Color of Money Live

Sep 24, 2020

Welcome to a weekly discussion about your money hosted by Michelle Singletary, nationally syndicated personal finance columnist for The Washington Post.

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Thanks for joining me today. One piece of business. You may have noticed the chat isn't featured on the Post home page. The chats have moved to a landing page. Here's the link. It might help to bookmark it to make it easier to join me every week. 

As always, I look forward to your Thursday Testimonies. 

Let's get started. 

<Whew> the chat link appeared. After the great chat culling, and now chats no longer appear on the WP front page. I feared we were done. . . . Now more on-topic, I got two messages from my Grad School lender congratulating me on paying off my loan... which I did 3 weeks ago. Now if only my old mortgage holder would hurry up and send me the remainder of my escrow...

Wow. Congrats on getting that monkey off your back. 

And keep on that lender. They have no problem sending you a notice right away when you are late paying, right? 

Also, keep all your paperwork!

Hi Michelle! Could you offer some words about the shortage of coins in circulation? The retailers don't have enough coins to conduct normal transactions. All those coins are in our houses and cars. With the stock of coins around the house, families could create both lessons and projects. Coins are highly useful for lessons on percentages and fractions. Meanwhile, families could create an incentive for the children to help gather up the coins, such as giving the children a 5% share of the haul. Each business and each bank will have their own rules for the ways they will accept all the coins, but ultimately they need the coins in order to keep transactions going. Thanks!

I think we've all gotten so used to using plastic and buying online that coins are increasingly seen as a nuisance. I mean they fall out of my wallet all the time. And frankly not very clean. But you offer good suggestions about getting the coins out of our homes and back in circulation. I know I have a lot around my home. 

Some interesting reading: 

Hang on to your nickels and dimes, the pandemic has created a coin shortage

 Will covid-19 end the use of paper money?

 

 

I loved the first installment. When can we expect more? Thank you!

Thank you! The response to the first part in the 10-part series has been fantastic. Part 2 on education runs this coming Sunday, Sept. 27

If you missed it here's Part 1:  

Yes, I was hired because I was Black. But that’s not the only reason.

And here is the podcast about the first installment: “I hired you because you’re Black.”

 

In other chats this week there have been quite a number of posts about the disappearance of the day's chat schedule from the Post home page. We understand that we can still access them from the Live Chats link on the pull-down menu, but that's only good IF YOU ARE ALEADY KNOW ABOUT THEM. The Post loses potential new readers when it makes the chats hard to find. Is the Post planning to cut back the chats? If you are tossed into the memory hole, will you have time to wave goodbye to us? (I still miss the late Warren Brown's car commentaries and Dr. Gridlock.)

I was as surprised as you about the changes. And I agree the lack of promotion on the home page will make it hard for new folks to find our wonderful chats. But if I do go, I will most certainly not do so without notice. And I miss the Warren too. And Dr. Gridlock. 

Is there any concern about residency issues where a person is a resident of one state, but has been living in a different state due to covid? I still have my house in the first state, but have only been there a few days since March. My spouse is there several days a week. I’m just wondering about potential state tax issues. Of course as soon as I am required to go to the office, I’ll be back in the first state, but for now I’ll continue to work from the second state.

You should consult a tax professional because depending on your income and where you earn it, you may need to file a return for each state where you lived for the year. 

Read: The 2020 tax year is going to be a hot mess, and the coronavirus is why

 

I bookmarked the live chat link years ago. My problem is the change the format. Much,much prefer having the list for the day. made it easier to go to old chats and to be reminded about what was coming up.

I totally agree! I even need reminders of which chats are running which day. I share your frustration.

Michelle, a few of my credit card statements show my current FICO credit score each month. After staying more or less steady in the 810s since (at least) last year, over the past three months (July, Aug, Sep) it's fallen 26 points and I'm curious why. I'm retired (in 2014, former CSRS Fed) and my wife has a job with our state gov't and has been working from home since March. It's of no real concern since we don't plan to do any borrowing anytime soon but it makes me wonder why. I even pulled one of my free reports (Equifax) to see if there was anything on it, but it looked fine to me. We have several credit cards but pay them off on time each month. While I'm spending more at the grocery store than before since we're home more, our overall credit usage is probably the same or a bit lower than before since we're eating out less and not traveling. The only possible reasons I could come up with were: (1) the last loan we had was our mortgage, which we paid off several years ago; (2) my wife was furloughed for 10 days in July (along with most every other state employee here) to save the state money and to ensure they got the $600 unemployment bonus, though I'm not sure if that would affect MY credit score; (3) we had two incidents of mysterious charges on different cards a few months back (one on a card of mine, one on a card of hers which is a joint account) that were quickly cleared, and both cards were replaced after we contacted the card company. Do you have any possible explanations? Thanks!

All the ways scores can go up or down aren't known to regular folks like you and me. I suspect if could be the fact that you paid off the mortgage. One thing that is factored in your credit score is a mix of credit - consumer loans, like a mortgage and credit cards, etc. When you paid off the mortgage -- and I know that's crazy -- you took out a big part of the mix. Another possibility is maybe your usage month-to-month is a bit higher and the system is factoring in that. Even when you pay off your bill every month -- for that time period before you pay off the bill - you could be getting scored and that leads to a bit of a drop. 

But overall, as I've reported before, if your credit score is 750 or higher nothing to be concerned about. All things being equal about the rest of your credit history, you still get the same credit deals as say someone with a score of 850. 

It isn't my only beef with the new webpage design. It's terrible. I can't really find anything at all. As they say, if it ain't broke, don't fix it. I still get the dead tree version of the paper out of loyalty, plus I like the things that aren't online, but I do most of my reading online. I've hardly read anything this week, and if that continues, I'm probably cancelling my subscription.

Please don't cancel. We are trying out different things to improve the look, readership. But the content is worth sticking around for even if the changes are a beast. 

That raises a whole new set of questions. If covid has you working at home for the same employer that you used to go to physically every day, where are you actually working for tax purposes?

I cover that in this column: The 2020 tax year is going to be a hot mess, and the coronavirus is why

But here's the section that covers teleworking

— Teleworking. Typically, you pay taxes on income earned in the state where you permanently reside and the state where you work. But with so many companies sending employees home to work to prevent the spread of the novel coronavirus, it’s possible many workers may end up paying taxes to two jurisdictions. This could happen if you’ve moved, even temporarily, but your income is still derived from work done for a company located elsewhere.

Unless you instruct your employer to withhold taxes for the appropriate states, you could get an unexpected tax bill, says Eileen Sherr, senior manager for tax policy and advocacy for the American Institute of Certified Public Accountants (AICPA).

 

Working even one day in another state could trigger taxation, Sherr said.

 

The AICPA says 16 states have reciprocity agreements with neighboring jurisdictions that exempt residents of a reciprocity state from income tax withholding. Most states will allow a taxpayer to apply for a credit for income taxes paid to another state. On its website, the AICPA has a state tax guidance chart for the pandemic.

The Mobile Workforce Coalition has a useful website (mobileworkforcecoalition.org/problem) on the requirements to file personal income tax returns when traveling to a nonresident state to work.

Since many folks have been forced work from home for the last 6 months (and likely for the foreseeable future), do you have any thoughts or tips on whether it's worth it to claim expenses for a home office on federal income taxes?

Well, covered that too in the article I previous mentioned. 

As I wrote, "Yes, you’re working from your bedroom, but no, you can’t take a home office deduction. Employees are not eligible to claim the home office deduction, even if an employer requires remote work because of covid-19."

But when the paper does awful redesigns, they have to expect it. Perhaps they think the new design will bring in new people. OK. Maybe. Maybe the new design is much, much cheaper to maintain. Maybe. But when you train up a huge number of customers to expect to see things that they like in certain places and then move them, you are going to lose people. And that is going to be more pronounced with tons of people having tight budgets and spending more time at home where they can get news from the TV.

I hear you. But change happens all the time. And as many of you have pointed out, it's not alway welcome or good. Still, hang with us as we work this out. I'm still here to help. 

There should at least be a link in the ribbon at the top of the homepage or in the Sections drop-down menu. As things stand now, you can't even tell that the Post has live chats!

The point I made too. I'm on your side. 

I don't see anything that is referred to as a landing page. It is my understanding that there is supposed to be something on the opening, i.e., web site, that can be clicked to get to chats. The only things on the opening page header are: search and sections and sign in. The Live Chats are way, way down the sections (menu). I am also a home delivery for the print edition. If the "landing page" is really the "sections" then that is what it should be called. The paper has not been the same since the ombudsman position was removed and subscribers have no one to gripe to.

Share your views with the executive and managing editors. They do want to hear from readers. And by landing page, I meant a page where all the chat information is located. But again, you are right that people have to know to search for the chats. But if you don't know a chat exist, you don't know to search for it. 

Hi Michelle - You often advise to set up separate pots of money for different purposes. I have a few different savings accounts and would like to set up more for different purposes, but am wondering what kind I should be setting up. In particular, I have one savings account with a pretty good interest rate - would you recommend setting up another one of those accounts? Or is it better to just keep adding to the one I already have since I'll get more interest with more money in it? Any advice you have on what kind of accounts to set up for different purposes would be appreciated (is it bad to just use one bank versus diversifying?) - and I'd like to have access to the money when I need it. Thanks!

I drive my husband nuts with my need to have money "pots." But for me it helps set up goals, boundaries, etc. So there's a pot for our semi-annual insurance payments which include cars for all the drivers in our home -- a lot. I want to make sure those funds are there and ready when the automatic payments come out. I like a pot for the "life happens fund," which is for car repairs, home improvements, etc. And frankly I don't concern myself with interest because it's so tiny these days. I look for accounts with no fees. I look for accounts where it's easy to navigate the online banking app and transfer from one account to the other. I only just make sure I have a big bank (for the ATM network) and credit union. 

But where are you actually working if you are sitting at a screen linked to your employer's system? You couldn't do the work without that link. In the electronic age I'm not sure where you physically sit is necessarily where you are working. And if you do have to pay taxes to two states, do you get credit from one for what you paid to the other?

Tell that to the states desperate for funds. Please consult a tax professional. What you think is right doesn't always square with tax rules.

It's been my experience that sometimes tech people will change things just to be clever without actually understanding what the user actually needs. Were newsroom (do you still have one of those?) people consulted about changes in the home page? It's disturbing when you say you were as surprised as we were. Who makes decisions like this?

I was not consulted. That's all I can say. I'm not happy either. 

No offense, but how is the IRS going to know you're working in your bedroom in Connecticut instead of your office in New York if you don't telll them? Is your employer going to report it?

It's the states that may know through workers comp and unemployment insurance funds. 

Also, there's no indication about when the chats start or end. They're the reason why I subscribe.

I hear you. And I'm acknowledging your complaints because you are articulating the points I've made since being informed about the changes. 

I just found it... way, way down near the very bottom of the Sections drop-down menu. I didn't even know that menu went on for so long below the edge of my screen!

Didn't know either. But yup it's there. "Live Chats" in the section drop down ;(

I had that happen too. I dropped from the 840s to the 820s after paying off my mortgage. It was due to the timing of paying my credit cards vs. when the credit usage was reported and that I was now using a higher percentage of my credit. Paying the credit cards a week earlier would get most of it back but like you wrote, the difference between an 820 and an 850 doesn't matter. Besides, what do I need credit for since I don't have a mortgage

Exactly. People often don't realize that even when you pay off your credit card before the due date your usage for that month depending on timing can be reported and for that short period. This is why I pay my bills off about a week or two early as well. 

This is me too - including bookmarking and finding missed chats. It's much better literally as a weekly calendar. I don't see any benefit to a narrative.

Agreed.

Michelle, as a longtime Chatter and fan of your work, I was so moved by the first chapter of your story. It's so important for people like me (white woman whose credentials for jobs were never questioned) to realize the steeper climb people of color face. Not to mention the "Whack-a-Mole" conundrum of if you get a job/degree, it's because of affirmative action, if you don't get a job/degree, it's because you don't work hard enough, etc. Walking a mile in your shoes has opened my eyes and I believe the series will open others' eyes. Thank you!

I very much appreciate your comments and comprehension of my mission for the columns. Talking about race is so hard and emotion. But we have to have these candid conversation. 

So thank you! 

double and triple recommend Michelle's answer. Some states will call you a resident based on very limited time spent there in certain circumstances. For example, the last time I researched it (quite a long time ago) NY called you a resident if you spent any amount of time in NY during 30 days of the year IF you also had permanent access to place to stay in NY. So, pied-a-terr in NY? spend any time in NY during 30 days of the year including just driving through or going to the airport, and you are stuck. That is an extreme situation for NY, but you get the idea. This is NOT standardized across the US. And it is uncommon for states that do not border each other to have agreements so you only get stuck paying taxes in one, not both. Just talk to someone and understand that you may already be stuck with having to claim that you changed your residence for this year.

Yes, please consult a tax professional. Next season for many may not be the best for a DIY return. 

I don't understand why, if there is a coin shortage, the first article is telling us to hang on to our coins. Wouldn't it be our civic duty to get them back into circulation, even if it's just giving them to the bank? (I say this as someone who has run into problems getting quarters for my apartment building's laundry machines.)

I have been trying to pay with coins more now.

Same for me in regards to FICO Scores. No change in spending or transactions.Before used to FICO score of 820 plis for many years. as you say it doesn't make a difference 750 plus.

The credit scoring system can make you crazy. But just remember this. Keep your debts low and pay on time. Those two things will keep you in a range that you need to get the best rates. Anything over is just bragging rights.

my browser doesn't let me "scroll" down the sections. If it is below what I see when I first open it up (goes to "business" with my current screen size and magnification level) I can't ever see it. Using updated Firefox browser. You have to check that EVERYONE can use the fancy stuff.

Yup!

I am also a daily/Sunday subscriber and unlikely to drop, as I do support journalism, especially now. But I gave up trying to find the chats years ago. I just search "Washington Post Live Chats" online to find them. I also do that to find Post movie (pre pandemic) and tv reviews and recipes. The newspaper's search function is horrible. And Voraciously instead of the much better bygone Food section? Terrible. Again, if I want to find a recipe that I know was in the Post, I turn to the internet.

Truthfully, I do the same. 

I too hate that the link to the chats is gone from the homepage, but I otherwise really like the re-design. And for those of us that have been long time Post readers, we should know by now that web design changes and updates from time to time to keep up with advances in technology. BUT please feature the chat links on the homepage.

Thank you. Well said!

I am a 66-year-old woman, still working full time till age 70 (hopefully), I have two friends, both retired women in their 70's who are on tight budgets. One retired very early, but then got divorced, so her expected retirement income was drastically reduced. The other admits she should have saved more while she was working. Michelle, keep up your good work, nagging people to save more and pay off their debts and mortgages as soon as possible.

Thanks for sharing. And I shall keep pressing. Because life happens and often not the way you plan - if you don't plan. 

Yes, but the point is you won't look for it if you don't know it's there. The Post is locking out potential new chat readers by hiding them.

Agreed.

 

In this area, there's reciprocity, so nothing really changes. The people who are going to get hit hard (or maybe are going to like it) are in New York/New Jersey. There's no reciprocity, you have to file in both states and take a credit for the taxes paid in your non-resident state. New York isn't going to like it when their revenues drop from all of the commuters working from home. Don't think they won't try to find a way to claim the income was really earned in New York.

I've heard from a lot of NY folks with tales of being hunted down for the money. Take heed folks. 

Pre-covid I purchased my first home (condo in high-cost of living area with downpayment assistance loan). Due to the terms of the downpayment assistance loan, I cannot take a line-of-credit until it's paid back so I want to make sure that I save up a sufficient home maintenance fund. Can you provide some resources on what is recommended? Thanks!

Save for home maintenance like any other budget item. Just build into your monthly budget a home improvement/maintenance line item. Make it a bill. For example, I have a regular amount taken out of my payment every single pay check for my life happens fund. This money is then used for repairs, etc. I pay it like I would any other bill, just to myself. 

Due to Covid, my husband's employer has cancelled their contributions to his 401k. Luckily I just got a part-time job (up tillnow I've been a SAHM). I was planning to open an IRA and put all my earnings into it, as a way of compensating for the loss. I have been told that we can make the maximum contribution even if it's more than my earnings this year. In other words, take some money from hubby's paycheck and put it into my IRA. Is that correct?

I'm not completely sure. Let me check. I'll respond either here next week or in my Monday retirement newsletter. 

Thanks for joining me today and for all the feedback. You have been heard. Not sure things will change but we - I - value your opinion. For now, see you back here 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. 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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