The Washington Post

Color of Money Live (March 23)

Mar 23, 2017

Join Washington Post nationally syndicated personal finance columnist Michelle Singletary for an online discussion.

Read Michelle's recent columns.

So glad you could join me today. I love this forum.

If you're new. It's a text chat. Submit your questions or just sit back and read. I often learn so much from the questions and comments. 

If you're regular, thank you. Thank for taking your time to join this discussion week after week. But do me a favor, each one of you invite a friend, co-worker or family member to come chat too. Really trying to build a community here.

Also, if you don't subscribe to the Monday and Thursday newsletters please consider doing so. I try to find interesting personal finance articles, columns that will keep you informed. 

Anyway, let's get started. 

why are most of the programs being cut are senior and those with low incomes it seems the wealthy are becoming wealthier with trumps assistance . Why are not more speaking up about this my husband works 2 part time jobs and draws social security and we barely make it. It does not leave seniors a lot of hope for the future please address this . Thank you DONNA CLOWERS

I hear you Donna. The thing is the less fortunate who can't afford healthcare or are barely making ends meet also don't have the funds to pay lobbyist to argue their cause in Congress. You see the wealthy get access not just to the best things in like such as healthcare but also the politicians!

About 5 years ago I opened my first credit card, a secured card that required a cash deposit to secure my line of credit. In the procceding years I have opened two more credit cards that provide rewards, and purchased my first house. I would really like to close the secured card as I don't really want more than two cards, it has an annual fee, and it would be nice to have the cash that I used to secure the credit line. But I'm a little worried this will tank my credit score, because my this is my oldest line of credit, and closing it will have a large impact on the average age of my credit. I always pay my credit card bills on time and in full, so am I worrying about nothing?

I hear you. And it's a smart question. But if you don't have any debt on ANY of the cards you have and your score is in solid territory -- say 700 + -- you can close that card you don't want. 

The key is that you don't want to have debt on any of the cards because it make you appear as if you are using more of your credit than you are.

Also, that older card is not likely to be removed from your history. If fact, positive credit history can stay on your report for up to 10 years! So you will still benefit from that positive history and longevity. 

Now your score may drop a bit -- just a bit -- but not for long. As you continue to pay your bills on time it will pop right back up. 

So close away my friend. Save that money!

As an early Mother's Day present, I planned to use part of my tax return to buy my disabled mom a nice lift chair. It does her a lot of good just to come into the living room instead of staying in bed all day. She felt bad about me spending such a large amount on her, and of course the store had signs up everywhere about their "special" 12 month interest free, blah blah. So she asked if I wanted to finance it and spread the payment out. Internally I recoiled at the idea of taking on debt when I could simply pay, and I heard both you and Dave Ramsey in my head screaming "No debt!!!" When it came time to talk price with the salesman, I asked if they had any special deals. He said they had a special financing deal, and I was politely but firmly dismissive. He asked how I planned to pay (debit card) then said he could give me 5% off. So - YAY!- for saving a size-able chunk, but the true testimony is the change in mindset. My mom is an amazing woman I love dearly, but finances were never her strong suit. Thanks to you and a wonderful colleague that I know is reading this, I have been unlearning a LOT and relearning some great lessons. Thank you for all that you do.

Seriously, been a rough week for me -- couple of weeks really. So your note is such a blessing. Shoot you making me cry.

Because you GOT IT. Sure taking on that free loan wouldn't hurt you. BUT you now get it that it's a mindset. No debt. No debt. No debt. 

Plus I want to encourage everyone to become more financially healthy so that they can have "extra" to help others. See you gave out of your "extra." Many good money managers only have enough for themselves. But I believe in addition to managing your money well for you -- you do that so that you can take extra and help others. 

Having your mom come out and be with others in a lift chair you got with the "extra" benefits her healthwise and your relationship. 

That's what this about. It's not about you. 

So thank you and big thanks to that colleague (HEY!) because that person spoke truth into your life! And I'm all about duplication. Each one, teach one. Imagine how many more good money managers we would have if family, friends and co-workers pushed others. 

Thank you for sharing. You made my day!

I have not read all of the supposed cuts for seniors and I have agreed with Presudent Trump on most this , however , our senior citizens have worked and paid taxes all of there adult like and some earlier. My sister has worked and paid taxes since she was 15 or 16. How can will it be right to take from the people that has supported so many through programs for the poor . They have paid taxes all of their life and now do we leave them uncared for. Please tell me it is not so! I voted for President Elect , Dod Trump and I believe he will help our country get past all of the waste or help to others though I believe that it is time to take care of Americans and especially the elder that have paid much in taxes through their working years. No I do not think that should happen . President Trump ; Sir, please don't try this. It is not fair to all that have given much and certainly do not need less. I pray you will think this through and you will see what it would mean for them and your presidency. I hope that you are in for 8 years and accomplish the things you have revealed to us during the election. I will be praying for you to make the right decision. There have been people on Welfare or Social Service if you rather that should have had to enroll in school for a job they could then support themselves with or find a job and pay taxes so that the people who have paid in for the security of their future should thus receive their money. I am aware that I make it sound to easy. I went back to school when I was 20 somthing. I was blessed to have a sister who let me live with her. I went to school after that to learn a skill in Medicine. I was proud of myself and this made me keep going and sometimes working . My husband could support us , but Anything can happen unexpectantly . I wanted to do my part , I went to work when my son was starting school. Unfortunately he has severe asthma and I had to take care of him so I discontinued working until he started to grow out of it. He is now a healthy handsome man who is a police officer. I am thankful. The only bad part is the credits I need for Social Security, Thank the Lord I will be able to draw off if his Social Security if anything happens to him and with him. My husband has worked since he was a teenager . He was fortunate to get a job with a telephone Company. He worked in other towns quite a bit and aI pulled up roots and went with him if possible. He worked unbelievable hours ; many times 7 days a week; sometime from 8 am till 8 am the next day to go right back to work that morning. There were times I could not snatch my children out of school to follow him. I took care of home and children working as much as possible without allowing just anyone to watch my sick child. I learned to make things meet. We missed my husband and their dad. We do what we have to. We had one car and one that was not all that reliable, but we made it with due diligence. now I am presented with the idea of us not receiving his Socisl security that he paid into for our future and what was sometime I believe used for other needs. No No No. It is not right . I am concerned with the plight of some people that did not or could not be as successful ; however this is a horrible wrong to those that did do all they could by working long hours Paying a large sum of their pay for the promise by our government that we would be anke to used these fund when we retired or became disabled as I did. I do not think that after working and saving to his 401k and matching funds with the Telephone Co and trying diligently to take care of his family and to have to be away from us so much that we deserve an assault on our retirement for those that have none , but another way must be found. Please do not engage the Social Security for a program on which is it's money was promised, paid for by people that paid in and worked 36 hours in 36 hours in a row at times ; many times to be given away by those that planned their life a different way. I am not talking about mothers that needed help or anyone for that matter but please find a way ; another way. Thank you President Trump . I know you will do right by this!

I hope the President and Congress hear you too! 

The word for today is compassion, which I believe is what you are advocating. The thing is all of us -- ALL OF US -- are a job away from being in need. Balance the budget. Pull in spending. But remember that there by the grace of God go I. 

OK I get it that competition could potentially bring down health care costs. But in order to compare costs from one provider/hospital/clinic, etc to another you need price transparency. That's not something I've been able to get except for basic doctor office visits and drugs. Do you have any hints for how we as consumers can push for and get cost estimates up front so we can essentially comparison shop for health care. Note: I understand cost is not the only factor in health care provider decisions but right now it's the one element I can't seem to get a handle on in advance. Thank you!

I spend a lot of time on the site for Kaiser Family Foundation. Start there for lots of research on healthcare costs. You might also try healthcare bluebook.com 

I'm interested in taking in a roommate, but am a little wary of stories I read about taking someone into your house and having to go through a long legal process to get them out if things go awry. Are roommates a good idea these days?

I'm a big believer in shared housing. 

But I hear you. It can be scary. The key is to vet the person. Ask for recommendations from friends, co-workers. people's who opinion you trust. Be sure you understand what kind of tenant the person was before. But don't rule the person out if they've had some financial trouble such as a job loss. However, make sure you have a clear conversation about your expectations. And write up a lease. If you're concerned make it very short-term at first, like month-to-month. 

Online you can search for "how to find a good roommate" and you'll find tons of advice on how to do it right. 

Hi Michelle. I have subscribed to both of your newsletters, but don't receive them via email. Is this a technical problem on my end, or have others had this problem. Thank you.

I'm so sorry. Have you checked you spam filter. I signed up myself for them so see how they look in email and discovered they were going to my spam filter. You may also have to approve to get it into your inbox. 

Some folks use their work email and that may be blocking them. 

If you check and can't get it fixed shoot me an email and I'll have someone on my end to check. michelle.singletary@washpost.com

I've noticed my FICO score drifting down from the 800s to the high 700s. We have no debt, pay our credit card balances off monthly. The reasons stated on the summary was that since we do not have any retail loans or a mortgage, there might be a question on ability to pay. Just how crazy is that for one who has managed to be debt-free and manages credit wisely?

It's crazy! But ignore it. Really once your score is say 750 or more doesn't matter. In other words a 750 is just as good as an 850. 

You're fine. No worries. 

Hi, I have about $70k sitting in savings and having trouble deciding if I should use about $50k to pay off my mortgage or divert it to a mutual fund. I have 2 years to retirement and will have a CSRS pension and TSP savings at about $250k. I know it's not making much of anything sitting in the savings account. Part of it is my emergency fund. Thanks

Me, I would get that monkey off my back. 

Pay the mortgage off.  And with the money you were paying on your mortgage build back up your savings. 

For folks who don't know this person as the "GOOD" gov't Civil Service Retirement System pension. It's generous. And with the $250,000 I wouldn't be worried about paying off the mortgage.  

Mini rant here. The GOP, party of anti-abortion because they love babies, wants to ditch mandatory insurance coverage for maternity care? How does that make sense to not provide good care to women so they can have healthy babies?

No.

Sense.

At. 

All.

 

There is one rule that works in every calamity. Be it pestilence, war, or famine, the rich get richer and poor get poorer. The poor even help arrange it. Daily Telegram #1019, Thoughts Of Will Rogers On The Late Slumps In Stocks (31 October 1929 With current conditions, the seniors are helping.

True. Very true. 

But I believe to whom much is given, much is required. 

Look, I'm not talking about wealth transfer, which is what some might think the moment they read what I wrote.

What I'm saying is when you do better, don't begrudge reaching back to help pull others up. 

My husband and I built a larger house because we expected that there would be times we would have to help care for family. And we have. Right now have a relative living with us so we can help her financially. She doesn't pay rent so that she can pay off debts. 

What if we said to her, "Sorry you were irresponsible. Suffer."

Instead, we say "Come, we are doing okay so we don't need your rent money. Us it to pay off your debts so that you can bounce back and out of our house when you are able."

That's the attitude I think we should have toward the less fortunate and even those who make mistakes.

 

 

Knowing that many people are understandably concerned about the President's budget proposal, I think it's helpful to remember that no President has the power to change federal spending unilaterally. Congress must take action, and then the President has the opportunity to sign or veto the legislation. Our governmental system is designed to have a balance of power.

Very true. But have you seen our gov't of late?

A lot of people in power are multi-millionaries who have no clue or compassion for people at the other end of the economic spectrum. 

Is it true that credit agencies send slightly different credit scores to bank and to individuals? I got my credit score but then the bank with which I'm looking to refinance says my score is 30 points lower and thus I don't qualify for their best rate. Is the bank lying to me?

So sorry to say the bank is not lying to you. There are actually a number of different credit scores, all based on different systems. So the consumer scores we get can be different -- up or down -- from the ones pulled by the banks. 

The reason is the bank may have say bought and is using a FICO score system from 2010. (The systems are very expensive so many lenders don't necessarily  upgrade to the latest scoring model). So your consumer score may be based on the latest scoring model, which doesn't count some things that the old system may. 

Anyway, if you can wait, work on your credit for a few months -- pay off some debts, make sure you are paying your bills own time -- so that you can get the score up and get the best rate.

Ask the lender what's pulling down the score they pulled. Then do what you can to get it up before refinancing. Because getting the best rate translates to a lot of money. Rates should be fairly stable for some time. 

There are so many personal finance blogs out there from people just telling their story about getting out of debt to actual finance experts/professionals. Who do you read, and who would you recommend for women to read? Thanks!

I love, love NerdWallet. 

I also read a lot of blogs from bankrate.com. I look at the blogs on AARP a lot too. 

Mostly I try to find blogs, sites that inform me. I do like personal story-type blogs but with limited time I try to maximize my time but reading blogs that have solid advice or that watch trends, etc. 

Diary Yesterday, in the Los Angeles area, while I was walking along a highway, a police car pulled over in front of me with its siren wailing and blocked my path. The policeman shouted at me: “Say, what’s the matter with your car?” “My car?”, I asked him, not understanding what he was talking about. “Sold her?” I shook my head. “At the shop for repairs?” Once again I shook my head. The policeman paused in thought, since it seemed to him to be impossible that there should be a third reason for not having a car. “Then why aren’t you driving it?” “My car? But I don’t have a car.” This simple piece of information also went right over his head. https://libcom.org/book/export/html/51647 Say sorry, you're obsolete!

Ok, a couple reads later, I think I get your point. 

We can't fathom that others don't have the resources that many take for granted. 

I had someone complain that poor people don't follow up on their doctor apts. so then why should they be allowed to have free health care.

Well, maybe they can't get to the apt because they don't have reliable transportation. Or they can't take off from their jobs. 

Perspective. Many people need to get some.

 

A lot of people that I know think that for anyone who is not related to them, so what you're doing is A-okay. Take care of your own! Just don't expect me to take care of yours! Of course they can't grasp the notion that something could happen like a catastrophic illness which would exhaust the family finances rather quickly. And people say *I* live in a bubble?

Exactly. And for the record, we would and have considering taking in unrelated folks. Just got enough related folks that need help. 

Just saying. 

I know, you'll shame me for even bringing it up.

First, I don't shame. 

This is a safe place for people to share different view. I welcome people who disagree with me. I only ask that you be civil. And you better not cuss at me.

But it does tick me off a bit that you don't see that money is ALL up in politics. I mean really.

What is the healthcare debate all about but money, the thing many people don't have to afford health insurance. 

Don't put me in a box. It is my JOB to write about anything and everything connected to money. 

Politicians make laws that impact your pocketbooks.

Taxes?

Our pocketbooks. Your wallet.

Healthcare?

How much you will have to pay to be covered. 

Jobs.

Housing.

School funding.

All related to our wallets. All related to the legislation that comes through our local, state and federal government. 

The rich have lobbyist. The big corporations have lobbyist. They have access.

I'm the regular folks' access. The politicians read what I write and I write what I hear and feel from the people who can't afford lobbyists. 

Love and money. My territory.

Kids and money. My territory.

Faith and finances. My territory.

Politicians and money. My territory. 

And I would like to keep my job so that I can pay for healthcare, a home, etc so that I don't become one of the people some politicians don't want to help. 

in the last 20 or however many years, more people have been lifted out of horrible poverty, and it continues to happen. We in the US are very wealthy, even those who aren't doing as well as others. Are there problems? yes, still. but that doesn't meant we are poor like there is poverty all around the world.

I hear you. 

But right now in this country there is a kid who went to school hungry. Right now in this rich country there is a kid whose family does not have a place to live. They are homeless.

Right now in this country is someone going sick because he or she can't afford to go to the doctor.

We still have great need right here in this country.

The remaining balance on my mortgage is down below $10,000 and should be paid off later this year. It is so hard knowing I am so close. I keep wanting to just write a check for the balance and pay it off now. I know it is better to hold my savings and wait the few months. I know that when it is paid off, I will have to pay the taxes and insurance. Anything that I should plan to do to make sure the money I have been paying for the mortgage goes into savings and isn't spent?

Hold on. Freedom will come.

I suggest you take those payments and automatically put them into an account different from your household account. That way you can see it build separately and not be tempted to just incorporate it back into your budget.

Please let me know when you get that monkey off your back! Want to shout with you.

One thing that has really helped my husband and I budget is to write out what our three financial goals are for the year and leave it in our wallet. It took a month for me and my then fiance to realize paying for a big wedding never even entered the discussion. That made wedding planning ridiculously easy. We got married at City Hall, I bought a pretty (non white) cocktail dress and killer heels and then took our nearest and dearest to dinner at our favorite restaurant after. It was a fun, very low stress day. I love that every time I wear my dress, shoes or eat at the restaurant, we feel like we're reliving our wedding day. Bonus, the whole day cost less than $1000 and our short and long term financial goals stayed on track! Thanks for helping us keep our priorities straight!

I LOVE that idea. Thank you for sharing.

At 51 I lost my job due to budget cuts in December after 27 years with a severance package. How do you choose a financial advisor to help me manage your money until I find employment? Should you pay off your credit cards with the money that you have and still have a mortgage to pay? Trying to figure out the best things to do with my 401K? Lost and Confused

Hey lost. First, don't pay off anything. I hope you won't, but you may be unemployed for some time and you need to make sure you hold on to cash for your monthly expenses. 

And rather than paying for a planner go to debtadvice.org 

Make an apt with a budget counselor to help you look at everything and devise a plan until you are employed again. 

Also for now, if you are okay with your 401 (k), just leave it where it is. Pay the minimum on your credit cards until you see some light at the end of this tunnel. Once you are fully employed again then get aggressive with paying off the cards.

Good luck.

Yes, on both sides of the aisle. Senators, congressmen, not just "Trump people."

Yup, agreed. 

Remember that epi-pen controversy, where the manufacturer jacked up the price to like $600? So if you had a severe allergy and no health care, or insurance with a bad prescription policy, you had to pay out the nose for something that would save your life? A co-worker of mine just had a prescription filled for one and she paid...TEN DOLLARS. Yes, we have great insurance where I work, but can people really not see how grossly unfair that is? And I know why so many people are fine with it. Because they're convinced that anyone who doesn't have good insurance, or any insurance, or a job, is just sitting around waiting for a handout. Seniors who can barely make it on SS? Eh, they obviously didn't save enough when they were working, or just blew it all on fancy cars and manicures and having babies they couldn't afford to feed instead of saving. (You get the subtext?)

I get it. Wish others would too.

We really should call it what it is on this financial chat. It is a massive tax cut for the wealthiest Americans, of which I am one, honestly. And I would rather that money support low income people who need health insurance. I will be fine without it. My taxes went up under Obamacare. That's okay. People were covered and I continued to live a very, very fortunate life. What has happened to this country?? When is enough money enough?

Got just one word for you.

Amen!!!!!!!!!

Many people are concerned about the budget plans from the White House. It is very important to understand that the budget plan from the White House is not the final answer at all. It is a request or a proposal. The way for the average person to influence this process is to contact their member of Congress. In our Constitutional process, the House of Representatives is the starting point for any spending bill. From the House, to the Senate, to the President (with many possible twists and turns). But the President's document at this point is just a request, the same way that I can request a raise from my boss. It's just a request. The House of Representatives is voting today on the health care act. No amount of documents out of the President's office can dictate or pre-empt the outcome; all of those documents are just requests for the House of Representatives to consider. So if the readers are concerned, they should contact their member of Congress.

Thank you for pointing this out.

We the people do have a voice. Lift it up. For what you believe. I just ask that you remember if you are doing well that you didn't get there by yourself. 

Nobody.

Nobody can lift themselves up by their own bootstrap!

I finally got some numbers from the choosetosave.org Ballpark Estimate calculator. Thanks for the article on what the magic numbers should be. I ran it several times with a variety of conservative & optimistic numbers, and retirement dates. And I _think_ I'm pretty much on track. I notice that I do not enter a value for how much I add to my retirement savings year-to-year. That is part of the output when you don't meet your desired replacement rate. Is that right? It does seem to be a useful tool, but it's confusing and they need to make it more user friendly for mere mortals.

I love that you took action.

And I know the tool isn't perfect but at least you worked it and reworked it meaning you became up close and personal with your numbers and that's truly a step to making sure you have a secure retirement.

Good for you. 

Hi Michelle, I wanted to provide a testimony to a recurring discussion I've seen in your content for recent grads: moving back home. I did it for three years after college, and of course it wasn't the most glamorous choice. I had a long commute from the outer suburbs to my job downtown, was very far from my friends, etc., etc., but as I'm reaching the end, I've never been more grateful for my parents' support, and I realize how lucky I was to receive this. I lived rent-free, earned a masters degree without the additional loan deduction for living expenses, secured a job offer without worrying how rent would be paid next month if I didn't get one, built a more mature and appreciate relationship with my parents, etc. Since starting work a year ago, I have an emergency fund of 12 months of essential expenses, a Roth IRA and employer-sponsored 403b I regularly contribute to, your very important "life happens" fund, and next month is my LAST month of student loan payments. I will paid off a 10 year loan term in 11 MONTHS because I did not pay rent. I am so excited!!! I've finally made moving plans for the summer, but until then, I'm also able to slowly buy pieces of furniture with each paycheck, instead of immediately needing to purchase many things at once. I totally understand that not everyone can move home, and that other families may work out different expectations for payment, etc., but I strongly suggest that if your parents offer your this kind of support to any degree, PLEASE decide your social life can sit on the back burner for a little bit while you get so many essential things set up. -Grateful

Grateful thank you for sharing!!!

I see your questions. This hour moves fast and I try to get to as many questions as possible. But alas many leftovers.

But I say this every week. I read every question and comment.

I see some today that will make a great column. So keep an eye out for your question to be answered. In fact, I answered some questions in today's newsletter.

If you can't wait please come back next week. Let me know I didn't get to you and I'll put you first in line. 

Thanks for joining me today. Thank you for your comments. I appreciate all of your views. Even in our disagreements we can learn from each other.

See you next week. Take care.

In This Chat
Michelle Singletary
Michelle Singletary writes the nationally syndicated personal finance column, "The Color of Money," which appears in The Post on Wednesday and Sunday and is carried in more than 120 newspapers.

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