Color of Money Live (August 28)

Aug 28, 2014

Washington Post nationally syndicated personal finance columnist Michelle Singletary answered questions in an online discussion.

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Lots of questions so let's get started.

The McDonnell trial is revealing exactly what you wrote "it's rarely just about the money." It seems in their case it was about portraying a level of wealth that they didn't have but thought they needed in order to portray their power/influence. Do you think this is just an isolated case, or do you think we as a society put too much pressure/expectations on our elected officials to act/dress/appear a certain way? I think of the descriptions of the designer dresses that Michelle Obama and other first ladies have worn (and that they have to pay for). But I don't care "who" they wear. I wouldn't mind it if the first lady wore a nice dress from the same store at the mall that I shop at. I'm curious what you think...

Our first lady actually wears a lot of clothes you can purchase at the mall, J. Crew, Gap, Banana Republic, etc.  But to answer your question, she is actually quite rare.  We do put a lot of pressure on not just those in the public spotlight but even those around us to keep up pretenses.  One of the best things you can do for couples around you is to accept them as they are and to also be a family that doesn't keep up pretenses so others see how cool it can be to actually live within your means.

I agree with Fawn that there is pressure on lots of people to live above their means. It really takes an effort NOT to buy into the marketing and adverting pitches that urge people to get more.

What do you think is the No. thing to do to have a happy marriage?

I can tell you, after traveling the world and interviewing couples happily married 25 years or more, hands down, the answer is mutual respect.  When you have that, the other things that are important fall into place far more easily.

From your interviews what did you learn were the most important things to have a happy and healthy financial relationship with your spouse?

Play to your strengths.  Meaning, if you are stronger in budgeting and financial management, you should be the person that handles the finances.  If your spouse is better at that, he/she should be the one that handles that.  In marriage, you have a built in partnership (personally, I think it's the greatest partnership known to man).  You can not only dream together, but put a plan in place and begin working toward that together.  You'll get there twice as fast if you're working together to achieve your financial goals.

If you are not married, but committed to each other, why can't he understand that and support her? I am trying to find work, but I work as an independent contractor for signing companies and the work is not guaranteed, but when it comes, it come and I am also working on my masters degree, so time together can be a little short. Oh, I forgot and long distance.

It seems as though you have a lot going on.  What are your priorities right now?  What do you think they should be?  And are the two aligned?

Dear Michelle, Your recent column on SS and Medicare motivated me to write to you. A good friend of mine, unemployed, middle-aged, had a series of strokes. While he's almost completely recovered physically, the strokes have left him somewhat mentally impaired -- he's lost some "executive function" that he may not be able to recover. He's in California, living with another friend, I'm on the East Coast. We all would like to get him signed up for Social Security Disability insurance, but, as you know, the paperwork required is enormous. Due to his mental impairment, he has trouble staying "on-task" in sorting through his many boxes of paperwork. How would I find someone who can help shepherd him through the system: what kind of agencies should we be looking for (his friends would even be willing to pitch in to pay someone)? Thanks for any pointers.

You are a good friend. If  you can find the money, hire an attorney who is familiar with applying for Social Security disability. The attorney can also help if your friend is turned down and needs to appeal. My brother who was disabled was turned down and I paid for an attorney to file an appeal and we won. 

Not quite sure what state or local agency might help but call social services office in his area and they may have some suggestions.

Dear Michelle: My husband and I put 21% of his salary toward retirement, and he gets a company match. Our current balance has 6-7 more years to grow, and our current home will be paid off in 3 years. We are in our mid-50s. On our "Bucket List" is to live in a house with a view of the water -- bay, lake, big puddle -- so we are starting to explore this dream. Because water views can be expensive, we are thinking we would sell our paid-off home in a few years (current evaluation: $410k) and cash out some stocks from our brokerage fund (perhaps up to $100k) that are part of our retirement plan. Our feeling is this: retirement funding should be to ensure a happy retirement, and we believe that a home with water views would be one of the best life dreams-come-true we could have. I honestly don't think I would be happier having that brokerage money just sitting in a big pile of retirement funds if a portion could be used on a home we'd probably love -- I think a balanced approach is always best (enough money for retirement + quality of life). We have no other debt besides our dwindling mortgage, and about $800k in our retirement fund. My husband's job is stable (software). WWMD? Thanks!

I think you have a great plan! My goal too is to live by some water (love the puddle comment). And maybe one day my husband and I will. And we plan do to just what you want. We want to pay cash for it. But as you say, it's also important to have enough financial resources to pay for your other expenses.

So go be by the water.

Hi Michelle, Following your advice Just recently I am debt free except for my student loans. I have a high amount of them ( 85k). I work and earn around 75K. Currently I save about 1700 per month in liquid account. I'm curious how I should redistribute my funds that I have in savings. I'm not too concerned with paying off student loan balance because I work for the public sector and participate in the IBR repayment so in 10 yrs my loans will be forgiven. I just want to make the most bang for by $ than I am saving rather than just have it sit and not make money for me. I already own a home (single) and car is paid off.

So not sure if the $1,700 is just for emergency savings or it's also being put toward retirement.

If it's just savings, set a emergency goal. You should have about six months of living expenses saved. If you are a highly paid person shoot for 12 months. Then put aside money in a life happens fund. How much depends on your lifestyle, state of your car etc. You can keep your vacation money or money to upgrade a computer or home repairs, etc. in the life happens fund. As you strive for those goals, make sure you are putting enough in your retirement account. You do all those things and you won't have money just sitting there. 

By the way, your emergency and life happens money  have to just sit there. You don't want to take risk with these funds.

Michelle says money fights in marriage aren't really about the money. Do you agree?

Absolutely!  Discussions about money are something every couple will have on a regular basis.  But how you address the issue (e.g. lack of respect, tone in your voice, condescending nature, etc.) is really what makes the biggest difference.  The happiest of couples discuss money and finances regularly, and have the same challenges in that area as everyone else, but how they address it is why they're not fighting about it and other couples are.  Make sense?

My boyfriend and I are seriously considering marriage but I have 80K in student loan debt and he has none. In marriage, how can we manage the finances so I can realistically pay the debt down? I really don't know how to do it alone, let alone with another person.

This sounds like a great question for Michelle!

First, if you are at the stage where you are considering getting married take a premarital class or one that's even pre to the pre-marital class. For example, my church offers a course that I love. It's called "So You Think You Want to Get Married." The point of that class is to catch folks before they get too far in the process of getting married in case they aren't right for each other or have lots of issues they need to work out before getting engaged and of course married.

I think you are at that point. So take some type of financial course and talk it out. Talk about how you BOTH will work on paying off the debt if you get married. Because I believe that when you get married you merge everything, including debts. Legally the debt is yours but once married, you and your husband should work together to get it paid off. 

In your book there was a couple who lost everything and even filed for bankruptcy. How could they not fight about money?

There were certainly couples who lost everything...except each other and that was the most important.  The couples who team up together to overcome financial challenges (as my husband and I did years ago) rather than turning against one another (which is what unhappy couples do) are the ones that navigate the storms the best.  It's just money.  It's just stuff.  You can work together to get it all back (if you so desire).  It's a temporary situation so they treated it as such.  They put their heads together to climb out of quickly as they could begin again with a healthy financial situation and an even healthier marriage.

I just bought a car from my parents. Registration information is public. I have been inundated with offers by mail. Some for "warranties." Others to buy my car for "thousands more than you paid for it." Seems, the car dealers want to buy my new-to-me 9 year old Honda and sell me another car while "lowering your payments." I paid cash. I'm almost tempted to call up one of these businesses and ask if they can put me in a new car and pay me to take it. That is the only way my monthly payment of zero could be lower to me. Third car I have ever owned. Second one I paid cash for. I kind of doubt I will ever buy a car with a loan.

Can I say I Love you!

Wish more people thought like you. I was just on a radio program in which a caller said people told her it was dumb to pay cash for a car. DUMB?

That is a dumb thing to say to me. Like you, hope to never, ever again use a loan to get a car. Like you haven't for a very, very long time.

I am 69 years old and have $700,000 in my 401(k). I don't want to retire until I've built it up a lot more since all indicators seem to imply that I shouldn't retire until I have at least $1,200,000 saved up. I have a pension of $40,000 a year; a mortgage; and will take social security when I'm 70 so that will add another $25,000 to my income. I really would like to retire as I'm getting tired of my daily commute. Do you agree that I should have a whole lot more in savings?

I wish you could see my face. 

It's shock. Shock that you think you may not have enough saved given the $40,000 a year you will have in a pension, plus another what $25,000 in SS in a year.  And you have $700,000. 

You have so much more than most of the people who retire. Yes, would be lovely to have $1.2 million but you may not need that much depending on what life you want to lead in retirement.

I tell you what. The thing that you should do if you can is pay off your home before you retire. That would be my No. 1 goal and is. 

Do this. Go to and plug in your numbers in the Ballpark retirement calculator. You may find as I suspect that you are much closer to the number you want and need to retire. 

In January I left my corporate job after 10 years in a creative well regarded field. I am freelancing now and excited about it. I gave up health insurance, 401ks and bonuses (i have health insurance through spouse). I am confident that my business will grow and take off with time but, so far, I'm only making 30% of what I used to make. I am REALLY happy with this life change but I am embarrassed to admit that "making less money is actually OK". I seem to justify myself to others "eventually it will grow" etc etc. instead of saying "i enjoy my son for 2 more hours a day, we eat home cooked meals, i don't cry myself to sleep anymore". Nobody seems to care about that, right?

Oh, I know exactly what you mean!  There was a period of time when I was working for a company and miserable so I resigned.  But then we'd go to dinner events with people and they'd ask what I did for a living and it was hard no longer being in that powerful position.  What helped was having a conversation with my spouse about that discomfort (and somewhat embarrassment) and coming up with a plan of attack together so I could enjoy the downtime and my [newly minted at the time] writing career and not feel pressured to go out and get another high powered corporate gig.  But really, I just had to get to a place that what worked best for me...would have to work for everyone else...or they'd have to get over it :).  Be you.  Be free.  And realize that so many others would love to be in your shoes so live it up!

I am the "money person" in our marriage and my husband loves it that way. I don't mind being in charge of the household budget and re-balancing 401ks. The biggest concern I have is if I were to pass away before my husband. He said he'd be completely overwhelmed at having to deal with our money on his own. Should I set it up so that someone else has control of our finances--like a trusted relative or a professional money manager?

Is it possible for him to learn from you over time?  Meaning, are you patience enough to teach him and is he patient enough to learn?  You never want someone else handling your money and you don't know what it is they're doing.  Sure, a money manager is great for convenience, but your husband will still need to be the one providing oversight of what will be his money, should you -God forbid- pass away before him.

Great answer from Fawn. And please take her advice, which is exactly what I would have said and am going to say.

He needs to know what you are doing. He doesn't have to do it now but he needs to know the passwords if you do things online, where all the money is, h0w you pay bills, how and why you rebalance the retirement money.

It might help if the two of you together take a financial class or classes. I run a ministry at my church and we often have the money and non-money spouse come so that they are both getting the information. But as Fawn said, take it slow. But do it now.

Have you received criticism for promoting what some may think is impossible -- a truly happy marriage? There is just so much negativity about marriage.

Oddly  I expected a much greater backlash than I've received.  I think a part of that is I don't attempt to define a "happy marriage."  That is really up to the couple and what makes them happy.  So truly, everyone has the ability to create a happy marriage if they choose.  It's accessible to everyone so I think what it's done more than anything else is cause people to believe in the power of love again, and not just any kind of love, but one that lasts a lifetime.

I was the one with the boyfriend before. Currently I'm doing the Dave Ramsey Baby Steps - saving 1K in an emergency fund, pay down debt doing the debt snowball, saving 3-6 months of living expenses, etc. Do you agree with this plan? Also, with the debt snowball, pay down the smallest or largest debts first? Thanks! :)

Oh my goodness, yes!  It's a fabulous plan.  My husband and I did a modified version years ago and it really put us on the path to financial freedom.  What I love about that program is it encourages you to team up with your spouse (in your case, if your finances are already being shared) to get radical and pull yourselves out of debt together.  Excited you're working that program!  Sooner than you know it, you'll get to where you want to be if you're diligent.

I'm a big fan of Dave Ramsey and I like his program. You are in good hands. And yes, I encourage people who work with me in my ministry and when I speak to focus to start with the smallest debt first. It gives you hope when you are able to quickly pay off a debt. 

My only caution is to not merge your money until you are married. 

Oh, and the high school senior who bought my car paid cash too. Starting him out right. I had to have a loan for my first car right out of college because I needed a way to get to the job that was going to let me pay off my student loans. That was in 1987 when it was much, much harder to get a reliable used car because they just didn't last as long. It was a three year loan. I put 25% down, and paid it off in less than two years (right after the student loans were finished).

You are my kind of people. 


I just received a letter from my mortgage company regarding an anticipated shortfall in my escrow account, which gives me the option of paying the entire amount now or rolling it into the mortgage over the course of the year. Because I hate debt, my immediate instinct was to pay the entire amount at once. However, I'm not sure whether that is the smarter move financially. Do you have any advice?

If you have the money to pay it outright, sure why not?

But if you don't have to pay anything extra (a fee) to have them roll the amt into your mortgage and you don't have it to to pay cash, don't see a problem in that either.


Thanks for your answer. When I meant that I quit my corporate job, i forgot to clarify that I still work... from home, with my own business. It is a rollercoaster of emotions (yay, new client... boo contract dropped). So, not like i'm not working. It's just that, at the end of the year, my income will be fairly meager. THAT is what's weird and uncomfortable.

Oh, I've got you.  But does anyone, other than your husband, really need to know that?  Focus on the upside of the change (added peace, comfort, and an ability to go after your dreams).  Because really, you're embarking on a journey less than 5% (guestimating here) of us will even have the opportunity to do.  So give it all you've got and be grateful you're in shoes very few people will ever have the pleasure of walking in.  Does that answer your question?

I agree. If you are making the numbers work for your household, nobody needs or should know what you are earning anyway. Despite the fact that I tell you guys a lot about me, I would not tell you how much I make or what my husband earns. That's on a NTKB. 

Feel good about what you do, not what you make if what you make is enough to pay the bills, save, etc. 

In a recent chat, somebody was asking about (if I recall correctly) a medical tech degree at a for-profit school. One of your recommendations was a local community college. There is currently an opinion piece on that includes "A two-year Senate investigation found a medical assistant diploma cost $22,275 at <name removed> in Fresno, California, while the same program at Fresno City College costs $1,650." Big difference in costs.

Thanks for sharing.

And it shows once again that people should do their homework. As part of my advice, I told the person to ask HR folks who hire medical assistants what they look for and if certain programs are worth it. They are a great resource and can prevent a lot of wasted money.

Hi, Michelle! We have savings accounts for both of our kids and we'd like to transfer them to some sort of investment, rather than keep earning the 1%. The kids are in 4th and 1st grade, so we have some time for the savings to build. I am pretty risk-adverse. It seems to me that either money market funds or 529s would work, but how can we figure out which would be better in our situation? Thanks!

With tuition and costs of college going up faster than inflation you are actually losing money keeping the college savings in a Money Market paying 1 percent.

My husband and I have saved for our children in a 529 plan since they were born. We put the money in a fund that invest according to their age. So the younger they are the more aggressive the investing is and as they get closer to going to college the fund takes less risk. 

I'm happy to tell you that my oldest is in college and we have all the money she needs for four years including enough for her to stay on campus. All from her Maryland 529. And this is even with the losses in the stock market during the Great Recession. We are also on track for the other two.


...Just an update - we don't merge our finances! Not until marriage! :)

Very smart!  I didn't want to presume. :)

Good answer.

These are quite frequent. The amount isn't rolled into the mortgage (i.e. increasing the debt and therefore interest payments). Instead, the shortage is split into 12 payments and added to the montly payment. No extra interest is charged.

If it will help your cash flow and you don't want to take a big hit from your savings add the shortage to your monthly payment. 

What do you think about people borrowing money for school and assuming that they will qualify for IBR and have their loans "forgiven?" I mean, aren't we ALL paying for that in the end? Seems kind of like walking away from a mortgage you can pay - we all foot those bills, too. Where is the integrity in making min payments and just waiting for others to take care of your life choices?

We are all are paying for the loan forgiveness. However, I don't have a problem with helping people who are choosing to work in the public sector or in jobs where the need is great. 

But to your point, I also discourage people taking on debt in the first place so that they don't need loan forgiveness. 

Due to my field of study, I was able to avoid student loans during graduate school. My wife couldn't and came out owing $60k. I've always felt that it was our debt, not hers. It was never an issue (and felt really good paying it off earlier this year).

That is outstanding!  Congrats to you both.  I love that you looked at it as "our" debt and worked together to pull yourselves out of it.


It was your debt and glad you treated it that way.

My grandfather was the money person and my grandmother had no idea how to even balance a checkbook. He passed away relatively young and while it took a little time, my grandmother was able to handle it. She lived another 35 years after he passed and never had a problem. Her biggest hurdle was believing in herself that she could do it.

That's usually what happens.  But what I love is your husband is basically saying, "You rock at this and I could never compare!"  That's a great compliment to you.  But I also agree he'll be able to figure it out.  Sounds like you're leaving him very well set up so as long as he knows how to get everything, and you show him a little bit here and there over the years, he'll be A-okay.

Thanks for your answer again. YES, you did hit the nail on the head. I've noticed that since switching jobs I also learned to spend less. Less shopping, less dog-walking fees (i walk from home), more excercise and, overall more freedom. I know i need to set up a good savings/retirement plan soon but my income is SO irregular from month to month that it's hard to set up.

It'll get better and more consistent over time.  If you believe that, you'll make it happen.  But for now, just being able to enjoy all the amazing things you just listed above seems worth celebrating.  Cheers to you!

My wife, 57, is a full-time nurse at hospital. I'm semi-retired, 63, and adjunct teaching 3 courses at 2 different colleges this fall. House payment is about $750. Cars paid. We don't have much debt except for damn credit card, which we can Never quite conquer. Owe $3,500 to $4K on it. I'm trying to hold out til 66 for SS. So these are the tight months. Suggestions?

Try to figure out why you can't conquer getting credit card debt you can't pay off every money.

I would like to suggest you get my latest book "The 21 Day Financial Fast." I'm telling you that because I think the plan will help you. For 21 days you can't spend on anything that is not a necessity. AND you can't use credit. The idea is to help you figure out where your money is going by stopping your consumption. You may find you are buying things you don't need and you may find that you have the money to get rid of the debt. 

How do we find the right 529? We are military and move every few years. Our "residency" is in Florida, we currently live in NC. Have also lived abroad. No telling where our kids will go to college. Does state matter?

The state  matters if you want to take advantage of state tax deduction for contributions to a 529 plan.

Check out this site to help you find a plan 

Just :) for your answers. Make that :)x3

You are welcome from both of us.

If you are the money spouse what advice would you give to avoid getting angry at the spouse who won't even try to know what is going on financially?

Ooooh...that is a great question and a challenge that so many face!  For many, it's simply too overwhelming.  What angers you about your spouse admitting they're just not good at handling the finances and are overwhelmed by the thought of it?

I admire what you do, and respect that you both are happily married. Might I suggest a topic for future consideration? Single people, more specifically, single women. I never thought I would no get married, but here I am, mid-fifties, with a lifetime of doing it all alone. I don't have the luxury of leaving my job. I pay the mortgage, insurance, and bills. On top of this, trying to save for retirement. Two can do so much more than one, with many options. How about a chat or article or book to address the significant financial challenges of being single?

Good point. I will say that most of what I write applies whether you are married or single. 

But I see your point. 


I'm so sorry but the time is up. If I didn't get to your question please know I read all of them so your time was not wasted.

Keep looking for my column because you may find an answer to your question there.

Thanks for joining me today and thanks to Fawn Weaver for being my guest.

Take care and stay financially safe.

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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Fawn Weaver
Fawn Weaver is the author of "Happy Wives Club" and founder of the Happy Wives Club online.
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