Color of Money Live: "Can't have a dollar without a penny."

Sep 22, 2016

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

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My contract with the cable company just ended, and of course my rates went up. I called them to drop some services and was able to negotiate a better rate for my plan and am now saving $60 per month! My tips are: get routed to the service cancellation dept when you call, explain you are looking to cut services to save money, and be really nice to whomever you are talking to.

First up a great testimony. Thanks for sharing.

What do you do when your first attempt at the 21 day fast goes badly? We were less than 5 days in and I was spending $5 out to eat on breakfast and the wife decided we needed new sheets for the bedroom. I agree the sheets were old and needed to be replaced. Should we just hop back on? Or reassess how we went wrong and try again later?

So for those who don't know, the 21 Day Financial Fast, based on my book of the same name, involves you NOT spending on anything that is not a necessity for 21 days, three weeks. You pay all your pays as usual but no eating out, movies, etc. 

It's a tough thing to do -- even for me. I do the fast every year typically with folks I'm teaching in classes at my church.

So, with five days in, just keep going. Don't give up. Sure you fall, but that's okay. We all fall -- even me. 

As you pick it back up reassess what you can do to make it successful. One of you say "No" if the other is trying to cheat. 

Also, think about doing it again in three to six months taking the lessons you learned stumbling the first time to prefect the fast the second time around. 

You can do this!

Is it better to start social security at 66 or wait until 70 if you are in good health and still have one spouse working.

So this is the question so many ask and really it's one of the few times that I have to say "it depends." I've been talking to some experts and even they don't agree. Just recently went to a conference and a financial planner said the rule of thumb of waiting til 70 isn't always right. At some point you break even. If you wait until 70 you miss out on four years of payments. If you take at 70 and die before your eighties or 90 you missed money you could have had. And some folks may have to take it at 62 even. 

The problem is the answer to this question depends on knowing when you will die. And since we don't know, you make the best choice you can. If you feel like longevity is in your future, then 70 would work giving you more money for a longer time.

I saw on Facebook you were looking for good news, and I have some. We have been saving a long time to be able to pay cash to buy a car to replace my 15 y/o van. Well, this month we finally have enough and I told my husband to start looking. We have not found anything yet, but are not in a hurry and hope to find something before something else happens to the van (we have put $1k in repairs in the past year while we were saving). Thanks for what you do, long time reader here.

Thank you for sharing. I really do need good news today!

And good for you. Do you know some people don't realize you can actually pay cash for your car!

I have been job seatching for the past 6 months. I need to take something. However most jobs seem to be retail work. If I take one I would no longerbe able to attend church on Sunday morning. So does going to a "servic economy" mean only the wealthy can attend church?

I hear you and makes me so sad so many are still having trouble finding good jobs.

So if that's all you can get, can you -- for just a little time -- find a church that has an early morning service before your shift or a service after you get off. My church for example has an 8, 10, noon and 6:30 service. There are some churches that have services as early as 6 a.m or 7. Might not be your home church but if this is important look around to see how you can attend until a better job opportunity comes around. 

Or worst case, get the DVD or CD of the service if your church records. 

How can we protect ourselves against Wells Fargo-type fraud? I suppose new credit cards would appear in a credit report, so continue to check those. Other accounts may show up in the transactions when they move money into them. But when the bank is actively hiding new accounts from their clients, I have to wonder how much we could actually see. Strumpf didn't exactly inspire confidence on the stand this week. And in retrospect (thanks to a refi) I'm happy that I got my mortgage away from WF.

I'm so with you. But the fact is in some cases if a company is cheating customers, you may not find out until after the fact.

But if and when you do, scream bloody murder and call every regulatory body you can to complain. 

And if it is off the post-contract rate, how close is it to the original rate? Seriously. This is on my list of things to do.

Good question. Not sure. Poster?

This morning, I bought the $1 biscuit instead of the $2.99 biscuit. I'm transferring that extra $1.99 to savings account right now!

As my grandmother Big Mama would say, "Can't have a dollar without a penny." 

So every tiny bit helps.

If we set up assisted suicide people could plan on enjoying life and then dying when the money is gone.

Not sure if you are serious and hope you are not. 

But I'm more optimistic. I think you can save and spend to live for however long you live. You just have to be flexible if things don't go as plan. Get roommates, move in with someone, downsize your expenses, etc.

Or realize you can't have it all. 

Yes, some people don't realize you can pay cash for your car. They also don't realize you can save enough to pay for a massive home repair bill that came out of nowhere. (Started with a busted dryer and ended up with $9000 in work. All paid from savings.) Or that you can pay in cash when your brakes die on the car 2 weeks later. Or that the only debt a person can have is their mortgage. And these are people with very good jobs...I'm amazed in reverse that they don't have more in savings - my 20's were a mess financially and I learned it's SO much better to save for things. Makes me feel proud of myself.


But I know many people aren't earning much so savings isn't as easy. Or they are helping extended family members.

Still, so many others can save if they only knew better. So as the saying goes, "When you know better, do better."

It had been sitting on the lot for a year, so the dealer was eager to sell it. He kept asking about financing, and I put him off until we settled other matters. Then I brought out my checkbook. He looked flummoxed, but if the car's going to depreciate the minute I drive away, I'm glad I'm not paying interest on that.

Amen. And love, love that you understand that a car deal is a deal in parts.

Negotiate the price of the car and don't talk about other things like a trade-in, loan, etc.

Then negotiate the price of a trade-in if you have one (Although my husband and I never trade-in a car. We fix it up and give it to someone who needs transportation)

Negotiate the financing, again separate from other parts of the deal. And go in there with a quote from your bank or credit union. Also please, please know your credit score so they won't be trying to push up the interest rate on you.)

I was able to cut cable completely and bought a roku stick for $40. Can use so many Cable Channels (ESPN, USA, FX, HBO) on this with my parents cable account. So I may be cheating the system, but I only pay $20 a month for entertainment and I don't miss a single thing

Lots of folks are cutting down on cable and finding other ways to watch.

I will say, if we don't want the companies to cheat on us, we shouldn't be cheating on them. Just saying.

When I was unemployed the job I found was Tuesday and Wednesday off. As a regular church attender who was taught that you are in church every time the doors open, I was very sad. However, I realized that God is not mad and it was more important for me to have money to pay my bills. I found a church in my area that offered an evening service and found a Tuesday night Bible study. The offered me the opportunity to worship. There was one church that even offered an afternoon Bible study. Don't think God is going to be angry or the world will end because you miss Sunday church. Also, my church where I grew up offers a Saturday night service I watched online when I felt I needed more. Options are plentiful. I was laid off from the job I was working on Sundays, and eventually landed a M-F gig. But be faithful to God and he will be faithful to you, even if you miss church on Sundays for a season.

Thank you for the encouragement for the reader.

You said it all.

which is a very different thing than just not going to work and hanging around the house doing chores (though I'll do that too). Finding that it will probably cost about 10% of what a vacation would. I think that is both more than I expected and less at the same time - possibly because I like doing cultural stuff and that costs money no matter where you are. But I have to say, it isn't that hard to absorb that kind of money into my regular budget with no bills to pay when it is over. And DC is a great location to do this. Hopefully the new museum won't be as crowded on a Thursday as will be this first weekend!

I need a staycation because in addition to the money for a regular vacation, I'm the vacation planner and for the first few days I'm exhausted managing everything!

I check my bank accounts several times a week. I would certainly notice if a random amount was taken out of one account to set up a new one. But I would also see the new account on my "home page" with the bank. Did Wells Fargo not have a place where customers could go on-line and see all their accounts listed out? That is terrifying. Or were they just not getting paper statements? That seems more plausible since lots of banks will ask you to opt out of paper statements. Which I don't think you should do. It is always a good idea to have at least one account with a statement that comes to your address for secondary confirmation of residence (other than your photo id).

They were actively hiding accounts I believe. 

Someone wise told me to start taking Social Security when I needed it, not when I wanted it. In other words, delay if you can.

That's a good way to look at it. I just think we have to be careful not to frighten people who "need" to take it at 62 or their full retirement age. The answer for everyone isn't wait until you are 70. 

I am 59 and my wife is 61. We are both still working by would love to have the freedom to retire soon. To help us toward that goal w e would love to me free of our primary mortgage in the next 3 to 5 years, but we also have a mortgage on a rental home. The rate on that loan is 4.375 while the rate on our primary residence is 2.75. On which mortgage should be making extra payments?

I use a "Debt Dash" approach to paying off debt. I recommend people focus on paying off the debt with the lowest balance first. So if the primary has less debt you would focus on that. When that mortgage is done, take those payments and apply to the rental. If I were you, the goal would be to be mortgage free on both properties and hopefully before you retire. I just don't like people taking debt into retirement.

Any advice on how I should go about paying for my child's college? (She just started as a freshman at College Park.) I have been fortunate enough to save enough for IN-STATE tuition, room & board for all 4 years. But friends advise me to still ask her to pay half with student loans so she has skin in the game even though she has always been an excellent student who never needed any externally applied motivation. I guess I could always decide to pay off the loans for her after graduation if she completes her degree in 4 years. But that seems like a lot of unnecessary student loan interest. What's your advice? Pay it all for her or make her have a vested interest in her education? Thanks for doing these chats.

Your friends are WRONG!

I hate that "skin in the game" line. It's ridiculous. 

Let's look at it another way. If your child got a full scholarship for all four years would you have her NOT take the money because she wouldn't' have "skin" in the game?

Of course not. You would be jumping for joy. 

You've saved for her to go to college so that neither you or here would have debt. Stick to that plan. And you can impose the same type of requirements a scholarship would, which is a way to make sure a student has "skin" in the game. My kids have to maintain good grades.  They  have to be involved in activities. They have to report to me how thing are going. I watch for any activity that would steer them wrong -- drinking, drugs, etc. So their skin in the game is knowing the money won't be there if they don't do their part. 

There are other ways to motivate students than requiring them to take on debt or work long hours taking away from their studies. For example, we don't allow our kids to work during the school hours their freshman year. After that, they can work a little but not so much that it hurts their education. 

Now if you haven't saved, your child may have to work. But do what you can to NEVER take out student or parent loans. 

What is the best way to approach debt collectors who are attempting to collect overdue credit account debts? Is there a way to negotiate to pay off the prinicipal without the interest? The creditor does not have the money to pay off the account and it has been sold to another company for collection. Where do we start to get this matter resolved?

If you the debtor save up some money and offer a lump sum payoff. And don't be afraid to negotiate. If you owe say $1,000, offer $200 or $300 to start. Then work from there. Because honestly many debt collectors know they aren't going to get but pennies on the dollar. And payment plans often don't work because if they did, the person would have paid in the first place.

Many debt collectors offer a lump sum option so ask. And if you get it, make sure it's in writing and you keep the payoff statement FOREVER. 

I am gainfully employed, married, homeowner. I have accumulated $30k in credit card debt, spread over 6 cards, with interest ranging from 0% to 15%. I am thinking of taking a personal loan over 5 years at 7% to pay all of them off. Any advice as to whether I should go forward with the loan?

First, what caused you to rack up that much debt? 

I ask because if you haven't dealt with the underlining issue, moving all the debt to one loan and freeing up the cards may not solve your problem. Often folks do that and then charge up the cards again. Now they've got credit card debt AND a personal loan.

Frankly, I would line up all the credit card debt starting with the one with the smallest balance. Toss any and all extra money on that debt while making the minimum payments on the other cards. When that card is paid off go to the next, and repeat the process. Often people don't end up paying more interest this way because when you see balances clear, it motivates you to work harder and put even more money on the next debt on the list. 

Don't take the easy way out. Suffer through this so that you remember the pain so that you don't charge up the cards again. 

My supervisor has said that I don't need to worry about losing my job, which came up because I fumbled over newly added responsibilities. I've not yet been asked to do the new tasks again. But I can't shake the feeling that I've muddied the waters here, which is unfortunate because I'm not yet fully vested. My husband's job is also shaky and recently cut salaries for all employees. He wants to go back to school. We have 6 months worth of savings, but fear of us both being unemployed and losing the house is eating me up. I've never been unemployed, even as a teenager/college student. I'm in one class that my employer is paying for, and would like to take another next year because the skills are highly transferable. Should I just start looking now, see how the rest of the year goes, or...?

Sometimes your gut is right. And sometimes not.

I would continue to work as hard as you can. And maybe have a candid conversation with our supervisor about the new responsibilities and what you can do to improve. Take any and all classes that don't cost you anything so that you stay tight with your skills. Do not. Do not take on any debt to go back to school for you or your husband.

Be smart about your budget now, saving more just in case but don't let fear of what you can't control (layoff) take you down. 

Finally, always keep an eye out for other opportunities. Sure look if you like but if you like your job see what you can do to make yourself worth keeping on.

My parents have decided to start doling out some of their hard-earned savings to my sister and me, $1,000/month each for the foreseeable future. My wife and I don't have much debt, and would like to open an account to hold these funds and whatever else we can save for a downpayment on a house in 18-24 months. Rather than put the money in a savings account with a very low yield, what could we do with those funds to help them grow a bit more to increase our nest egg?

Wow. How generous of your parents (although be sure they understand the tax consequences of their gifts).

You shouldn't invest the money if you are looking to use it within five years. Too much risk. You'll just have to settle for the pitiful savings rate in deposit accounts. 

All good suggestions. And in the end, how you worship and where you worship are between you and God. We grew up in a Silver Spring parish that had a Sunday 7 pm service. My parents told us of an incident where the priest berated late-comers in his sermon. One of those latecomers — dressed in scrubs — got up and walked out. Then sent a scathing letter to the priest. It was 1970 and the man was a surgeon at Walter Reed. He'd been operating all weekend on wounded soldiers back from Vietnam. "If being late for Mass is the only way I can attend Mass, that's between me and God." That story has always stuck with me. If providing for your family means working out a Plan B for worship, that's ok, I think.

I think so too!

The importance of a good emergency fund came home this week when it became clear that our sons will need significant orthodontic work. It'll stretch over a couple of years as one needs his work done now and we were advised to wait for about a year for his brother. It is a blow, but one that we can absorb. Thanks for all your coaching of us out here!

You are so welcome. And boy do teeth work cost a lot. But glad we had the savings too.

AMEN Michelle! My grandparents paid for my entire college education. I went to an Ivy League university and got a 4.0 GPA. Not having to work or worry meant I could focus on my studies, volunteer, and get involved in campus activities. Greatest gift ever and I have been supporting myself financially since graduation. No loans or debt meant I could take a job in the nonprofit sector and still pay rent!

Amen right back at you!

Raise a grateful child and he or she will be grateful for your sacrifice. 

Some good news/bad news here. The bad news is that my spouse was laid off 6 months ago. The bright spot is that we were able to reassess some of our spending, and while we had to dip into savings to cover some fixed costs while spouse is unemployed, we were able to cover most of it by making better choices. The GREAT news is that spouse has recently gotten a new job (but at a $60K pay cut, so we will definitely need to continue our good frugal habits). We anticipate that after fixed costs plus the occasional fun activities are taken care of, we will have an extra $1000 in net income each month. If you were us, how would you rank the following priorities: -extra payment towards mortgage (at 3.5% interest rate) -extra car payments (at 1% interest rate) -extra payments to student loans (combined, we still owe $90K at 3% interest) -restarting contributions to our kids' 529 accounts (we stopped when spouse lost job) -restarting contributions to spouse's IRA (also stopped when spouse lost job) -beef up our savings account (current balance is $20K, which covers 4 months of fixed expenses for us) Thanks for all of your wisdom over the years!

It's close to 1 p.m. so can't go through all your questions. But would make a great column, so it's on my list.

For now glad your spouse got a job. As for debts, do the Debt Dash, I described earlier. 

Your advice on downsizing - giving up anythin that brings joy to life- and then sharing space with a stranger seems much worst than dying

And that is why so many people are in debt or miserable financially or a burden on their family.

You are trying to bate me. And I get it. Get it a lot.

But I'm going to give you a serious answer.

It is not worst than dying to share space or open your home to someone who needs a financial break. I've done it lots of times and on the back end the folks left with a financial cushion and means to live on their own.

We all only have a certain amount of money and that means yes, we have to make choices and sometimes those choices mean we don't get what we want. We may not be happy or joyful about it.

But that's is life. You move and change according to things that happen to you and things that you make happen because of poor choices.

What you meant as nonsense I hope helps others make better financial choices.

So sorry if I didn't get to your question. I read all your comments and questions. Please come back and ask again and check out my column because it's very likely I'll answer it in that space. 

See you back next week.

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

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