Personal Finance: Financial Advice from a Legend

Michelle Singletary
Thursday, September 24, 2009; 10:34 AM

Founder of Vanguard Group, John C. Bogle, will be my web chat guest tomorrow at noon ET. (Please note it's a day later than the usual Thursday chats.)

Bogle is the author of "Enough: True Measures of Money, Business and Life," September's Color of Money Book Club pick.

In the book, he reminds us that there are ramifications for an economy that is too driven by the financial industry. What happens under those circumstances? Well, people get in debt up to their eyeballs.

Chat starts at Noon ET. Don't miss out on Bogle's advice. Submit a question now and tune in to the discussion.

Student Loan Sinkhole

Sunday's column on the student loan crisis elicited quite a bit of feedback.

Any time I broach this topic, there is a heated debate.

There's the side that thinks those weighed down with huge student loans should just stop complaining and pay their debts. Others - usually those weighed down with loans - argue they borrowed out of necessity only to find the debt too overwhelming.

Susan Beacham of Lake Bluff, Ill. wrote: "Community college is affordable for all. As a high school senior, you can continue to live at home and work during the day and attend classes at night. Ideal - maybe not - affordable - yes, I think so."

"Debt is a choice," says Beacham, "and these kids have made that choice and some without any regard for the consequences of that choice."

Beacham created Money Savvy Generation, a company committed to teaching kids about money. Their products have been featured as part of the Color of Money Book Club.

Kathy Kleine of San Juan Capistrano, Calif., says "I laughed when I read your column especially calling those who chose student loans, signed for student loans, and then can't or won't pay them back 'victims.' My husband had three loans and I had two loans and it was hard I will admit, but we never thought about defaulting because it was our responsibility to pay back what we borrowed. Yes, we were poor, ate Mac and cheese, went to year old movies if we could afford it, and never went out to dinner but we paid back our loans."

For the record, I did not nor have I ever called people strangling with student loan debt "victims." That's the term used on

Nonetheless, here is a testimony from one mother about her son's student loan sinkhole.

"My son got his business degree in the field of his passion, music," says Judith Mathison of Ventura, Calif. "Since the economy tanked, he's been existing on part-time work, unemployment and occasional real estate leasing listings. He's explained this to Sallie Mae but they're determined to get $750 a month from him (interest only) or up to $1,000. I'm hoping that the government offers some help to people like my son (and me, 58, still paying on my loans) who are being crushed by the economy."

Here's the Color of Money Question of the Week: Is it worth going into decades of debt to attend college? Please send comments to with your full name, city and state. Put "Student Loan Sinkhole" in the subject line.

Celebrity Cash

Did you see the fight this weekend?

Floyd Mayweather Jr. pummeled Juan Manuel Marquez. But Mayweather couldn't fight off the IRS.

Uncle Sam was threatening to take the money from Mayweather's $10 million fight purse. Nevada Athletic Commission Executive Director Keith Kizer said he received a levy notice ordering a deduction of $6.17 million to pay for Mayweather's unpaid taxes from 2007.

According to news reports, Mayweather has had tax trouble before. The IRS filed liens totaling nearly $6.3 million for unpaid taxes from 2001, 2003, 2005 and 2006.

One would think with so much money and often so many advisers that celebrities wouldn't get into tax trouble. And yet we continue to see stories like this: Mayweather Agrees to Pay $5.6M Back Taxes to IRS.

Low Prices in Aisle One

Let's get ready to rumble!

The recession has hit hard and now supermarkets are fighting for penny-pinching customers.

Grocery stores used to boast about their upscale d├ęcor and amenities such as fancy olive bars and imported cheeses. Wal-Mart even opened a test store in Texas that sold wine for more than $500. Now, it's all about low prices.

Read Post reporter Ylan Q. Mui's story, A Silver Lining in Grocery Aisles (Sept. 17).

Same Old Money, New Mindset

Here's another good thing about the economic downturn. More people are eager to manage their money better. The personal savings rate rose to more than four percent in July.

"There's a quiet revolution taking place in the way people save, borrow and spend that represents a retreat from old habits, and the first steps toward new ones" writes AP reporters Candice Choi and Eileeen AJ Connelly. For more on how you can save read Meltdown Gives Consumers A New Money Mindset (Sept. 22).

Charity Brown contributed to this e-letter.

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

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