separate saving accounts may appeal to you while learning each others money management style. Or, you may opt to merge all of your cash accounts but open an account specifically for planning a vacation or saving for a down payment on a new home. Regardless of how you merge your money, you may find the transition easier when you both still maintain some financial freedom of your own. 3. Explore Different Credit Possibilities Although opening a joint credit card may seem like the obvious step when combining finances, when you and your significant other have a large gap between your credit scores, it may not be the best option. Little do most people know that marriage impacts your credit score only if the two decide to open joint lines of credit. If you and your partner want to share a line of credit, consider adding one of you to the others existing credit card as an authorized user. Or, when varying credit scores are not an issue, you may opt to open a single joint card for home use and maintain separate lines of credit for personal spending. This option also allows you to merge money without having to clip your financial wings completely. This is a great conversation. Thanks again for your responses. Everyone's different perspectives are eye-opening. It's no surprise that financial face-offs can be burdensome to a budding marriage. So, the key to merging money while maintaining life-long bliss is to understand these tips for couples combining finances, exercise compromise, and setting aside time to talk about financial issues regularly  you may find that you have more in common than you think!

Thanks for your input.

Here's my thing, you can't get a little bit married. So before you get married go through premarital counseling and discuss how you plan to handle the money together and your financial expectations. I favor joint accounts and jointly talking regularly.

If you are planning to get married, you wouldn't be joining assets, money, bank accounts, getting joint credit cards until you get married.

The most important thing is if you are gettng married to lay everything out financially. 

Hi Michelle, We do not expect to get financial aid for our daughter's college education (too much income & savings), but were advised to fill out the forms just in case, because if your financial situation changes drastically (due, for example, to a parent's death), the college will be more able to help you out if they already have the information on file. Just curious, did you fill out these forms for Olivia? They are a nightmare! I am a wage-earner, but my husband is a small business owner. We spent a ton of time on these forms and even so are not certain we did it right.

Yup, we filled out the forms. And nope didn't get any need based aid. But Olivia did get a very generous merit scholarship. Either way she had to fill out the form. 

It wasn't too bad. So yes, do it. Also, you may get aid as more kids go to college. We have two more in the pipeline.

Hi Michelle - hope you are staying warm and safe during the blizzard. I have a question regarding federal student loans. I have one - $64,000. Interest rate is 5.75%. I have been making payments on time, every month for $100 MORE than the amount due for the past 3 years. Why is my principal still $64,000?!?! I spoke to my' loan servicer' who informed me that interest accrues everyday at (about) $10 per day and that everything I pay (including the overage) goes straight to pay the interest - therefoer I have not decreased my principal. What am I missing here????

From what you write, it appears they are not following your instructions of putting the $100 on the principal. Call them back and demand that they put your extra money on the principal. If you don't get anywhere with the company, contact the Consumer Financial Protection Bureau, which found that many people in situation discovered the loan servicer wasn't putting the extra money toward principal.

Take your trusty automobile to a fancy car wash and have it professionally detailed, inside and out. You will really feel like you're in a new car! Somehow they get every single coffee drip, sesame seed, and dog hair.

Good answer!

So sorry time is up. But trust I read every question and comment. If you like you can still submit questions to me on Twitter @SingletaryM.

Thanks for joining me today. See you next week.

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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