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Personal Finance: Almighty Debt

Michelle Singletary
Thursday, October 21, 2010; 11:14 AM

In an economy where there aren't enough jobs and families are struggling to pay their bills, can churches help people pray away their debt?

The Rev. DeForest Soaries Jr., the senior pastor of First Baptist Church of Lincoln Gardens in Somerset, N.J., believes it takes prayer, individual responsibility and personal action to go from being a slave to debt to financial freedom. And this pastor, like so many others around the country, is using his pulpit to lead people to debt-free living. At his church, Soaries created the "D-Free" program to encourage his congregation to become debt defeaters. The "D" in the program stands for debts, delinquencies and deficits.

What Soaries is doing for his flock caught the attention of CNN. He is the central figure in the cable network's latest installment in its Black in America series. Tonight at 9 p.m., CNN will premiere "Almighty Debt: A Black in America Special," hosted by Soledad O'Brien. Following the documentary is a panel discussion that starts at 10:30 p.m. I took part in this can't-miss conversation with the well-known and wonderful Bishop T.D. Jakes; Terri Williams, author of "Black Pain: It Just Looks Like We're Not Hurting;" and Cornell Belcher, a top Democratic pollster.

In an interview with the Huffington Post, CNN's O'Brien says "When Pastor Soaries says debt is worse than slavery, that debt is a kind of bondage, [others I talked to] would nod and say, 'yep. I feel like I'm in bondage because I can't pay my mortgage.' So as much as I think he was being provocative and a little bit over the top, I think he also believes that racism is something that is external to you and that debt is something that you can manage all on your own."

Here's a clip of the documentary, which explores the difference between income and wealth.

"You can be middle class by income, but not by wealth," Julianne Malveaux, an economist and president of Bennett College tells O'Brien in the documentary. "If you're middle class by income, anything will knock you over. If you're middle class by wealth you can basically survive a couple of storms."

Although O'Brien focuses on the black church, the message should resonate with all Americans. We have become a nation of debtors and one way many are people trying to kick the habit is by turning to programs offered by or at their churches. I know my own church, First Baptist Church of Glenarden in Maryland, has provided financial classes for years that have helped hundreds of people get out of debt and become better money managers.

I know there is a lot competing for your attention, but I hope you find time to watch this documentary. You may see yourself in the stories of people struggling with their almighty debt. You may, I hope, be motivated to make some changes in how you handle your finances.

You can find several preview clips of the show on CNN's Web site.

After you watch, tell me what you think. Send your comments to colorofmoney@washpost.com. In the subject line, put "Almighty Debt."

Young, Gifted, and Not In Debt

I'm a huge fan of Ralph Jones Jr.

It's not likely you've heard of this young man, but he could teach a lot of adults a thing or two about financial decision making. This 16-year-old caused quite an Internet stir after he decided to turn down Harvard and other brand-name and Ivy League schools to attend Florida A&M University, a historically black college.

A big part of the reason why Jones decided not to attend Harvard or the other schools that accepted him was money--or his lack thereof. Florida A&M offered the pre-engineering major a full scholarship. Harvard did not. Jones told Lauren Williams, associate editor of Theroot.com, that people sent him text messages criticizing him for his decision.

"Some of the stuff people were saying was like, 'For someone so smart, he's so dumb,'" Jones told Williams.

Jones did what so many of his college peers fail to do. He carefully considered all the issues and costs associated with attending a certain college. As Williams reports, the teen thought about the proximity of the school to his parents. His parents have already had to drive down to his school twice from Atlanta to sign forms for him because of his age, according to Williams.

But most importantly, Jones wanted to go to college without incurring any debt. Williams writes that Harvard and Stanford offered Jones some money but not a full scholarship. Georgia Tech, his No. 1 choice, did not offer a full scholarship.

I've seen how many young people and their parents choose a college. Many don't do even a fraction of the long-term planning Jones did. They just load up on loans without really knowing how the money can be repaid. I've seen students turn down full scholarships at schools that offer their desired major just so they could go to a brand-name school, despite the fact that they will graduate with a great amount of debt.

Jones is indeed a smart young man.

For this week's Color of Money Question I want to know, "Would have you encouraged your kid to do the same thing as Ralph Jones Jr.?" Send your response to colorofmoney@washpost.com and put "Young, Gifted, and Not in Debt" in the subject line.

There's No Place Like Home

Scarce unemployment opportunities are driving many recent college graduates back home, according to a poll by Twentysomething Inc., a marketing and research firm. As unemployment has reached 15 percent for young adults ages 20 to 24, many recent graduates can't afford to live on their own, reports CNN staff writer Jessica Dickler.

"There's almost an expectation that kids will move back," says David Morrison, managing director and founder of Twentysomething. "There is no stigma attached."

Fortunately for class of 2011 graduates, a study by the National Association of Colleges and Employers shows employers are expected to hire 13.5 percent more grads than the class of 2010.

You Work Here?

Federal workers have long had to endure jokes that they don't work hard. And a new poll found that sentiment hasn't changed. In a Washington Post poll, more than half of Americans say they think that federal workers are overpaid for the work they do. More than a third of the respondents said federal workers are less qualified than those working in the private sector.

"The strong sentiments give ammunition to both defenders and critics of the country's 1.9 million-member federal workforce in what has become a bitter debate on Capitol Hill and on the campaign trail over the size and value of the federal bureaucracy," write Post reporters Lisa Rein and Ed O'Keefe.

I don't doubt there are many federal workers who need to give up their desk for an unemployed person who will work hard and earn their pay. But I also know there are many federal employees who work hard and do a great job. In the interest of full disclosure, my husband works for the federal government and he's a highly qualified manager, who often brings home work or works late to get his job done. (Hey boo!)

But do you recall when major parts of the federal government were shut down in 1995 because a budget bill wasn't passed? It became a showdown between then-President Bill Clinton and Speaker of the House Newt Gingrich. A lot of people realized then the importance of the work federal employees do.

Although he clearly has a bias, I agree with what John Gage, president of the American Federation of Government Employees, told the Post.

". . . This whole idea of 'I know somebody who doesn't work hard' - well, get the hell out of here," he said. "Honest to God, you can say the same thing in any industry."

I know I can say that about a lot of private sector workers.

Responses to "Thin Is In"

For last week's Color of Money Question, I wanted to know, "Have you experienced pay discrimination because of weight?"

The question was prompted by a Wall Street Journal report about researchers who found that women who were thin earn higher salaries. On the other hand, heavier men were rewarded with higher income.

"Prior to the surgery, I felt invisible and was not provided opportunities for advancement, even when I asked for them," says a reader from Washington, D.C., who asked not to be identified. The reader lost 100 pounds in the past two years as a result of lap-band surgery.

She continues: "Since losing the weight, I've been offered opportunities that I never thought I would. I haven't gained more education or training; my abilities are the same as before losing weight. I'm not sure that being overweight was the cause of the lack of opportunities or if the self-confidence I gained with the weight loss made me more vocal about speaking up for what I needed for my career."

Jean O'Neil of West Hatfield, Ma. says, "Perhaps the women who weigh less and make more money have more energy to apply to their jobs. They may be hyper, more driven, care about eating less. Perhaps it is not always discrimination towards the overweight women."

Karen Thomas of Alameda, Calif. has seen weight discrimination in her workplace. "I've personally seen thinner females receiving larger awards, better performance ratings, more promotions and overall greater benefits than their average-weight and overweight counterparts, even when the average weight counterparts were performing above the thinner females. It appears to be more prevalent when a male is supervising females."

Upcoming events

--Thursday, November 4: I will be facilitating the Money Madness session at the Essence Women's Conference located in New York City at the Marriott Marquis. For registration and ticket information, go to www.essence.com/ewc.

Tia Lewis contributed to this e-letter.

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.

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