Color of Money Live: Why I love a joint bank account for couples

Feb 14, 2019

Send in your questions to Washington Post nationally syndicated personal finance columnist Michelle Singletary.

This week, Michelle is joined by Michael and Susan Beacham for the book club selection, 'Official Money Guide for Couples.'

“Knowledge isn’t power. The right knowledge is power.”

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Thanks for joining me today. And since it's Valentine's Day I love to hear your questions about managing money with your honey. My guest are Susan and Michael Beacham, authors of the "Official Money Guide for Couples."

So let's get started.

Hi Michelle, In December instead of the regular financial fast I started using all cash to curb my spending - and WOW. I hate seeing those greenbacks slip through my fingers. I learned this: I was spending about 2-3 times what I actually needed. (On what??) Every purchase became a deliberate instead of a passive decision. Companies can't collect all that crazy data on my purchases and stick me on every emailing list in creation. I now know how little I can live on and still be happy, which has given me a sense of how free I can be from the lifestyle trap of NW DC. Also, it has prompted a lot of interesting conversations with people, at which point I can ask them - do you read Michelle Singletary? Anyway, thanks for all you do!

Love, love this testimony. Thank you for sharing and for being an advocate for my work!

I think you have to figure out what works for you. When I married my husband, ALL of our initial little snits were about money. I was a mini-Michelle, he had this strange idea that if you had money, it was ok to spend it (I know, right?). One day it came to a head when his sunglasses broke: he said he needed new ones; I said of course, assuming he'd pick up a $10 pair at the drug store; and he came home with $120 Oakleys. !!!!! (And they weren't even polarized!). But then I realized: we could afford it. We had no debt except a mortgage that was less than 2x our salaries, we were maxing out our 401(k)s, and we had other savings besides. So as much as I thought it was a really stupid way to spend money, I didn't have the right to tell him he needed to do it my way. But I also didn't want to drive myself nuts biting my tongue over every stupid thing he bought. So we created an allowance system, where both of us got a little money from every paycheck put directly into separate accounts. He got to spend his with zero critical thought from me, but I could let go because I knew those silly "extras" were limited to a figure that would not affect our budget. Meanwhile, I got to save mine; it covered a trip to Europe with my mom, and it's still over $25K now! Yes, we could have managed with one joint account -- but at the cost of a bunch of stupid little fights over stupid little decisions that don't actually matter in the long run. And I am not exaggerating when I say that 95% of our little annoyances and grievances went away with that one little change. So for us, having some separate money was absolutely worth it.

Read Michelle's column: Why you should keep a joint bank account. (Happy Valentine’s Day!)

I know you have heard of the envelope system.  An envelope for each spending goal helped us.  Newly married at an age when we both had worked for many years - and - managed our money without considering anybody else's opinion - we had our first big argument over my desire to purchase a lamp.  A $39.00 lamp! Michael kept the books and paid the bills.  He said "it's not in the budget!" Huh.  So, I suggested we create envelopes for our expenses, put cash in each month  - and label one of those envelopes "lamp".  It worked  - but not in the way I thought.  By the time we put enough in that envelope, I no longer wanted the lamp.  That's the beauty of delayed gratification - it gives you a cooing off period and you might just find that what you thought you wanted - and potentially argued mightily for - was not that big of a want after all. Worth a try.


Me and my "boo" have always had joint accounts. Nothing separate and married 27 years. I believe it facilitates conversations not just about the big things but little things too. We also support the idea of couples having an "allowance" so they can spend on things they want but perhaps their spouse doesn't see the need for. 

Would it be a good idea to freeze our credit?

I think that freezing credit is a good safety measure.  The credit agencies are now required to offer this service for free, and it's relatively easy to do.  But you have to do it with each agency separately. 

I'm very excited (perhaps too excited) to report that I received my Federal tax refund on Tuesday - all $250. I carefully calibrate my withholding allowances so that I get a small refund. I wish I could report similar success on the DC side, but I ended up owing $143 - due entirely to an error I made in my projection calculations for the year. At least I learned from the experience and won't make the same mistake next year.

Read Michelle's column: Surprise, no tax refund for you! What not to do if you owe the IRS.

So  - YAY YOU - refund!  And another high five from learning from a money mistake - many do not.  Now, what do you plan to do with the $250?  Consider that every dollar is an opportunity to save and invest as well as spend.

You did it just right even with owing the small amount to DC. So many people try to get a large refund. Makes no sense to me to allow Uncle Sam to hold your money all year and then wait to get it back. This is particularly so if you have debt  you are trying to pay off. 

Anyway good for you!

Hi Michelle, I wanted to send in my good news today! I did my taxes over the weekend and got a refund equal to about one of my paychecks. Today I adjusted my withholding (I'd been having an addition $20 held out each paycheck which I just stopped) and instead increased my 401(k) contribution. My husband and I have enough in our emergency fund to cover 6 months worth of bills, $3000 in our life happens fund, and our only debt is one last student loan and our mortgage. We're throwing lots of extra money at the student debt and are on track to pay it off 15 years early (I know, I know, it was dumb to take out that much to begin with). All this is due to several years hard work and saving, and reading your chats and columns regularly! Thank you!!!

Love it. Yes, instead of a refund let that money work for you by investing throughout the year! 

I’m middle-aged, currently single, and childless. Not how I hoped my life would turn out, but here I am. My goal this year is to plan for my old age (as opposed to retirement) and get everything together. Will or trust, medical directives, power of attorney, etc. I took care of both parents and helped with grandparents so I’m under no illusions preparing for old age is just a matter of paperwork. I have people I can call on, but none are really in my daily life and I’ll probably outlive more than one. What should I be thinking about? Long term care insurance? CCRC’s? If so, when? How do I plan to stay one step ahead of declining health and more scary, cognitive decline? I’m not worth a lot—maybe $300-350K.

If you can afford to enter a CCRC, that's a good option.  My parents always said that when one reaches the age of 80 they should "run for cover."  That's the age at which they went into a CCRC.  Long term care insurance has gotten quite expensive, so evaluate it carefully to see if it will give you what you think you will need. 

How do we prioritize saving for retirement v saving for an emergency fund v saving for a down payment v paying down student loan and credit card debt? Should we do them in order or a little to each? How much to each?

They have pretty much equal priority.  Work on all of them at once.  But get rid of the credit card debt fast as it is holding you back from achieving the other goals. 

No doubt that something needs to be done to fix the problem, I remember Obama as a candidate, he proposed that they keep deducting FICA tax until $250K rather than the lower limits of about half of that. It was a great solution and an easy fix. The next day, people criticized him, because he promised to not raise taxes, a day later he backtracked and made believe that wasn’t what he meant. He never address it again. Unfortunately this issue has been ignored by every president since Reagan adjusted the retirement ages. The longer we wait, the harder the issue will be to fix. I’d support a fix over any wall…

Read Michelle's column: Trump’s State of the Union address didn’t mention fixing Social Security. That’s a problem.

I'm in total agreement with you. Politicians keep kicking this can down the road. It's not easy now and for sure won't be easy when the trust funds can't pay 100% of benefits!

Vicki Ibarra's sad story this week really stuck with me, most of all that she helps her friends and family ("several of whom had come to rely on her") but none helped her when she really needed it. While it's worthwhile for the Post to write these articles, it would be a much greater good to send you to advise her how to get back on her feet, like a financial makeover, with lessons for all. In particular, it seems those who are helping friends/family, worthy or not, are particularly vulnerable to financial crisis by living paycheck-to-paycheck and not having an emergency fund. How can they break this cycle and take care of themselves first...? Can you help someone one on one?

Read The Post's reporting: Refilling prescriptions and no more date nights: How government workers are girding for another shutdown

I love your idea of helping a federal employee (or government contractor) get back on track financially. So if there is anyone out there who might be willing to have me work with you (probably virtually) and will allow me write about it email me at 

I have a question about how to calculate retirement savings goals. My goal is to save 15% of my gross salary per year. I make about 100k so this for me is about 15k. I'm not sure how to factor in the dividends that are paid on my investment accounts when I'm assessing my savings goals. My current IRA investments pay dividends of about $10k per year, all of which is re-invested in the same index fund. Do the dividends count as 10k of my 15k yearly savings goal, such that I only save another 5k per year? Or do I need to save the full 15k per year? I'm just not sure if dividends "count" or if those numbers should just be considered growth that is separate from my yearly contribution. Hope this makes sense.

The dividends should count as "growth" in your portfolio as they will be automatically reinvested.  You should try to put $15k of new money into your portfolio every year to achieve your stated goal. 

As a recently (repetitive?) furloughed Fed, I had set aside $ so that I was ok (financially) during the 30+ days of the shutdown. Had replenished those funds when I finally got paid. But refused to use those funds until full funding is finalized. And - also listened to you about reducing exceptions (slowly since July) am happy to report that I owed less than$100. While I usually get $2k+ in refunds, I am grateful that I didn't OWE that much. THANK YOU - A Consistent Fan

I had friends furloughed and recently, a loved one that was laid-off.  And emergency fund is just a priority.  Nothing brings that home more than all of a sudden being faced with nowhere to go for more cash.  Being properly insured, both with health, life (in case a loved one dies) and home (in case your home reveals a long-missed leak) go a long way towards living life in peace and in making sure that life's wrinkles don't upend you financially.  You don;t need that on top of a financial crisis.

I hope one of the lessons from the government shutdown is that we all need to have an emergency fund. I understand for many that's hard but I try to encourage people to save something -- anything. 

Can you talk more about good debt v bad debt? Thanks

Read Michelle's column: Yes, all debt is bad debt

And, read more: Debt: Smack it or hug it? My debate with Michelle Singletary.

Good debt is debt you take on to acquire an asset that will appreciate over time or allow you to earn more over time (e.g., a house or a college education).  Bad debt is debt you use to fund a lifestyle that is really beyond your means given your current income.  An example would be putting a vacation you can't afford on your credit card.  Keep in mind, though, that good debt can become bad debt if you have too much of it.  Taking on a $100,000 student loan for a cosmetology degree is probably not a good idea, for example. 

I'm in the school of all debt is bad - mortgage, student loans, credit cards, 401 (k) loan, money borrowed from your mama.

Look, if I can get you to have a healthy hatred for debt and not consider any of it good, it's likely that when you do feel you have to borrow money, you'll borrow less. 

I like to say if debt were a person, I would slap it!

Think this way and every time you borrow you will question if you are taking on too much debt. 

This is a case where it's good to know yourself. I am much better at saving a big windfall than I am at saving every month. Sure, in a perfect world I'd figure out how to be a better monthly saver, but I'm not letting the perfect be the enemy of the good.

I get it. But do try to reduce the refund if you have debt at least. 

My car is approaching 200K miles. I want to drive it until it dies, which could be tomorrow, or could be another 2 years from now. However, we don't want to be caught without a car if it bites the dust suddenly, so we are looking at cars now. I always have stuck with new-to-me used cars, as I hate the thought of all that money lost immediately to depreciation. But for the type of car we want and need for our family, a 2-3 year old car is surprisingly not that much cheaper than a new-new car. Plus, we can't be sure that when my car dies, there will be a lot of satisfactory newish used cars on the market at that point. With that background explained... my husband thinks we should just get a new-new car when mine dies, instead of having to be without my car (which I need) for a while while we hunt around for a good used vehicle. Thoughts? We have about 20K saved up now for when the time comes. Should we buy new? Or hunt for a used car? Or, start hunting for a fantastic used car and if one pops up, buy it even if my car is still chugging along?

The marketplace is always full of good used cars of various ages and in good condition.  I would say that it's not a big risk to simply wait for your car to die before purchasing a good used one.  I agree that it doesn't make a lot of sense to pay for a new car given the immediate depreciation once you drive it off the lot. 

I say wait too. There are so many good used car sites where you can find a car within hours, literally. 

I started reading your column a little over 3 years ago and it has helped me greatly. With a little bit discipline, (really a lot of discipline) and your nagging voice in my head saying all debit is bad. I have been able to get rid of my daughter’s student loans and credit cards debit this past year. I have saved an additional $5k in my emergency fund and $2k Life Happen Fund. The next thing is to get rid of my car payment. I just wished I’ve known this back in the 00’s I could have saved myself so much. But when you know better you do better. Thanks again and keep the good advice coming.

It's not just knowledge that is power. It's action. And that's what you did. Good for you!

Like many people, I just increased my withholding last year (claiming 0 allowances) but didn't look at the tax tables. I have a Master's degree and am reasonably well informed on a lot of things, but not finance, so I couldn't figure out what else to do. The result is I owe about $4000 this year. I can pay it, but I'm annoyed. Will be interested to see how many people are in the same boat and blame the "tax cuts" from last year.

It's not you. The IRS tried to get the tables right but still couldn't given the many tax changes. Just glad you have the money. But lesson to all of us. Check your withholdings after you do your taxes so that you don't owe a lot or get a large refund. 

What is a reasonable amount of student loan debt? What should I do if my financee has more than what is reasonable for what we expect to make in combined income?

I'd say it's reasonable if you can pay it back within 10 years based on your current and projected income.  If your fiance has more than what you consider reasonable, then you will have to work together to create a plan to get it paid down as quickly as possible.  It's not going away, you need to face it head-on.

No amount is reasonable. 

Now having said that, you and your honey need to sit down and really talk about all this debt and who you plan to tackle it once you get married. 

Do you think there are minimum amounts of "being on the same page financially" for a marriage to work? I love my fiancee and can't imagine life without him. But we are SO different on money. Are there certain areas to make sure we're compatible on - and others that we can learn to "live and let live" - perhaps via some of the tips and stories shared already?

In short, yes.  The same page that you need to be on is your joint goals for your financial life and financial future.  If one of you is a spender and the other one a saver, that shouldn't preclude you from achieving your goals if you both work on them together. 

I really hope you are going to go through a very good pre-marital class that has a financial component. A saver can marry a spendthrift and they can peacefully coexist as a couple with minimum financial fights. But it takes a lot of work, communication and compromises. 

The key is that you have the same core financial values. For example, I would not have married my husband had he been reckless with credit cards not caring if they got paid off. Or he saw nothing wrong with buying a new car without discussing it with me and we agreeing when it was right to buy. If he didn't believe in tithing, it would have been a no go.

Work out the financial kinks before you say, "I do" because the ceremony and rings do not fix what may have been broken before you get married. There are some things you can live with but some that will nag your marriage and cause major problems if you are not on the same page.

And if you go through counseling or you can't come to agreements on some key things DO NOT get married. I know you  love each other but love is sometimes not enough to overcome the riffs that occur when you don't share the same financial values.  

My younger sister had her first fender-bender recently in the icy weather a few weeks ago. With help from our (wonderful-amazing-underappreciated-deserves-a-five-star-resort-vacation-to-herself) mother, they indeed found a good used car within hours, and bought it within a day. If we're allowed to shout-out here too, the business was Member Car, in Derwood MD 260 reviews on Google with a 4.8/5 star rating.

In this case, don't mind the shout out. 

Without any context, I am confused by "increased my withholding" and nevertheless "owe $4000" (which likely incurs a penalty for underpayment). Perhaps the OP also has a side-hustle. But then they should be paying quarterly estimated taxes in addition to withholding by an employer--which is entirely unrelated to changes in the tax law.

Yes, we do need more information but it could be so many things because there were so many changes including the limit on state and local tax deductions, the elimination of personal exemptions, etc. 

And the person may not have to pay a penalty. The IRS is waiving the penalty for underpayment if people paid 85% of what they owed.

All of our credit cards are in both our names so I presume that it is necessary to freeze credit under both of our names. Is that correct? Aren't there actually four credit agencies?

Yes, freeze it individually.  There are three consumer credit agencies where you can do that, Equifax, Experian and TransUnion

We had an emergency fund so were mostly okay during the furlough. The feeling of having to dip into an emergency fund for something that is SO CLEARLY not an emergency is a whole other story, and probably is better suited to Hax's chat. We saved that money thinking about health problems and natural disasters. Not this.

If you received back pay after the furlough, then are you able to use that money to put back into your emergency fund?

My dad once told me - in answer to a question I was sobbing over - that life is not fair. He is right.  That's why emergency savings is so darn important - and insurance - and planning for when life is not fair.

Yes, definitely replenish your emergency fund.

But I get you. Husband was furloughed. We didn't end up having to dip into any of our funds but it came close. And although we had the money, I was HOT at the possibility since politicians should NOT be holding people's pay hostage. And let's not forget the contractors and other workers who will not get back lost wages or business income.

I have always been a good saver but my fiance has $50k in credit card debt. Should I pay it off before we marry?

That's a tough question I can only answer with more questions.  Have you talked about his credit behavior?  Do you have a plan for this never happening in your future?  Will it help or enable him to pay off this debt before you marry? 

Assuming that neither of you is going to continue racking up credit card debt, then you both need to work on a plan together to get it paid off as quickly as possible, while also focusing on your other joint financial goals. 

Yes, ask all those questions. But me, I would NOT pay off the debts for someone I am not married to.

I might even wait to get married until after that much debt is paid off or significantly reduced especially if it wasn't due to an illness or maybe a job loss. 

If this is consumer spending -- dinners, movies, TV, etc. that's a problem and it's your "boo's" problem not yours. 

Dear Michelle, Thanks for all your amazing advice! Under your direction, in the last year I have increased my savings for retirement to match employer contributions, funded my "life happens" savings, put one month's expenses in my emergency savings, and gotten my credit card debt down to $2,000. Recently a family member passed away and left me $9,000 and I'm torn about what to do with it. My home needs some repairs (a new fence, replace a few old leaky windows). I was planning on getting a HELOC (I have lots of equity) to tackle those repairs. Do I still go for the HELOC and use the inheritance to pay off my credit card and put the rest into emergency savings? Or should I pay off the credit card and apply for a smaller loan? I would really appreciate your advice. Thank you so much! Mary

No HELOC for you!

What I would do?

1. Since you have an emergency fund and life happens fund and at least getting the company match for retirement, pay off -- in full -- the credit card debt.

2. Fix what's absolutely need on the home with the money that is left such as fixing the leaky windows.

3. Save for the other repairs. Do not borrow. Just save and pay as you go.

There's been a lot of comments over the last few weeks about the impact of the tax law changes. While I can't say if it's good or bad for an individual person, you can't JUST look at your tax refund (or lack thereof). You also have to take into account that your paycheck changed throughout the year. Our HR department put the new tax rates into effect in February so comparing my Jan take home to my Feb take home and adding up the difference for all of 2018 put $8,100 more into our pockets. The taxes we owe are similar to last year so net/net, we're up (and I'm still not a fan of the changes as the largest recipients are multi millionaires).

You are right and I said so and so did my colleagues at the Post. 

What works for us is each doing what we're good at. He manages the investments, retirement account and college fund. I'm the budget-minded one who looks for the best deals when we need something, does the grocery run, stocks up when diapers go on sale, etc. We check in from time to time, but trust each other and find that "divide and conquer" keeps our home and marriage humming.

Key to this success story is that they both know and have agreed on what their strengths are and how to apply it to their money life.  Sounds like they have conversations about money.  Always good.  Always good.

And if you are both trifling about money, the least trifling spouse should be the treasurer.  

Shopped on Tuesdays to piggy back on grandma's senior discount. Coupons. Special events like graduation dinners were saved for $10 at a time in envelopes. I watched her carefully pay off 100% of the credit card debt when the interest stopped being deductible (it happened right around the time my dad changed jobs and finally started making a bit more money. But they still set their withholdings to have a fairly substantial (for the time) tax refund. It paid for summer camp for me and my brother at a time when there was finally money for that. Before they could afford camp, we took swimming lessons at the public beach, art classes at the rec center and went to the library 3 or 4 times a week. It isn't ideal, but it seems to work for some people. I just don't understand why only some banks have a wallet system for their accounts so people can "move" money into a designated place without having to have multiple accounts. It would be very, very convenient for me, but USAA doesn't have this functionality yet.

There are apps that will allow you to create "envelopes" for your savings so that you can allocate it towards various goals.  Take a look at and 

What strategies have worked best for you to bring up contentious money issues with your spouses without triggering defensiveness and argument? What words do you use (or otherwise). It's just so easy for the topic to go to a bad place IMMEDIATELY.

Read Michelle's column: On money and your honey: Rules for homefront harmony

Whenever possible, talk about your money philosophy before a problem surfaces. Get into the practice of talking about money.  90% of couples who say they are in happy relationships discuss money at least once a month. Create questions in advance for each money discussion. Share your short and long-term goals. Would you be willing to share full financial responsibility if your partner wants to go back to school? What's more important - building a savings account or buying a new car?  What would happen if you needed to help a family member out? If your parents need financial help?  You get the drift - questions that give you a clearer picture without always just dealing with money when you both disagree.  A proactive approach that will get you both used to talking about money so that when the problems arise - and they will - you both know how the discussions will go.

Read the link for ideas on how to handle money differences.

One thing that could help is to do a test run as soon as forms are available on the IRS site (hopefully mid year). If zero deductions is not enough for your case, you should list an additional dollar amount to withhold each pay period on your W-4 form with your payroll dept. You can change your W-4 as often as you like through out the year, especially if you have major changes like marriage, a new baby, a second job (no need to give a reason so they don't need to know about moonlighting), or any other reason you wish to withhold more or less. Too many people don't realize this.

Too many!

Thanks for doing this and for the great book club recommendation this month! Great for getting started on an overwhelming and highly emotionally charged topic!

Glad it helped!

My spouse and I have been married less than a year. We are both upper-middle age, with teenagers/young adults from previous marriages. We have separate accounts. I am reluctant to suggest a joint account because 1) I like managing my own money. and 2) I feel funny about it because my spouse makes about 3 times my salary, and I'm not sure how to explain a joint account would benefit us. I'm not sure it would make a difference. Spouse does handle all the big bills; I take care of everyday sorts of expenses. And, I'm not sure I have any business telling spouse how to spend his money he works hard for. But me myself, I often feel poor since my paycheck is so little and pretty much is gone by the time I get the next one. I've never had a joint account. Sounds confusing to me

What are your philosophies about your income and your assets?  Do you consider your collective income and assets to be shared resources or is what's yours yours and what's his his?  I'd start with that conversation.  If resources are shared, a joint account can work,  but it's certainly not necessary.  You owe it to your marriage to get on the same page and talk about your respective financial goals for the coming years. 

Please talk. Share your insecurities. And really separate or joint, you are living a life together so I don't think it should matter who makes more. You are sharing a life, share your resources like you're one. 

Hi, Michelle, because I read your column (real paper!) and follow the chats, I also followed your advice to file my taxes. I did so last weekend and while I'm still getting a fed refund (owe the state a whopping $12!) it was smaller than last year and that's fine by me. I think one reason I am still getting a refund is that I increased my 401k deduction twice last year so less taxable income. I haven't filed state yet (although calculated!) because I wanted to be sure the federal return was accepted and it was.

Love it!

Recently our daughter got a new job that required a car. Her old car would have cost more to repair than it was worth, so my husband, who has been squirreling away his extra money, gave her his 8-year-old car (not that old for us--we keep our cars until the wheels fall off) and was able to write a check for the one he replaced it with. It feels so good both being able to help our daughter and not having a car payment!

Debt-free such a freeing experience!

Hi Michelle: We have a nine month old and will be getting a child tax credit this year. What should we do with the money? We have a 529, a cash account for any future needs for our son (like braces), plus our savings and retirement accounts. No debt except for a mortgage.

All of those accounts are worthy places to stash that child tax credit.  Which one needs the most help right now? 

If there are some immediate needs you could use the money for that. Otherwise, take the money and spread it around. But definitely regular fund the college fund.

Do you have a trusted friend or relative that can hold critical information? If you get run over by a bus tomorrow would someone be able to find your banking info? Get into your computer and cell phone? Know if you have a mortgage? What other bills? MOST IMPORTANT - what is your social security number. You can't get a death certificate without that. SSA will not release the number without a death certificate - yes it is a classic catch-22.

These are good questions to consider! 

Have you asked those questions of your parents? After my dad died, it was a treasure hunt.  He would not talk with us about money and we suffered through the transition of helping my mom. If they - parents - won't confide - at least ask them to write in down and put it in a safety deposit box where you both have access. 

Since we're talking about student loan debt: My daughter is a senior in HS, and we have been saving for her college since before she was born. I know how hard it is to get need-based aid once you make six figures, so we played the college merit aid game: we had her look at some "safety" schools that were using merit aid to attract better students. She has been accepted to a (private) school she really liked with a 2/3 scholarship and given the opportunity to compete for a full scholarship! But even if she doesn't get the whole thing, we can pay the remaining costs out of what we have already saved. So: my kid is going to college, debt-free for all of us!!!

Read Michelle's column: How we sent our children to college debt-free

"We have been saving for her college education since before she was born." Michelle - can we get an "Amen" here?!?  Planning, EARLY and OFTEN.  One warning:  Make sure you have your college fund money liquid enough as you get close to needing it to pay the tuition bills.  Be aware of your timelines.  As you get closer to needing the cash, you have less time to recover in a viable stock market swing.

Definitely an "amen." All three of our kids are in college right now and nobody has and debt. Nada!

Although I sympathize with the federal contractors who won't get back pay, I can't cry for them. They do the same work as federal employees, usually for a lot more money and better benefits. Esp those working for DHS, and DOD contracts, and all the IT folks.

This is so NOT true. There are folks who work for federal contractors who do not make a lot of money - security guards, folks who clean the buildings, etc. 


I was wondering if either or both of you would share your own personal philosophies on how much you believe is "enough" for retirement? My husband and I have seen multiple financial advisors over the years to help plan our investments. I've found it confusing when recommendations for how much you should plan to have varies so much! We have good incomes, little debt other than our mortgage (which is on track to be paid off in 1/3 the time) and will both have some pensions (military and civilian). We're maxed on TSP each year and "appear" to be on track. We have different approaches to what we'll need. My husband thinks we'll be GREAT!! and I always worry that it's not enough. Some people say 1/2 your current income, 2/3 your current income, or something else entirely different. Do you have a rule of thumb? We look forward to an equivalent style of living. Thanks so much!

Working with our own financial advisor we have developed a saving plan to accumulate a certain sum of money by the time we plan to retire.  Our operating assumption is that we will withdraw 4% of that sum annually.  That 4% is equivalent to an income that we will be able to live off of. 

We also work with a professional.  Finding the right professional is important.  Here are a few questions to ask the potential advisor: What are your professional credentials? What's your experience working with couples like us - similar ages, goals and assets?  How do you charge for your service?  Is there any flexibility with regards to fees or how you charge? Do you earn fees for product sales or referrals?  How would you describe your investment philosophy and approach? What can we expect with regard to return (and why) on our portfolio? What is your recommended approach (and why) to asset allocation?  How often will we meet to review our investments and how will you keep us up to date on our portfolio?

How much is enough is an individual decision based on the retirement you want. My grandmother didn't want to travel. She went to church and that's pretty much it. So she could live on retirement on less. Me, I want to travel and see the world, take classes, maybe even go back to school for another degree (In counseling). 

Run your own numbers based on your needs and wants. Try the retirement calculator at Or the one at AARP. 

I have a 3-year-old. I want to teach her about money, but all she has ever seen me do is use the credit card to pay for things at the grocery store (the place I take her to the most often in her life). She believes a plastic card is how you pay for things. Will I have to start carrying cash to teach her the value of money?

Yes.  Carry cash.  Children do not get abstract (plastic) concepts until  as late as early 20's for some.  So - translate abstract concepts like spend and save into concrete terms.  How?  You guessed it - cash.  Next - go to the library and start to take out books on money.  There is a reading  list on our website under "resources". Picture books generally do a nice job of explaining abstract concepts in concrete - picture by picture - age appropriate ways.  Then listen for openings he will give you to talk about money.  And then talk your head off.  Verbalize purchase and your thought process.  It will - it does - pay off in the end.  The research supports this. And while you are doing this - know that your child is having fun.  Money is a world they want to be involved in - but are so rarely invited in to.  

Agreeing to be interviewed by a Washington Post reporter was the smartest financial decision Vicki Ibarra has ever made. She has now received $22,475 through her Go Fund Me request. I myself donated some money after reading the story. Her original request for $8,000; that has now been changed to a $20,000 goal – and she has passed that point. I don’t begrudge her one penny, but for anyone who is thinking of donating, there are other federal employees and contractors who have been hurt by the shutdown and some of them also have turned to crowd funding.

If true, thanks for the update.

So sorry but that's a wrap. Thank you so much for joining meant today. Great questions, comments and testimonies. 

Love on somebody today. 

See you 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 Wednesday and Sunday and is carried in more than 120 newspapers.

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Michael Beacham
Michael Beacham is the president, COO and co-founder of Money Savvy Generation and Susan’s co-author on the Official Money Guide series of personal finance books. Prior to co-founding Money Savvy Generation, Michael spent 18 years in financial services and consulting.
Susan Beacham
Susan Beacham is the CEO and co-founder of Money Savvy Generation, an organization that offers financial literacy curricula, books and other items to help people get smart about money. She is the author of seven personal finance books for children, teens and adults.
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