Let's Chat

Michelle Singletary
Thursday, December 4, 2008 10:04 AM

So, it's official. We're in a recession.

I bet you didn't need a panel of economists to tell you that.

So how does it make your feel knowing we're officially in a recession? Let's talk about it. Join me at Noon ET to talk about the recession, your holiday shopping issues, and, as always, your personal finances.

When Real Estate Goes Bust

Instead of hitting the mall on Sunday, save some money and watch my new special on TV One "Real Estate Realities: When the Boom Goes Bust," airing on Dec. 14th at Noon ET.

While Wall Street is reeling from bad loans and bad investments, one of the hardest hit demographics in this country has been African-Americans. This special explores how the economic crisis has affected the African-American community.

Click here to find the local channel listing for your area.

Black Friday Turns Ugly

This past weekend marked the beginning of the season for people to lose their minds.

Read my column today about how one man lost his life after being crushed by Wal-Mart bargain shoppers and what this incident says about consumerism in America.

Tragically, the Wal-Mart worker was trampled to death when 2,000 New York customers became impatient for bargains and broke down the doors at the store's 5 a.m. sale. When asked to leave, some customers became angry, shouted and continued shopping.

How low we've sunk when bargain shopping can't even be interrupted by death.

Take a look at the Rev. Susan Brooks Thistlethwaite's commentary on the Wal-Mart tragedy Death by Consumerism.

"This year, 'Black Friday' has come to mean something else to me. Black Friday, I realized today, means death by consumerism," wrote Thistlethwaite, a professor of theology at Chicago Theological Seminary and senior fellow at the Center for American Progress. "The worker's death is a tragedy for his family and friends. It is also symbolic of the truly tragic reality that Americans are hooked on consumption...What the Wal-Mart worker's death revealed to me is that American values are in deep, deep trouble and this bodes very ill for our being able to weather the economic hard times that will, it appears, continue for quite a while."

Read the Women On Faith group discussion "Can We Make Christmas More Sane?"

Despite the recession, people are still shopping reports Ylan Q. Mui in Holiday Weekend Shopping Grew Despite Weak Economy, Reports Show (Dec. 1).

I hope some of the people out there shopping will read my column from Sunday.

Don't guilt shop if you're hurting financially and you have kids. Instead, sit down with your children and discuss why you can't spend this holiday season.

Our Love of Tradition

Shop To It blogger Tania Anderson says that the reason consumers crowd outside stores at the crack of dawn in the blistering cold is because of tradition, discounts and limited supply.

Anderson says, "It's almost like an inside joke that [stores] all take part in. 'Hey, let's tell people to get here at 4 in the morning when it's pitch black and cold as heck. We'll say we're having a sale and see if they come. Hee hee.'"

The long lines of shivering shoppers make you wonder if we truly are in a recession. But Anderson says, "Traditions give us comfort, which is something we need in a shaky economy." Maybe, but at what cost? Get more from We Shop Early for the Love of Tradition (Nov. 28).

Christmas Comes Early

If you're a regifter, I have a gift for you.

As many of you know, every month I select a personal finance book as part of the Color of Money Book Club. I also ask publishers to donate books that I hand out to readers each month. Well, we have some leftover books from the past year or so and I'm giving them all away. With the economy in a recession, this gives you the opportunity to give away something without it costing you a penny.

It will be a grab bag. You won't know what book you'll get. The only catch is you have to promise to give the book you win to someone who could use it -- an aunt, friend, cousin, parent, coworker, etc. For a chance for this holiday book grab, e-mail me at colorofmoney@washpost.com. Please put your full name and mailing address in the e-mail and "Book Giveaway" in the subject line.

Read more about regifting in Give It Again, Sam (Nov. 29, 2007), The Gift of Gratitude (Dec. 24, 2006), and The Do's And Don't of Regifting (Dec. 17, 2006).

If you're looking for gag-gifts, check out Dave Barry's suggestions featured in the Post's 2008 Holiday Guide, a road map for the holidays highlighting gifts, food and entertainment, fashion, holiday events and tips on how to survive the season.

Insights From the Young

For September's Color of Money Book Club pick, I chose The Teen Girl's Gotta-Have-It Guide to Money by Jessica Blatt and Variny Paladino (Watson-Guptill). I asked young girls to send in a 200-word essay on why it's important to save. They were so good I decided to share. Here are excerpts from a few, including one story from a young man:

A'Nisa, Age 13

Chicago, Ill.

"I think that saving money is important because you may need it for something more important later. I personally think that money is a good topic because I always seem to spend money just because it is there. But now, I might be in a certain store and I find some gum. I sometimes would think that I could get the gum cheaper somewhere else. I think that is a very smart way to spend money."

Kai-Yu, age 15

Potomac, Md.

"There is an adage that says: 'Take care of the pence, and the pounds will take care of themselves.' I really agree with that because if I save my change, in a few months, I will have a lot of money. Some people save money because they want to reach their dreams, to enjoy a life in retirement, or even to give it to their children."

Lindsey, age 13

Whitehall, Mich.

"Most kids want to spend money on toys, candy, and stuff, but if you save your money it will be more rewarding in the future. Also, in real life you don't have your parents giving you money for allowance. You have a job and still you might not have enough money so it is nice to have savings backing you up instead of your parents."

Natalie, age 10

Jessup, Md.

"I am a junior Girl Scout and we have a badge in managing money that I plan on earning. Here are a few reasons why I think it is important to save: It is important not to get in the habit of borrowing money for things you want or need. If you save for things you want or need you won't have to pay the bank interest. If borrowing is too easy and you borrow too much you may end up buying things you really can't afford."

Bailey, Age 14

Davidsonville, Md.

"Without money, we can't do anything and having a job and an income isn't enough. We need to save our money. If we don't save, we have no safety net if something happens. If we spend every cent we make at work what happens when we don't have a job or when prices go up or we have to pay for something we weren't expecting? Learning to save now will help teens when they are adults with their own houses and their own families."

Kyle, Age 13

Arlington, Va.

"Saving money is necessary for achieving many goals in life. What I do most of the time is divide the money I earn into two halves. One of the halves is put into my wallet and the other half is put into my bank account. Then I will have some money for spending and some money for saving. Then when I'd like to make a big investment in something I will be able to use some of the money that I have been saving for a while to help me reach my goal."

(Kyle's mother thought this exercise was so important, she encouraged her son to send in an essay. I loved that!)

Asia, Age 18

Charlottesville, Va.

"To stem off arguments about clothing decisions, [my mother] put my twin sister and I on a 'clothing budget' when we were in middle school. We jointly decided an annual clothing budget. Mom then put that, in monthly increments, on our own debit card. I quickly learned how to bargain shop, sew, and save. Saving is important because it gives me freedom and options."

Sarah, Age 12

Shepherdstown, W.V.

The top reasons why I think it is important to save are:

1) To help me tell the difference between my needs and wants

2) To gain interest on my money

3) To save for larger things such as a bicycle

4) Currently I am working to raise money to go to camp next summer

Marissa, Age 17

Warner Robins, Ga.

"I love the idea of a book just for me. Not that boys don't need to be money smart but lets face it, they don't have the fashion demand on every dollar that we girls have. $10 for a hair cut versus $50...not even close. My favorite part of savings...that's easy; it's each month when the bank statement comes and shows the interest & balance in my account. I feel proud of my accomplishment. Once I have my own job, I intend to continue with the tradition, whether it's with the company's 401K or another avenue. It's pay me first so I can pay me later!"

Imagine how much better off some people would be if they had learned what these young people have taken to heart about saving.

You Asked

I started this week's e-letter pointing out what most of us already knew -- that we've been in a recession for a while. I also want to end the e-letter by answering two questions from people worried about the recession from two different points of view. One person participating in my last online discussion is worried about not having enough money to last through the recession. Another person is spending and feels guilty about it given the current economic crisis. So here's what I have to say to both of them:

Q: Although we have a rainy day and a life happens fund, I am kind of panicking and figuring out how to save more money. I am thinking maybe we need to accumulate as much cash as possible. We have a mortgage and a car payment as our only debt. With the recession getting worse, home projects I wanted to get done I am postponing. The more I read and hear, the less I want to spend and I don't buy much of anything now. I think the recession is getting worse partially because people are scared to spend ANY money. Should folks now have as much cash as possible on hand and spend only on essentials?

A: Despite the fact that we are in a recession you can still spend. Just spend wisely. If your job is relatively stable and you have a healthy savings cushion, then go ahead with planned projects if you have saved the cash to pay for them. As long as you are being prudent and keeping your debt to a minimum, you don't have to live in fear.

Q: I have always been a saver and quite frugal. In fact, it's a source of pride for me. My husband and I fully fund our 401(k)s and sock away another $15,000 on top of that for retirement and have six months of living expenses and a substantial "life happens" fund at any time. We also have no debt other than our mortgage. Here's where I need the help: I'm on a spending binge lately! When we bought this house, we agreed to get a hot tub as that was important and calculated that cost into the purchase price of that house. We're getting that done (electrical, getting deck reinforced, etc.) and also planning a much delayed vacation in February to Chile (tickets have already purchased). We've agreed to not buy any Christmas or birthday gifts for each other (hot tub and vacation are our gifts) but I'm still like I want more and am having a difficult time "not" spending. Any suggestions for getting me out of the consumer mindset?

A: Here's the thing, we all can't just barricade ourselves in our homes and only venture out to buy food or pay our utility bills. Life and yes, even spending, still has to go on despite a recession.

If you are saving and you are keeping your debt down, it's okay to spend on the things you've saved up for. It doesn't sound like you're a spendthrift. It sounds like you are living within your means and have some money left for fun. Good for you.

You are welcome to e-mail comments and questions to singletarym@washpost.com. Please include your name and hometown; your comments may be used in a future column or newsletter unless otherwise requested.

Charity Brown contributed to this e-letter.