Color of Money Live

May 09, 2013

Do you need budget-friendly Mother's Day gift ideas? Or advice on how to achieve financial freedom?

If so, join Washington Post nationally syndicated personal finance columnist Michelle Singletary for an online discussion on Thursday, May 9 at noon ET.

Send your personal finance questions in early or read the archives later.

-- Michelle Singletary: A mom's view of family finances

-- Michelle's Mailbag: A chat with Color of Money Book Club author Stan Hinden on retirement

-- Grass isn't always greener across financial lines

Thanks for joining me today. No guest. Just you and me.

Let's get started.

I knew a lady who asked to have her bedroom for the day with no questions from anyone all day. She ate carryout food, watched her movies, read books and magazines, took a wonderful long hot shower, and stayed in her room and in bed all day long. She got the gift of time to spend as she wants it.

Funny you should say that. I have a friend who asked for that exact thing. She wants to eat with the hubsand and kids but she just wants time alone to rest, read, whatever.

I said something similar this year. I told my husband to tell the kids not to get me anything. I don't want to be taken out to eat for some overpriced Mother's Day buffet brunch either. Typically too crowded and I overeat trying to get my money's worth.

So said let's grill and let me sit on my deck (hopefully there's sun) and just enjoy peace, which is priceless.

Two questions: 1. Mother's Day cards are getting more expensive, do you buy cards? 2. I give money as a graduation gift, how do you recognize/congratulate the graduate? Could graduation gifts (or helping out the graduate) be a topic for a column? 

I still buy cards but generally from a dollar store or the section of the card display where cards are 99 cents.

Sometimes I spring for a more expensive card but I try to keep the price under $3. 

As for graduation gifts, I have written about that. Young adutls starting out most likely need cash. So I tend to give cash and a personal finance book to help them manage the cash.


One word of advice for new college grads - CASH

How old are the vehicles you and your husband drive?

We have 2006 cars right now.But we've held onto cars for 10 years or more. We still have a 1996 that is being used by a niece we gave the car to. The other vehicle was a 1999 van, we also gave away to a needy relative.


I'm a recently graduated law student with the twin blessings of currently being employed and being free of student loan debt. Unfortunately, my current employment is temporary and ends in August. I'm actively job searching, but my plan B is to hang out a shingle and become a general practitioner. I've been actively networking with local lawyers, retired judges, pro bono resources etc. I have access to business plans, have researched malpractice insurance, business entity formation, unemployment benefits and continuing my health insurance. I have no credit card debt, no car debt and I'm part owner of a business which brings in 1/4 of what I make now. I have about 6 months living expenses in savings, which would be closer to 4 months if I need to buy a computer, printer, fax, letterhead etc. to start the business. Another lawyer recommended I get an operating loan for the business in the range of $10-$15K. Is this a good idea? If so, should I be sure to apply for this before "losing" my current job. Thanks!

Sounds like you've done a lot of planning so good for you. You don't know how many people don't do a business plan, research, etc. before opening a business.

As for taking on debt? Well you asked me right?

I say don't do it. I know it's common for businesses and especially small businesses to take out loans. But I hate debt and wouldn't want to start my business off with the pressure of that amount of debt. 

I would recommend you find another job the best you can and save up for the time you hang out your own shingle. Less pressure.

Also build up that emergency fund to at least a year's worth of personal living expenses while you get the business up and running. 

Hi, Michelle, sure hope you can give us some coping ideas. My husband and I always wanted kids but are now unexpectedly expecting twins! We both work full-time but neither has health insurance. We rent a small house but won't be able to do so on one income. My mom lives in Oregon and my in-laws have a one BR condo in a retirement community that does not allow kids. No one has the financial resources to help out and no one can take in 4 additional people, including 2 babies, for any length of time. We are not churchgoers, don't want to be, so no "faith community" to give us a hand, I am totally freaking out over the prospect of becoming bankrupt (no savings) and homeless. Abortion is not an option. Can you help?

You do indeed have a lot to deal with. 

Clearly, the most pressing thing is getting health insurance if you can. Have you tried to see  if you will now qualify for state aid?

Go to to find your state’s health care options. 

As for your budget, putting two infants in childcare can be very expensive, maybe as much as you bring home if your income is low. Check with your state's department of human services to see what you might qualify for in terms of servicesor supplemental aid for childcare.

The thing is you can't afford to freak out. You have two kids coming and you have to have a plan on how best to take care of them. So start researching more about your options. There are community groups that aren't regliously based that can point you in the direction of help. 

I wish you the best.

I am sure you saw the articles about the uptick in suicides among boomers. I wonder why anyone is surprised. After Greece fell apart financially, suicides increased dramatically anyone people who lost everything. Did anyone think America was immune to this reaction of despair and exhaustion? When someone gets wiped out through longterm unemployment and is already in the declining earnings part of a career, who can be surprised if someone looks down the road and it is dark. Not even the light of an oncoming train. Just blackness. I expect we are only seeing the beginning of this particular manifestation of our long economic nightmare.

I hope we aren't in the beginning of such a nightmare.

And I hope if anyone is feeling such despair that they seek help because help is out there.

If you need help in the U.S. call the National Suicide Prevention Lifeline at 1-800-273-8255.

Are secured credit cards the best way to build your credit- I need just a few more points to work towards applying for a loan on a house/condo. What other ways are there???

The best way to boost your credit is to pay your bills on time. If you are just a few points away not sure a secure credit card in the short time will work. That's because it's secured meaning you aren't really using credit the traditional way that boosts your score directly.

I typically advise people to get a secure card, use it and pay the bill off on time. Then wait a few months maybe six to see if they can apply for a traditional credit card. Then use that card, pay the bill off and let the information help boost your score.

So with a secure card you may be talking about six months to a year.

So again, just wait the time out. Pay your bills on time. There will still be houses. Take your time. And while you wait build up your emergency fund.

My family is very fortunate, I make a good living and my in-laws are very generous (gift us money every year, max out our kids 529s, etc). My husband and I were both raised in middle class families, where we never wanted for anything but weren't rich either. My parents and his parents have very similar views on money and spending habits, and I really think that they tried to impart the same values to both of us. We both had jobs in high school, fairly small allowances, weren't given a car when we turned 16. The one difference is when my husband turned 18 he found out that he had a trust fund set up by his grandparents. It provides him with a small income every month and provides a safety net. He's an entrepreneur at heart, so its allowed him to pursue his dreams without worrying about a steady paycheck. However, its also been somewhat of a curse  after attending business school he was unwilling to even look at jobs that paid less than six figures (and in the current economy those are hard to come by). A couple of months ago my in-laws let us know that they are setting up trusts that the kids will get when they turn 30, which will probably be worth well over a million dollar each. I'm happy that my kids will have a head start financially, but I'm worried that they're going to grow up with the same attitude as their dad, and believe that they deserve a job that pays a certain amount, and be unwilling to settle for an entry level job that will allow them to build their skills and progress naturally. I think my in-laws sometimes look at my husband and their other son (who also has the same attitude) and wonder what they did wrong. I don't want that to be me in 30 years, and I'm not sure what I can do. I would be thrilled if the money allowed them to pursue something that they really loved that didn't pay well, but I would like them to have a career rather hobbies. Any suggestions on how to raise grounded kids?

Wow. Definitely a different story than I typically get.

Look there are no guarantees even when you do all the right things. Your husband's parents may have done all the right things.

So just keep doing the right thing. Teach them good sound values. And honestly, sounds like you and your husband are doing well even if he's waiting for the "big" job. It's not like he's waiting with no money coming in.

As for taking the trust money. Just keep talking to your children. Model the behavior you think is right. That's all you can do really. 

Good Morning, Michelle. I wanted to know who/what/where are the best resources a person can begin to explore if they wanted to start their own financial literacy program for their local community/community organization. Chris

Start by talking to the groups that do such training. And that will help you determine if you need to start something different or join an effort already in progress.

Talk to the folks at Jump$tart Coalition or

Start by volunteering in programs already in your community. I have such a program at my church and I'm always looking f0r volunteers. 

Is it better to aggressively pay down student loans or save for retirement, at age 29 with $112K in student loans? Interest rate of 6.8%. Right now I am maximally funding Roth IRA every year and then paying $3400 /month to student loans, but maybe I should be saving more for retirement? I already have an ample emergency fund with $50K.

Knock out the debt!

Get that heavy monkey off your back.

Last week you told a letter writer that she was not wealthy enough to visit her sister once a year. I am curious. If her sister dies would she be allowed to go to a funeral or would you say she needs to Skype it?

Really. Seriously.

How about you're taking the answer out of context and trying to be a smarty pants.

The point was about vacationing and whether the person could afford it. If I recall the person didn't have any savings.

I was encouraging the person to do what he or she could afford.

I didn't say NEVER visit the sister. I said save and when you have savings, go.

You can keep in contact with the folks you love long distance until you have the money to visit.

So if he or she loses his or her job and doesn't have money would you help pay their bills?

Probably not smarty pants!


See if your local bar association has a lawyer referral service. It's a good way to find business if you are getting started.


Well if one has been out of work and depleted one's savings your advice is that such people CANNOT go on vacation go to movies eat out have cable do anything pleasurable. Suicide seem like a good option.

Come on. Really. Seriously.

You can have a full and happy life without eating out or having cable. The lack of such things don't lead to suicide. It's a deeper thing going on.

And my advice is about helping people live within their means. And living within or below your means doesn't negate having pleasure.

There are so many free programs in many communities. You can meet with friends, go to the park, museums, community event.

Suicide is never ever a good option whether you are joking or not.

I would love to be able to hand people money to fix their problems. But I can't. So I do the best thing, which is to guide them to some solutions. 


Reminds me of back in the 80's when it was still called "Secretaries' Day". The woman who worked for our VP said that her bet present was not the lunch in a fancy restaurant but the year that our VP took vacation that week in April :)


I've been working for 35 years in the government. I can retire in 2 years with 37 years of service at 55. My husband is unemployed and has been for almost 5 years. Should I elect for the spousal benefits once I retire? He's 7 years older than me and I'm not sure if I should worry about supporting him. I do have life insurance which will take care of my burial and bills.

Last month for the Color of Money Book Club I reviewed, "How to Retire Happy" by Stan Hinden. In his book, which I recommend you get, is a chapter about pensions and spousal benefits. 

I see the backstory in your question. Frustration that he hasn't worked. Maybe you're mad?

But nonetheless he's your husband and so yes I would be concerned about his well being. And if you don't leave him any money what then? He's leaning on society?

Besides you may need to get his persmission to cut him out of the spousal benefit. 

Sounds like you have deeper issues you should address that go beyond you money question.

There is a pregnancy center in my area that helps anyone who walks in -- no need to be a church goer (although the church I go to helps/supports the center). They have clothes, for babies and moms, and other basic nursery items - free to anyone who needs them.

Exactly. Many communities offer support for those in need.

I have a similar debt load as the poster above, but am contributing less per month. I am saving 13% towards retirement, which I could scale back a little to speed up loan repayment. But, I've been told I should hold steady on my 401 (k) contributions. Do you not agree?

I believe you should hold steady on getting rid of debt as quickly as possible. If you can save and aggressively pay down debt at the same time, great. But if time is on your side, I would pull back from retirement some and get rid of the debt.

There is a huge difference between getting the money at 18 v 30. If it comes up that the age of your kids' trust should be lowered, fight hard to keep it at 30. By then, they should be done with school and on their way in their careers, fairly established in the way they treat money. The same is not true at 18. I did my will originally when I was about 30 and set up trusts for my nieces that said they'd get the principal at 25. Barely 5 years later, I realized that was too young and I raised it to 30.

Something to think about. I like pushing it to 30 too.

Don't forget that you can get prenatal care for free or for cheap, depending on your income, from your local health department or Planned Parenthood. They can also likely advise you about your eligibility for Medicaid or other insurance options to cover the delivery. As for child care, do you have room in your home for a live in person who could provide care in exchange for room and board?

Something else for the mom-to-be.

Michelle, We have less than $5k to go on our car loan. We have about 3 months of living expenses saved, and another $6k set aside in a separate savings account. Should we get rid of the car loan and then build up that rainy day fund again? Or stop saving, and direct it all at the car loan?

Be done with the debt.

Then rebuild your savings if you feel pretty safe about your job situation.

In the debate whether to pay down debt or investing, someone told me a very insightful way to look at it. For example, if I were to tell you that you can invest in a fund that GUARANTEES an annual return of 6.8%, would you invest in it? Of course you would, and it's a no-brainer. That's exactly what you're getting by paying down the debt with a 6.8% interest. Think of paying down debt as investing, the higher the interest, the more you'd "gain" in the long term. Now, with mortgages (and I know Michelle would disagree with me here), if you're locked into a low rate (~3.5%), I'd rather put extra money into an investment account than paying extra to the mortgage. A relatively safe Index Fund (Vanguard S&P 500, for example) returns roughly the same rate as the market index. In the long term, comparable to the length of the mortgage, the returns have been much better than 3.5%.

Yup, agree all the way up to the mortgage part.

Pay off your mortgage as soon as you can as long as you are still saving and investing.


Sorry so many people are attacking you today. I completely agree you can find so much enjoyment in this life that doesn't cost a thing. I am blessed to have employment and a great salary but to tell you the truth the things I LOVE are practicing yoga, hiking in great DC area parks, and reading. All of these things can be done for little to nothing. Pursuing some hobbies and passions can help a depressed person so much more than cable TV can.

Thank you.

But I'm used to it. 

People like to attack these days because they can hide behind anonymity. 

Certainly I understand the anguish people are feeling. I grew up being raised by a grandmother who didn't earn much. I know poverty. I know what it's like not to have what so many others have. 

But I also know the answer isn't to spend what you don't have or to lust after what you can't have to the deteriment of yourself and family.

I do the best to try and help people in what are very difficult situations. 

Michelle, I bought this book when it first came out... but never read it. I recently downloaded the audiobook version and listen to it during my commute. Although I haven't STARTED the fast, listening to it provides great opportunity to reflect on my financial state and deal with my attitude towards debt, entitlement and fear. I look forward to FULLY participating in the financial fast. I just wanted to let you know I really appreciate you making this tool available in a variety of formats.

Thank you so much. 

This is my latest book and is based on a 21-day financial fast. It's helped many people focus on what really matters.

Just thought I'd share: for college-bound high school grads (and I'm about to "gift" two family members) I like to send them gift card for their college bookstore, along with a school trinket like a bumper sticker or mug. That's the only time I use gift cards. I figure college is expensive enough and they may well spend it on junk at the store but perhaps it will lessen the books and supplies burden a bit.

Love the idea. Thanks.

My dad always said - give everyone the 'same' amount of money - and in a few years, everyone will have the same problems they did before 'everything was equal.'

Smart man. 

It's why I don't just hand people money even when I can.

Thanks for the input, my first plan is ABSOLUTELY to find another job, and I've been actively building my savings during my employment (after I dug out of the small hole law school put me in). I've always managed debt well historically and figured that if I didn't apply for the loan while employed, I'd be unlikely to be approved when unemployed (credit score in the high 600's). The idea was more along the lines of a revolving line of credit so that it'd be available, but I wouldn't draw any money until the the business had been running a few months (and hopefully have some receivables forthcoming) and my savings were starting to run low.

I appreciate more of your explanation. But would still save what you plan to borrow as your safety net.


Hi, Michelle! I've noticed lately you've been asked by readers "How do I start saving/paying down debt?" Well, it all boils down to discipline. Saving begins by setting aside small amounts on a regular basis. I started with just $25.00 a month. I increased when I received a pay increase (yes that was long ago!). For getting rid of debt it's the same process. I had to bite the bullet and stop spending, and force myself to put the money into an on line bank account. I have my credit cards paid off, and I'm working towards saving enough to buy my next car. It takes work, but it can be done.

Yes, indeed. It can be done.

So sorry. Got to go. Thank you for all you input and questions.

In case you don't know I have a new feature on Monday -- Michelle's Mailbag -- in which I answer some leftover questions from this chat. So catch me on Monday where I might answer your questions. Or come back next week. 

Thanks again for joining me today.

Follow me on Twitter @singletarym or on Facebook at


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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