Color of Money Live

Sep 22, 2011

Need advice about how to handle your personal finances? Whether the struggle is saving for retirement, organizing your bank files, or talking about money responsibility with your spouse or loved one, Post personal finance columnist Michelle Singletary offers her advice and answers your questions on Thursday, September 22 at 12 p.m. ET. She will be joined by Susan Ende and Gail Parent, authors of "How to Raise Your Adult Children: Real-Life Advice for When Your Kids Don't Want to Grow Up," this month's Color of Money Book Club selection.

Sorry about the slight delay and cancellation of the live video chat. Had a fire drill at the Post.

Anyway let's get started.

My fiance and I are in the market for a home, he rents and I own a townhome. I'd prefer to sell my house and put the proceeds toward the new house, but he wants me to rent my property since it's my main asset. We're both in our mid 50s, and I'm concerned that I may not be able to get a renter and then we're stuck with two mortgage payments. We're both pretty much debt free, but also saving for a wedding/reception. Your thoughts?

I've been a landlord before and hated it. But there are plenty of people who own property they rent and like the business.

But make no mistake it is a business and you are right to be concerned about carrying two mortgages. What if you don't find a renter? Can you handle two mortgages? And for how long? If you ultimately decided to get the townhouse be sure you work the numbers and have a separate cash cushion for that.

Me, I would sell after I got married and our finances are joined.

More importantly, I would highly recommend you two get some premarital counseling just so you can settle these types of issues before you get married.

Just a reminder my guests today are Gail Parent and Susan Ende, authors of "How to Raise Your Adult Children."

It was my pick for Sept. 

And given recent Census Bureau data this is a hot topic. The Census bureau found millions of adults not in college have moved back home with their parents.

Are you living this stat?

If so, tell us how it's going. 

My oldest child is 5. He recently started kindergarten. I want to teach him about money from an early age. My husband and I were discussing giving him an allowance, which sounds good, but he does not actually go anywhere to spend it to learn about money. We buy all of his food, clothes, etc. His grandparents buy most of his toys. His only expense is $30 to play soccer at the YMCA. Is it good to start paying him an allowance at this age? Should we wait? How much should he receive? NOTE: He does not eat a lot of candy, so no need to let him buy his own. Thanks!

You can wait. I haven't found any study that proves giving an allowance improves the way a child handles his or her money long-term.

In fact, it can hurt if you just give the kid the money without any teaching.

It's more important for the child to see how you handle your money as a household. It's more important to talk to your children about money and your financial values. That's how they learn. By watching and talking. 

How do you not send your kid to the college of his or herchoice even though we don't have any money saved for college? But we want him to have the best college experience.

There are student loans and job opportunities at colleges. Before you tell him he can't go to the college of his choice, be sure to check out all financial possibilities because there is help out there. You and he will have to work hard to get to the right sources.

I recommend that parents talk to their children about their own financial situation and that their children understand while they are still in high school what their parents can and can't afford. If the children want to work during high school and save money from a job during the summer, they may be able to pay for a more expensive college. However, there are very good state schools that cost less than private schools and a child can get a good education. Parents should not put their own financial situation at risk to pay for college. College is only a tool and a kid can get a good education to prepare him for his career at a state school.

The good news is that once you graduate from college, no one cares where you went, except if you're a lawyer.

It's what you do with your education after college that will determine your success in life.

You may have posted this once before. What's the best website/organization to get your credit report from all three reporting agencies? I'm registered with but they only give you one for free. Thanks!

The ONLY legit site to get the free credit reports mandated by law is

All others are companies trying to get you to sign up for services. You are entitled to one free credit report from each of the bureaus every 12 months. 

You are not entitled to free credit scores. Those you have to pay for.

We have $12,000in savings, but our house hasn't been painted in 12 years and needs about $6,000 put into it. My spouse is really unhappy with work and is looking around and I don't work. Should we get the exterior painted for $6,000?

Is that $6,000 the cost of just the paint?

If you can and are willing, I would paint the house yourself and save some money, especially in these hard economic times.

We let our two grown children come back home to live. They are doing okay but they aren't being as aggressive as they should be to move out on their home. I want them out. My wife is being very protective and doesn't want to kick them out. What do I do?

You kick them out gently. Tell them that they have 3 months to look for a place. Help them find a place and give them linens and any extra furniture you might have. I'm so sorry that they're on your couch and watching television and not aggressively finding a job. The problem is that kids don't think they have to just work for money. They want careers. But they might just have to work for money first.

The old adage: necessity is the mother of invention, is true. Because your two children don't have to have a job, they won't be as aggressive as they would be if were absolutely necessary. I recommend giving them a time limit: 3 to 6 months, and they have to be out on their own. And, as Gail said, give them furniture and 1st and last months rent to move them along. Protecting them can sometimes be crippling them. Give them the message that you know they can do it and that you expect them to. And, they are more likely to rise to the occasion off the couch.

Can a parent step in and give advice to an adult daughter who is dating and getting serious with a guy who has no ambition and still lives at home?

Here's how you give advice and I have a feeling that it's harder to give advice to a daughter than a son because daughters can screech. Tell her there's something you have to say to her and tell her that you're going to say it once, that she doesn't have to respond. You just want her to hear it. Say it once and then never say it again.

As parents of adult children, we should be respectful of their choices. However, we may have something to offer them and so we should. Be careful not to be critical of either your daughter or her boyfriend. But, suggest to your daughter that she seriously think about what her future will be. Married to a man who has not separated from his parents and has no plans for future support of himself or her. Life is difficult and stressful. Family enmeshment and financial insecurity can stress a marriage. She should consider all these things before she makes a final choice and that you respect her right and her ability to make a good decision. 

My parents started giving me an allowance when I started doing chores around the house--taking out the trash, unloading the dishwasher--around the age of 5. I didn't have anything to spend it on, but my mom would take me to the bank to deposit the $5 every week. I think it was a great learning tool and I highly encourage allowances at an early age, but only if there are chores or something involved.

You see there are a lot of view on this chores for money thing.

Some experts say it's not a good way to teach children because the chores are things they should be doing as part of the household anyway.

Others, like you, think it's a good idea.

Me, I think putting your kid on the payroll at such an early age is not always the best way to teach about money.

It works for some. Not others.

As I said the key isn't the handing over of the money. It's the lessons behind the money. Are you not just showing them how to deposit money but talking about saving for short term wants and needs and long term wants and needs. Do you talk the kid about giving to charity or tithing?

Are you showing him or her who to shop well with the money.

I never got an allowance and now I'm "THE" personal finance columnis for The Washington Post.

I learned how to handle my money by watching my grandmother handle hers.

Whatever you decide to do -- give an allowance or not -- its' the conversations and demonstrations that prove to help a young person become a better steward over his or her money. 

What do you think a single woman's net worth needs to be around age 30 in order to be safely planning for a modest retirement and safety net for a current middle class lifestyle witha current salary of $50,000. No debt, obviously, but looking for some guidance.

I think the first goal you should have is to buy a condo or a house by 30. Instead of thinking all the way to retirement, think of what goals you would have every 5 years. For example, if you do own your own home by 30 and it should have a mortgage that you can afford. By 35 you might set a goal to have a modest portfolio. If you're prudent, by 40, hopefully your portfolio will grow. It seems like you're the type of person who thinks about their financial future. My advice is to do it in small increments and eventually you'll get to retirement.

I suggest that when you get your first job, you get in the habit of saving for retirement, even if it's 200 a month. It should become a habit that first money goes towards retirement. If you start early, by the time you retire, you'll have enough. I agree with Gail about buying property early even if you have to take in a roommate to help pay for the mortgage at first. The sooner you get started organizing your adult financial life and getting into good financial habits, the better. 

My daughter and son-in-law are ready to buy their first home. He works very hard and is very careful with his money--so careful that he's never had a credit card. How long must he have a credit history before they can apply for a mortgage? My daughter has an excellent credit history, but makes much less than he does, so they would not be able to afford even a modest home on her salary alone. Any ideas? Thanks for all that you do!

This is not something you have to actually worry about. Banks today don't give mortgages unless people can afford to pay them. They always want a credit history, so having a credit card and paying it in full is important. Just remember that this is not 5 years ago where anybody could get a mortgage easily. I'm sure you know that a lot of American homes are in foreclosure causing banks not to lend money to people who can't afford to pay it back. So, this is between the children and a lending establishment. Rest easily.

I suggest you advise your daughter and son-in-law to talk to a banker and bring all their financial information. The bank will tell them what they are qualified for and will also tell them if they need to establish a credit history or if they can qualify for a mortgage right away. 

I agree with Susan. Tell the couple to meet with a lender and get suggestions on improving their chanced to get a good mortgage rate. One thing your son-in-law may do is get a secured credit card. Charge something. Pay it off and wait.

Doesn't take long to build a credit history with the scoring models today.

Hi Michelle, I'm in the same boat as the first poster - as in there are some hard decisions to make about our finances and how best to proceed. Do you recommend any particular counseling? I guess there is a fee to sign up for this, right?

Don't have one place to recommend. If you are a church goer start there. Many religious organizations either have the classes or could recommend a program. Or just goggle programs for your local area. But me sure they have a good section on handling your money as a couple.

I had to share this story with you, Michelle. My family of four was on a cruise in the Mediterranean this summer and met another family of five from the US. The other mother bragged a bit about her kids' good grades and her older son's baseball prowess. She said they were hoping he'd get a scholarship offer because while they had saved some money for college, they weren't going to have enough to cover all three kids' expenses. Now, I know that this family had to have spent at least $3,000 per member for this vacation and the cost was probably closer to $4,000. So who spends $15,000-$20,000 on a vacation when they don't have enough money saved for college? Not my family (we are on target for college, with maybe a bit left over for grad school), but evidently some!

I hear you. Such things get to me too.

No common sense, my grandmother would say.

My father-in-law wants the family to rent a house near a lake. The problem is, two (out of three) of his kids really can't afford the $1000 rental fee ($4000 split four ways). My husband suggested that we split it with his father and therefore cover the costs for his siblings. I don't have any problem helping out someone in need, but I don't consider a vacation a "need." Also, one of the siblings is notoriously clueless at managing money (just leased a new Ford Flex). In addition, this sibling sees us as "rich," and while have a more than sufficient income, we have three kids in private school, three headed to college at the same time (twins) and we really, really watch our pennies. I am worried about the message this sends to his sister -- especially since my husband and I will be the only ones able to help our parents out financially should they need it. I guess my feeling is that it's one thing for a parent to pay for his (grown up) kid to go on vacation, but another for a sibling to do it. Am I a vacation cottage scrooge?

You are so right. If you split this with your father, you'll resent your siblings going to this vacation home. It will be annoying seeing them sunning and swimming on your dime. Your father knows the financial situations of his children and if he wants to rent a house, he should do it on his own. You being the most responsible sibling would not only pay for the vacations, you'd probably clean up the kitchen also. Don't do it. It won't be a vacation. It'll be torture.

Right. I agree with Gail. What's interesting to me is that father-in-law has a wish for the family to get together but no financial plan worked out about it. This is between your father-in-law and each of the siblings and is not your responsibility to facilitate. There are some families that assign roles to their children. One is the one who pays. When roles are assigned, we're talking about a dysfunctional family. I recommend that you let your father-in-law suggest the plan and if your siblings turn it down, then the vacation won't take place. 

Ditto. Don't do it. Don't enable people who don't handle their money to sponge off you!

Disagree. The more prestigious the school, the better the contacts in terms of networking. Plus, at better colleges the average student is superior to the average student at lesser schools. I find that after 40+ years people are still impressed with where I earned my B.A.


You are still impressed with where you went to school. Maybe just maybe people are impressed with what you did with that education. It's great you went to a great school but it's crazy to suggest people mire their families in debt just to impress people. Such impressions don't pay the bills.

It is not necessarily true the more expensive the school the better the contacts.

The better the student, the better the contacts.

People please stop pushing this nonsense.

I work at the Post. I went to state school. Others at the Post went to Ivy League.

We all ended up at the Post.


Would be interested to know what your guests think is an appropriate weekly allowance for teenagers and what they should cover out of it (movies, gifts for friend?,etc.)

Young teenagers are driven everywhere and don't have that many personal expenses. Sit down with them and make a list of what they need. For example, if they go to a movie with their friends every week, include the price of the ticket. They should also be able to save a little because this teaches them that saving is important. It's hard to put an exact amount on what a young teenager needs, but once you write the list, you'll know better. When they get older, their needs will be different. So, at 16, you'll update the list and that may include gas for a car and larger expenses. The important thing is to be specific and to have them help you figure out the amount of money they'll need. It's a good life lesson.

This is a good opportunity to teach your child about making a budget and money management. Managing your money is a fundamental principle of independence. As Gail said, ask your child to list all expenses that are solely his expenses. Movies, gifts for friends, slurpees, lunch, etc,. Go over the list with him or her to make sure that the items are not entirely unnecessary. Then decide what the allowance should be. If your child overspends his allowance and is short of money one month, do not bail him out or lend him money. If you do, you will be teaching him how to live on credit. If he can't go to the movies with his friends one month because he overspent, then he will have learned a lesson in money management.

I think it's irresponsible to recommend that all 30 year olds should own real estate. In DC, a 1bedroom apartment starts at $300,000 and shouldn't even be a thought for someone who earns $50,000. What if the person is planning to move in a couple years? This overemphasis on home ownership is part of what got us into the mess we're in in the first place. And to equate owning a home with being an organized, financially responsible adult is just ridiculous.

I'm with you. 

It's a goal that shouldn't have an age attached to it.

Should be based on financial ability at 30 or 50 or 80.

While I think that a Mediterranean cruise is (understatement alert!) kind of pricey, I can understand a family feeling that exposing their children to other lands and cultures when they got off the cruise ship at each stop is a valuable form of education. A child who's never gone anywhere is likelier to have a far more limited view of the world.

Yup, let's keep living above our means for the sake of the kids getting a world view.

I understand where you are coming from. But that kind of vacation is out of your league if you are trying to save for college

That's what you have books and an atlas for.


Hello, due to a layoff we are now making much less than we used to. We sold one of our cars, cancelled what we can cancel, are living very frugally but still have negative cash flow. So I stopped contributing to my retirement account so that we can buy groceries. Hubbie got a new job but it is commission based and will continue to make low salary until commissions pick up. Question: should I start contributing to my retirement plan again and make up the difference in our cash flow with the credit card?


Don't go the credit card way. I would rather you still put off contributing to your retirement than go into debt when your financial situation is still shaky. Debt is not a plan. It's a trap.

I'm mentoring two kids who live in Anacostia. We go on outings sometimes, such as to the zoo. I'd like to work in subtle lessons about managing money (of course, they think I'm rich.) One idea was to pack lunch for the zoo so they can see that we can have a good time without spending $30 on fast food. Any other ideas? I'd like to teach by example and not preach.

You are going just fine. 

Keep taking these real life things and how you save and share it with the kids. Maybe take them to the grocery store with you and show them how you compare prices or maybe buy store brand, etc.

It really is about the examples.

I agree with you Michelle. I used to be head of recruiting for a government agency and I was shocked at the poor resumes and interviewing skills of some Ivy League graduates. The two interviewees that impressed me the most with their stories and motivation were from the local state university.


Thanks for sharing.

To the cruiser who was criticizing the other family going on a cruise. Do you know what they paid for that cruise themselves? Perhaps they belong to some travel club and it was a cheap trip, or perhaps a relative paid. I know a couple who make a modest income, but the grandma treats the family to vacation once every few years because she likes having the whole family together. I'm just saying, sometimes we judge too quickly.



But what if after I talk to daughter she decides to marry the bum and he's still a bum. Do I go to the wedding and eat the cake? Isn't going saying I approve. Isn't allowing her to come around with the guy with no job giving my approval?

There's a difference between your daughter coming around with someone you don't approve of and actually marrying someone you don't approve of. You don't have to hang out with her and a man you don't like. But once she gets married, if you want your daughter in your life, you're going to have to accept him. He may lack ambition, but if he's not an ex-con, or a wife beater, you're going to have to accept him. That doesn't mean you're going to have to pay for the wedding. So, eat the cake. You won't be contributing toward it.

Your daughter already knows you don't approve of her choice. But, grown children have a right to make their own choices including perhaps their own mistakes. We have to learn sometimes by doing and seeing how things turn out. That being said, there's no reason not to go to the wedding and to continue to see your daughter and her husband. We raise our children to be independent of us and we have to accept that they may do things we don't like. However, do not in any way subsidize the marriage. Don't lend them money, don't give your daughter money if she doesn't have enough. She may decide that the bum has qualities she's willing to live with or she may realize the consequences of marrying a bum and get rid of him. If you interfere, she may have to stay with the bum just to be independent of you. If you subsidize, she may not have to feel the restrictions she has taken on.

As my mother always said, you're the one who has to live with him, not me. My mother was always right. 

My husband's sister and her husband have three kids. She works; he has been unemployed for almost three years. They have asked for loans in the past; we have given them. I know the economy is bad (they live in Los Angeles) but is it unreasonable to expect him to do something -- anything -- after three years? By the way, their kids are in private schools, paid for in part with financial aid from the school.

Paid in part?

Which means they pay the other part and he doesn't have a job and you are giving them loans?

Oh you so have to stop.

Maybe if you stop being their financial crutch the guy will get a job, any job.

Stop the loans (although I make it a habit never to lend money only give it).

Sure - it's fine to take your family on an expensive cruise if exposure to world cultures is important, but if you don't have the money for college, you'd better be satisfied with a state school or community college. It's the entitlement thinking that gets to me -- why should the school give someone who has money a scholarship?

More on cruise and college.

When is it okay to stop paying for stuff for your adult children just starting out? Can I still pay for car insurance? What about kicking in to help with health insurance? I want to help but I don't want to stand in her way of being a full grown adult.

The thing that Susan and I always recommend is that if your adult child is just starting out and can't afford health insurance, you pay for that. You don't want to suffer the consequences of not having health insurance. It's an absolute necessity. Car insurance and everything else should be paid by adult children. It's part of their living expenses and as Susan says, money is the currency of adult life.  The second she can stand on her own two feet and pay all their expense will the second she grows up completely.

I think it's a good idea to educate your kids about trying to get a job that provides health insurance. That may not always be possible but they should know that's what they should be looking for. If their job does not provide health insurance, then I agree you should pay it in case of catastrophic illness that may wipe you out. Then, sit down with your child and talk about a plan for when he or she can pay all his or her expenses. They may have to save a little at a time. But, saving for insurance should be part of their budget. You and your child should determine the date when you no longer pay.

I always talked to my son about my money "values". When I sat down to pay my bills I'd explain what I was doing and talk to him about the importance of budgeting and paying bills on time. I explained to him why I thought debt was wrong and the kinds of problems it could cause giving him real world examples. He's 24 now and is very responsible with his finances. I think those money lessons were some of the most important I taught him.

There you go. Talk is not cheap. It's priceless!

My husband's had this MasterCard account since the 80s. Would there be any downside to closing it? We try to use money, otherwise we have a VISA that makes a contribution to my college and we prefer to use that. This Mastercard has an annual fee that we can do without.

If you have no outstanding credit card debt on any one card or all your cards together you can close the older card.

It's very likely the old card and its history will stay on your report. 

I have an adult child who moved back home but now he appears to be just spending his paycheck on having fun and isn't making any moves to move out. What should I do?

If he has a paycheck, he shouldn't have moved back home in the first place. Tell him his paycheck is for living expenses, not for his enjoyment. Tell him he has to move out at the end of the month. You're not helping him to become a full grown adult by subsidizing his living expenses. Once he's out, you and he will have a much better relationship than you do now. It's annoying to see adult children taking advantage. It's your home, not his. 

Your adult child is behaving like an adolescent. He needs some serious counseling on being serious. You might make an appointment for him with a financial advisor who can help him make an adult budget and realize what he can and can't spend money on if he takes on his adult life responsibly. And, as Gail said, give him a date certain for moving out. 

As a young professional who did live with her parents for several months after graduation, I wanted to throw in my two cents. There's been a huge generational shift from leaving college with almost any major and finding a job to almost nothing out there despite grades, major, working experience..etc. So please, parents have some compassion. I felt like such a failure after a job offer fell through post-graduation, and my parents were wonderful. They didn't daily harangue me about the number of cover letters I sent out or job opportunities I found. They didn't ask me to pay rent, forcing me into a low-paying job (if you can afford it, something can actually be worse than nothing in terms of future employment prospects.) Instead, they encouraged me to volunteer, help my grandparents move, talk to people in professional I was interested in, remain active...etc I luckily found another job and moved out, and my parents were integral towards convincing me the sky wasn't falling just because I was unemployed. Sure some need a kick in the pants, but it is really. hard. out. there. And just because there isn't kids, a spouse and a mortgage to worry about doesn't mean my generation isn't depressed and pessimistic about their work options

Love your testimony.


I believe parents should help. And I don't have a problem with an adult child returning home in times of need.

You just have to know when and how to help the adult child get back on his or her financial feet.

Thank you all for joining me today. Special thanks to my guests Gail Parent and Susan Ende.

So sorry if we didn't get to your questions. But check out my print column, weekly e-letter or video chat and you may find your questions answered.

Take care and be financially safe.

In This Chat
Michelle Singletary
Singletary writes the nationally syndicated personal finance column, "The Color of Money," which appears in The Post on Thursday and Sunday. Her award-winning column is also carried in more than 120 newspapers. In her spare time, Singletary is the director of a ministry she founded at her church, in which women and men volunteer to mentor others who are having financial challenges.

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Susan Ende
Susan Ende is the co-author of "How to Raise Your Adult Children: Real-Life Advice for When Your Kids Don’t Want to Grow Up,” this month's Color of Money Book Club selection.
Gail Parent
Gail Parent is the co-author of "How to Raise Your Adult Children: Real-Life Advice for When Your Kids Don’t Want to Grow Up,” this month's Color of Money Book Club selection.
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