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Michelle Singletary
Washington Post Personal Finance Columnist
Thursday, November 8, 2007; 12:00 PM

Need advice about how to handle your personal finances? Whether the struggle is saving for retirement, organizing your bank files, talking about money responsibility with your spouse or loved one, Post personal finance columnist Michelle Singletary offers her advice and answers your tough questions.

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A transcript follows.

Read Michelle's latest columns, check out her Color of Money Book Club selection archive or sign up for her weekly e-mail newsletter.

A transcript follows.

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Michelle Singletary: Welcome all. Let's get started.

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Lusby, MD: I hope you answer my question! Michelle 1st of all when are you going to shoot new shows for your program on TVone?

I have a income of around $32k a year. I have a car note with only 14 payments left, thanks to paying more than the regular payment. Two credit cards both with balances one $850.00 the other $250.0. I have about $1k in savings. How do I save more? I also pay rent of $512. It seems I just leave pay check to pay check. What I'm I doing wrong? Oh, I have one child and about 5k of my income is child support. I do contribute to my 401K that balance is about $2k.

Michelle Singletary: Thanks for your question. First, I'll be taping some new specials of "Singletary Says" soon.

Now as for your main question. It does appear things are financially tight. I do hope you are trying to save a little first before paying any addition payments on your car and credit cards.

For now, to boost your savings I would dial back making extra payments on the car. Take that money and build up your savings. Then pay off the credit cards. Then take what you were paying on the cards and put in savings.

And after all that, if you are still living paycheck to paycheck look hard at your budget. Are there places you can cut (insurance, household expenses, etc.).

If you can't cut anymore it's time to think about increasing your income. That might mean getting a second job.

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Washington, D.C.: Michelle, I can't imagine our situation is unique but here goes... My wife and I both have "Good Gub'ment" jobs. We both earn low 6 figures. We have just under half a million in TSP. We have 2 kids in private school and one on the way. Currently 2 Maryland 529's and will start the next one when our new addition arrives. We have a decent mortgage (bought in '98 before the ridiculous home prices), no credit card debt and one auto loan (2 years left). BUT, we spend so much money on all of these things (Tithing (non-negotiable), 15% TSP, private school, etc.) that we don't have a penny saved for a rainy day or life happens. Neither of us appears to be to worried about that, although we know we should start banking some. Something always seems to come up when we try. What do you recommend?

Michelle Singletary: I totally feel you.

You might consider cutting back on retirement savings just a bit to boost your emergency fund and life happens fund (for the things in life that happen such as car repairs,etc.)

Don't cut back so much that you lose your matching dollars but a little to save more.

OR you can go back to your budget and see if there is anything you can cut. Honestly when someone says they can't cut expenses I almost ALWAYS find that they really can. They just can't bare to part with an expense. I agree tithing is not touchable...but what about other areas?

Have you really looked hard?

Now if you have cut to the bone and you can't increase your income, look toward that freed up money when you pay that car off. Take the money you were paying for a car note and immediately begin to bank that. Don't absorb that back into your budget.

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Virginia: Hi Michelle!

Do you ever watch that Larry guy (Big Spender show on A&E)? That is truly amazing how people will exceed their monthly incomes by thousands of dollars. I just can't believe it.

I think you should have a reality show! And how the are the three people who are participating in the Post's feature on helping them get out of debt doing?

washingtonpost.com: 2007 Color of Money Challenge

Michelle Singletary: I've only watched a little of the show. He scares me and yells too much.

But I do have a reality show. It airs on TV One on Saturdays at 9 a.m. Check your cable listings.

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Washington, D.C.: What's your opinion of working with a financial planner? Suze Orman calls them "salesmen in pin-striped suits."

Michelle Singletary: I have a planner.

She just makes sure we are achieving the things we say we want. She also pushes me not to be too conservative with my investments, looks over our portfolios to make sure we are diversified.

And she doesn't wear a pinstriped suit.

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Reston, Va.: Hi, Michelle.

I recently took out a home equity loan, most of which will be used for home improvement, but since the transmission in my car died yesterday, I'm thinking of just writing a check for a new car.

What are the pros and cons of this approach?

Michelle Singletary: Do you mean using home equity for the car?

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Washington, D.C.: Hi Michelle, this question involves inter-cultural marriage and finances. I am married to a wonderful husband who has significant financial obligations to his family in his home country--paying for a sibling's college education, which I totally support, and for basic household expenses for his parents, who are retired with no income and have some health issues. I am currently paying 100% of our household finances (mortgage, utilities, food), while my husband sends a significant portion of his income to his family. I had to pay all these household expenses on my own before I got married (I bought the house before marriage), so for now, that's not a problem. The problem is that my husband continually asks for "loans" of additional money for his or his family's expenses because he hasn't budgeted or planned exactly what he can afford on his salary (he never has enough money to pay me back these funds). He occasionally bounces checks from his checking account or our joint account, regularly incurs overlimit fees on his credit cards and is adding to our debt, to my continual frustration (which I have voiced repeatedly). I feel like I'm always made out to be the bad guy because I want to hang on to my own income for saving and investment (I do have some left over after paying all our bills), while his family has needs. He never wants to talk about money matters because for cultural reasons, he feels humiliated that he cannot provide for me. I know I need to force him to make a budget, so he can see what his expenses add up to. Any other suggestions, so we don't end up in divorce court?

Michelle Singletary: Honestly, you guys might need to see a counselor. There's a lot going on namely you need ground rules for your marriage and your money.

For now, I would try to get him to sit down and you both agree on a set amount -- given all the obligations -- he can send home every month. And that's it. The family will have to find other ways to finance their life.

The problem is you didn't negotiate this before you were married. So it's anything goes now.

But I do think you can resolve this without a divorce but it will take a lot of work.

Also, I would suggest stop this his and mine thing. Pool all the money. Then allocate the funds for your household expenses first -- mortgage, car, food, insurance, savings, retirement investing (for both of you) etc. Then BUDGET for the family money. Make all of this a joint venture.

Perhaps then he will see there isn't enough for him to play hero to everyone while making his wife (his NO. 1 priority) crazy with worry.

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Ogden, Utah: OK Michelle, crunch time: Banks are reporting massive losses from mortgages, stock houses are doing the same, GM just reported a hair-curling loss of $68 a share compared to 29 cents a year ago, the dollar is in the toilet and oil is $100 per gallon. the price of gasoline is rising by the day and/or hour.

I own my house free and clear, have no debt and a 401k and other diversified stock and bond investments that, together, give me a net asset base of 600K. I live 6 miles from work and have unplugged everything possible at home.

Anything else I should do to ride out what, increasingly, looks like fiscal armageddon? rip out the lawn and learn to grow vegetables?

Michelle Singletary: You so funny.

And are are so MUCH better off than the average person.

Don't worry. Keep doing what you are doing and you will be fine.

But growing veggies as a plan B isn't a bad plan.

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Washington, D.C.: Hi Michelle,

My credit card compnay continues to increase my credit limit (just recently, they increased the limit to 30K). Why? I don't charge much, and when I do, I pay it off when the bill comes in.

Would it hurt my credit rating to ask them to lower the limit? No one else uses this card, but somehow, I just don't feel comfortable having a limit this high.

Any advice would be welcome!

Thank you

Michelle Singletary: As long as you don't have an outstanding balance on this card and you don't keep balances on any other cards, you can certainly ask them to lower your limit without any damage to your credit scores.

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Richmond, Va.: Poster with a family income of $200,000 and a decent mortage has go to tell us more. There is no way they can't find money for savings...

Stop eating out. Stop buying stuff. At $200,000plus, you CAN live VERY luxuriously AND save for an unexpected crisis.

Come on!

Michelle Singletary: Interesting.

Do others have a comment.

I wouldn't judge too harshly. That's $200 k before taxes, tithing, retirement savings, college savings, TWO private school tuition bills, etc.

Now I'm not saving they are struggling.

But I do agree that perhaps some cutting of expenses can be achieved.

Just saying they are.

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Baltimore: Re financial planners: The ones to work with aren't salesmen at all, despite what Suze Ormond says. An independent financial planner is an advisor who sells nothing--they often have CPA training and then do further study to get a designation such as ChFC (Chartered Financial Consultant).

By the way, the average person should not look to Ms. Ormond for financial planning advice. She has admitted that she keeps the vast bulk of her money in money market funds and CDs, simply because she is so rich that she doesn't need a big return.

99.9% of us can't afford to have our investment returns simply keep pace with inflation.

Michelle Singletary: You said.

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South Riding, Va: Hi Michelle,

I know that you advocate one joint account for married couples, and we are certainly moving in that direction. One question I have is what about gifts? My husband and I have given each other some expensive things, which if it were coming out of "our" money, I would be uncomfortable with. Since I'm spending "my" money, or he is spending "his" money (from time to time we each get a discretionary lump sum from the joint account), I'm not as worried about it.

Michelle Singletary: I always get this question and still don't understand the whole got to have a separate account for gifts thing.

My husband and I have joint everything and have given each other nice gifts over the years and just took the money out of the joint account. They know what it cost eventually.

No big deal.

I just think some people (maybe not you) use that "gift" thing to still not be accountable or transparent with ALL the money.

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Washington, D.C.: Michelle,

love your column and advice! this is more of a tax-related question, but hopefully you can shed some light. i'm a federal employee and just started working here in june. i've noticed that my state (MD) withholdings from my paycheck practically equal my federal withholdings. MD income tax is 4.75%. When I calculated the amount deducted from my paycheck it's well over 5%. I'm married, but I claimed zero on my state tax form. I've also noticed that the amount being withheld for state taxes is almost equal to the amount being withheld for federal! This doesn't seem correct. Should I bring this to HR's attention? I'd rather have the extra income now, rather than expect a larger return when I file.

Michelle Singletary: I'm afraid I'm just as confused.

So when in doubt, ask. Yes, go straight to the benefit's office and see what is up.

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Arlington, Va.: To Ogden, Utah: Grow your own veggies! Think of all of us who live in condos without enough light to sustain a mint plant. Besides summer garden tomatoes can't be beat!

Michelle Singletary: Okay, if you are saying it's a good idea. Than okay.

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Washington, D.C.: Re the inter-cultural marriage, I think you're underestimating how important taking care of his family back home is to this guy. It's totally understandable coming from someone who hasn't seen it first-hand, but to tell her to tell him that SHE is his #1 priority is likely naive.

Just as I don't "get" tithing but completely respect when someone says it's non-negotiable, I think this lady is looking for a way to deal with this with the understanding that her husband's taking care of his family is non-negotiable.

Michelle Singletary: I do understand. And it's got nothing to do with this guy being non-American. Just ask any American with extended family members they have had to take care of.

Um ME!

Took care of a disabled brother or almost a decade before he died.

I get it my dear.

But he married this woman and SHE is his number one priority whether he likes it or not. So they both have to figure out a way for him to help but not ruin his marriage in the process. If he doesn't get that then he shouldn't have gotten married so he could take care of mama and daddy and sis and whomever.

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Ocean View, Del.: Michelle: when are you going to update the money challenge folks? I can't be the only one who wonders. One another topic, my husband and I have modest incomes but want to start some sort of saving program for our little grandkids (3 wks & 2 year old). Back in the day our parents gave savings bonds. What is the trend today? Thanks

Michelle Singletary: Update on challengers coming soon.

And you should look into a 529 college savings plan.

Go to www.savingforcollege.com for more details.

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Re: Making it on $200,000: We are about in the same boat (and both work for the government), but we bought our house 2 years ago (when prices were higher than for the original poster). We are able to save about $40,000 per year in non-retirement (with retirement fully funded . . .403B and Roth IRA.)

I think the difference is that we don't have kids yet. The poster mentioned that they pay for private school. Do they live in a good school district? Are there other kid-related expenses where they can find savings?

Michelle Singletary: Good questions.

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Houston,: Re: Lowering credit card limit. My husband had the exact same issue. He was always worried that his card would get stolen and somebody would run up the card to the limit. He had to call the cc company several times and even threaten to close the account before they finally lowered the limit. Just be persistent with the card company, they like having high limits, so the customer will spend more!

Michelle Singletary: True that!

But just one note. If the card had been stolen and the charges weren't yours you would not have been liable.

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Anonymous: Hi,

I have $45K in student loans at 5 percent w/10+ years to pay it off, and no other debt (no cc bills, mortgage, car note, etc). By the end of the year I should have enough cash sitting my savings @ 4.2% to pay off the debt.

I'm debating on using the money to pay off the debt (which is why I'm saving it to begin with) or moving it into a long term CD at 5.25 percent.

I'm curious what you would do/did in a similar situation and why that choice makes sense for you.

Thanks!

Michelle Singletary: Pay off the student loans. (As long as you have emergency funds)

The difference in rates (interest on debt vs. interest on CD) isn't worth the worry and burden and bondage.

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Wheaton, Md.: My garden has always been part of my Plan A to live well but frugally. House almost paid for (value: 450K), 8 year old car and portfolio of $800k, big screen TV. More folks should try it.

Michelle Singletary: I used to love the tomatoes my grandmother, Big Mama, grew.

Miss them.

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Cambridge, Mass.: Hi Michelle,

Thank you for your columns and these chats --they are a great reminder of how important it is to make smart financial decisions!

I am hoping you can point me in the direction of some sound resources for the what happens when an account on a credit report is disputed. I recently found out that a family member opened a low-limit credit card ($400)in my name in 2000 and did not pay it off until the account was settled with creditors in 2003. While I'd very much like to have this account removed from my record, I am concerned about what the consequences would be to the family member. My credit score is in the low 700s, and I have no plans of applying for any loans or credit in the next couple of years. I've never made a late payment, and my score should go up as I lengthen my history and pay off my student loans. It's my understanding that this account will eventually drop off my record, so I'm considering not disputing it, if doing so would be a great hardship on my family. Ideally, it would be great if it could be removed from my record, but not attributed to someone else, but I don't know how the dispute process works. Do you know where I can find the best information?

Michelle Singletary: So why don't you want to turn in the relative by disputing the charge?

That person certainly did not have concern for you by lying and using your information to get the card?

Perhaps they should be punished so that he or she doesn't ever do it again.

Sometimes we do more harm to relatives by not making them face their unjust deeds. It's the price he or she pays for being dishonest.

Now if the person has apologized and sees the error of his or her way and you want to maintain the relationship, keep quiet.

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Washington, D.C.: I have a question on financial priorities. In January, I will receive a nice raise. We could use my raise to either beef up our emergency fund, or start paying down our piggyback mortgage. We already save 10% for retirement and have no non mortgage debt. We also save a modest amount for our children's college fund.

We bought a house at the height of the housing boom using 100% financing. Our interest only 5 year ARM will reset in 2011. Should we really start tackling mortgage principal, or make sure we have 6 months of living exspenses. (Right now we have 2 months).

Thanks!

Michelle Singletary: Here's the order I would use the raise:

-- First beef up the emergency fund. Once that's done

-- Tackle the second mortgage

-- Then use the raise to beef up the college fund

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Alexandria: Not sure if this is a question more for Carolyn Hax or for you, as it involves money and relationships.

I'm female, in my early 30's, work for a non-profit organization and make a low salary for this area. I keep my expenses low and get by. However, so many of my friends work for government or other employers and have a much higher income than I do. When I date, on the one hand I feel uncomfortable if my date pays for everything, on the other I feel like I can't hold my own if we want to do anything at all that involves spending money. Help! Do I need to increase my income or increase feeling comfortable if other people (the guys I date) subsidize most of my entertainment costs?

Michelle Singletary: Maybe both.

Look for ways to increase your income just because you may have to to save more for emergencies, retirement, home, etc.

But also feel comfortable being able to afford what you can afford. That means finding things to do with your date that doesn't cost a lot. Does it mean you can't do some things.

Yup!

That's life.

And trust me the day you find the right person who appreciates your living within your means, keep him.

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Lusby, Md.: It's me again..regarding living pay check to pay check. How does one save by increasing your income? In this economy will a few thousand more a year really make a difference when gas is $3 dollars a gallon and milk is $5 dollar.

Michelle Singletary: Every bit helps, really.

Now if you aren't getting by you may have to get another job or get a different job.

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Gifts: It's not about whether one or the other of us will know how much the gift cost. It is about feeling entitled to give/take a gift that takes a large chunk out of our account.

Michelle Singletary: So set a budget for gifts. Then you can take or give without any problems.

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Re: That's $200 k before taxes, tithing, retirement savings, college savings, TWO private school tuition bills, etc. : A lot from THAT list is EXTRA, not necessary. Tithing, private schools, are both personal lifestyle luxuries, not necessities.

Maybe the 1st poster who is saving more on $42,000 has some advice for the poor little rich family.

Michelle Singletary: Man, some of you are mean today.

"poor little rich family."

Not nice.

They are looking for help for what they have.

And for some people (like me) tithing isn't an extra.

This family is achieving and doing just what we are told we can do in America. Are they making all the right decisions?

Maybe not. That's why I do what I do.

So again, whatever you earn, you have to live below your means, save, and budget.

If you make less the job is that much harder and my heart goes out to you.

If you make more, you definitely need to watch for overspending because you can. But the day may come when you regret living above your means. So plan for the worst and hope and pray for the best by -- savings, budgeting and living below your means.

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I'm still here (200k family): I was trying to get some advice and not take up too much space and time in the chat. Of course there's more to it. We're a family who has other family in need that we help out periodically. We pay our kids' school tuition upfront which saves us some money during the year. We've done some home improvements which probably could have waited. We also were mistakingly loaning the government our tax money by having zero (0) W-2 exemptions and getting a big check back every year at tax time. We have changed that and we will begin the belt tightening on extras as well. Until we began reading your work, we never really thought we had any problems with our money management. We are by no means struggling either. I think we just need to manage our finances better which is the advice we really were seeking and I believe we have received. Thanks Michelle.

Michelle Singletary: See, I knew it.

Forget the mean people.

You are trying. So you just need to try harder. Watch the expenses. That's what happens to folks who make a lot. They aren't struggling so they over reached (like doing the home repairs before you could afford it.)

I get you. Just keep reading my columns and e-letter (and books). Listen to me on XM every Sunday from 8 to 10 p.m. (EST) and you will be just fine.

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Washington, D.C: You often suggest people get a second job. I have two part-time jobs and a full-time job. I have humongous debt thanks to medical bills from my parents who were terminally ill prior to their deaths four and five years ago. I am working through the debt but it gets discouraging. My raise this year was 1/2 of 1 % and I only got that because I requested it and pointed out all I had done. I do not know what I can cut, since I bring my lunch to work, never eat out or see movies, haven't bought shoes since 2002. Any suggestions? I make $56k a year and rent a studio apartment.

Michelle Singletary: I'm so sorry to hear about your parents. But why are you paying debts belonging to your parents?

Did you co-sign for the debt?

If not you are not obligated to pay their medical bills.

And you certainly are working hard. Perhaps if the debt is really yours you can go back to the creditors and work out a different plan that gives you some breathing room.

If that doesn't work, maybe you can move in with family or a friend until you get the debt taken care of.

I wish I could offer more. I know it's tough.

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Alexandria, Va.: Michelle,

I love your chats. They are so helpful for a recent grad trying to make ends meet. So, I have one credit card that I got right out of college with a 0% interest rate for the first year. Well, I basically had to live off the card my first year of graduate school, and am now pretty close to the limit ($6000). The 0% interest rate is over, but I am finally in a position to start paying the card down. Suze Orman says to call and ask for the interest to be reduced to 0 again, and if they won't find a card that has no interest on balance transfers and switch your balance over. Does this really work?

Michelle Singletary: It can work. If you've been paying the card on time and you have good credit you can try calling or transfer the balance to another card with a promotional offer.

BUT

Please put it away. Don't charge another penny on any card.

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Arlington: Great columns and chats. Is it ever ok not to save "for a rainy day?" Husband & I are in our 50s with household income of almost $100,000; no debt except mortgage. Current savings would cover 6 months; $25,000/year goes into retirement (one 403-b, 2 Roths, 1 SEP); $20,000 on 2 kids in college. Besides the retirement savings, we're not putting anything else away. Can we let this ride for these last two years of college costs or should we cut back on retirement?

Michelle Singletary: Sure you can. You seem to be covered.

Breath!

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Living pay check to pay check: Try splitting big stuff from Costco with a neighbor. CARPOOL and cut that commuting bill in half. Ditch the cell phone and cable. Don't eat out. Make food from scratch instead of so much processed stuff. No more sodas or fancy coffees. No lunches out, brown bag it. Only one pair of new shoes a year.

Michelle Singletary: Rough but some good tips.

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Ogden, Utah: Michelle, me again -- my tomatoes this year were a dismal failure. I want you to know that you are one of my financial heros. As a newspaper columnist in Utah (ogden, standard-examiner) I do occasional columns on financial situations and you are a wonderful resource. Your Big Mama and my mother could have written the book -- Mom was brought up during the Depression and her description of watching her mother balancing the family books, and her father sitting on the phone daily looking for work, have stuck with me.

Sad to say, those days could return again and all the people who are overextended, who think "living tight" means not eating out and selling the second home, are going to have a hard landing indeed.

Thanks, just wanted to throw some good juju your way.

Michelle Singletary: Love juju.

Thanks so much!

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Roth on 200K: Michelle - I don't see how previous married poster can fund a Roth IRA. I thought they were only available to couples with an AGI below 150K. I'd love to contribute to a Roth but don't qualify. Have the rules changed?

Thanks!

Michelle Singletary: I must have missed that. You are right there are income limits.

Perhaps they contributed until they maxed out.

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Springfield: Michelle,

This sounds really whiny...but why am I going to be in financial trouble when it's OTHER people going into foreclosure? Our family is pretty conservative, money-wise-we don't have a lot of "stuff", we hardly ever take vacations, we have two old cars, etc. I guess I just don't know much about how banking works. I can afford MY monthly house payments...so why should I be worried when other people can't (other than from a purely humanitarian perspective)?

Michelle Singletary: If you aren't moving anything soon, you don't have to be worried about how other people are having trouble paying their mortgage.

It does affect you if there are lots of foreclosures where you live and you want to sell. Brings the value of your property down.

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Stretched on $200,000: We aren't that high in our income, mainly because I work at a university, but we still have an income far above what I ever considered middle-income. Yet, after taxes, maxed out 401(k)/403(b) contributions, mortgage, cars, and child care, there is remarkably little left. We don't eat out often, we have a moderate home (though we bought right before things tanked, so it wasn't cheap) and cars.

Michelle Singletary: Another view from the top.

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Hi Michelle:: I recently took out a home equity loan, most of which will be used for home improvement, but since the transmission in my car died yesterday, I'm thinking of just writing a check for a new car.

What are the pros and cons of this approach?

washingtonpost.com: Loan Loser: Home-Financing a Car (Post, March 18, 2007)

Michelle Singletary: You the link to this question to answer the question of whether you should use your home equity to buy a car.

I wouldn't do it.

Now if you meant you have extra money and should you buy a car. I would fix the transmission and pay off the home equity loan or as much of it as I could.

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Alexandria, Va.: Hi Michelle - I know you have probably answered this a dozen times, but can you explain when one is responsible for others debt in death and when he/she is not? Does it depend on relationship, ie spouse or parent? Or type of debt? I'm so foggy on this issue and think it is important because I have heard that creditors will get you to pay if they know they can, sounding like it is obligatory when it is not necessarily. Thanks for your help.

Michelle Singletary: Good question. And I don't mind answering it 100 times.

Folks you are not responsible for the debt of relatives -- mama, daddy, sis, brother, Peaches and them -- if you DID NOT CO-SIGN for the debt.

So unless when the relative checked into the hospital or nursing home or whatever, you signed some paperwork saying you would pay the bill, you are not responsible.

Same with a mortgage, credit card, car loan. Unless you are on the note you don't have to pay it.

Now creditors will try to get you to pay it. They did when my brother died. But I simply sent them his death certificate. They could call all they wanted but I wasn't paying. The calls stop after I informed them he had passed away.

Of course if the person has an estate (money, value in the home, car, etc.) the estate has to pay the debts with whatever money is there or left. Or the assets have to be sold to take care of the debts.

But don't let a creditor guilt you into paying the debts of a deceased loved one.

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Auburn, Wash.: Hi Michelle,

I hope all your readers take note of what Ogden was saying. We are in the beginning of a period of high inflation which means every dollar buys less. Remember the 1970's oil crisis and stagflation? Those problems are going to return with a vengeance (they have already started, IMHO). I hope your readers adopt the principles of ELP (Economize, Localize, and Produce). Economize -- get used to living below your means; Localize -- buy local whenever you can and drive your car less; Produce -- make your own (grow that garden, develop handy skills to fix or repair your things rather than hire someone else or buy replacements, etc.). Those who follow ELP will be able to ride out what is going to be a very difficult and dark future over the next several years much better than our overspending, undersaving neighbors.

Michelle Singletary: Wow. Love this.

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Streched on $200K: Didn't mark fisher just do an article on this? Scraping By on $200,000? The Tricky Task of Establishing the Line Where Wealth Begins.

Michelle Singletary: He did. Interesting read.

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Atlanta: Hi Michelle. Very quick question. My hubby wants to buy a Sunday-go-to-church car. We have 2 perfectly running paid-for cars now. We have enough to put about $25k down on a luxury car and carry a $500 p/mos car payment for however long. Please tell him why we should go used and not new! He is reading the blog and your support will help me tremendously. Thanks

Michelle Singletary: Tell you hubby for me he's a knucklehead!

This is especially so since you would put down $25,000 and still carry a note.

Are you kidding me?

You are kidding me, right?

He wants to pay for a car just to drive to church when you have TWO paid for cars.

Now if you had said we are flushed with cash, got all the money we need for retirement, give to charity, no mortgage, no credit card debt, and can pay ALL cash for the car.

I would have said go for it. You got it like that.

You don't got it like that.

You don't don't NEED to go new or used.

Why don't you use that money to bless a family that doesn't have a car?

_______________________

Re: Medical expense: It may be the person ran up debt paying for the sick person's living expenses or for paying for things that insurance didn't cover. Say, they charged the person's deductibles or paid for their medication.

Can add up to a lot of debt in a hurry.

Michelle Singletary: It may be.

Not sure. Just covering the bases in case that isn't the case.

_______________________

Bowie, Md.: Hello Michelle,

I have 1 car payment left and 4yrs left on my mortgage. About $3,000 in credit card debt. But, very little savings. I know I should focus on eliminating the credit card debt first. What do you think about doubling up on the mortgage in order to payoff sooner?

Thanks

Michelle Singletary: I think you should double up on the savings first.

_______________________

Hyattsville, Md.: How much do we need for emergency/life happens fund? We recently boosted our emergency fund to $19K - we have stable jobs (government) and monthly expenses are $3500. We keep our money in an internet savings account with 5% interest. We contribute 10% of our paycheck to our TSP.

Michelle Singletary: Emergency should be at a minimum three months of living expenses.

Life happens: Depends on what expenses you might have that could run up. Do you have an older car? Then you might want to have a good amount stashed to pay for a major car repair. If not probably $500 to $1,000 would be okay. See what I mean?

_______________________

M Street NW, Washington, D.C.: Michelle, I love the irony:

Watch the expenses....Listen to me on XM every Sunday from 8 to 10 p.m. (EST) and you will be just fine.

Wouldn't XM be one of those expenses that should be watched?

Michelle Singletary: It would be. And if you can't afford to get it, don't.

I didn't say buy it if you can't afford it.

Same with cable. I've told people to drop cable or cut back to basic (my television show is on premium side).

So if you can't afford XM or cable you certainly can get enough of me through my columns and e-letter and chats, which you can get for FREE on the Web.

Think you caught me, didn't you?

NOT.

I'm true to my word. I live what I preach.

So there!

_______________________

Marc Fisher just said on his chat: "It's just hard for me to swallow complaints about money from anyone making several times the national average income."

That's where I'm coming from. Not mean, but honest about what most families thrive with and how $200,000 IS several times the national average income. That's just facts. $200,000 is far far wealthier than most families. There is no struggle for necessities. People earning 1/4 that make ends meet, so can you.

Michelle Singletary: I'm not on Fisher's chat so don't know the context but in THIS CHAT, the person wasn't complaining I didn't think.

He or she was asking for help.

They didn't say poor little me. They said we make a lot and can't seem to understand why we aren't saving more.

I'm an equal opportunity personal finance advice giver.

I've been on both sides of the street (poor and well-off).

I get both sides. I give advice to both sides.

_______________________

Go get 'em, Michelle: I hope you'll be typing with us for a long time........

Michelle Singletary: Me too!

_______________________

RE: the $200K family: I'm with you, Michelle. Yes, maybe they should shop more at Shoppers Food Warehouse instead of Whole Foods, but that family is also not going to get a single penny of help to pay for college. They're probably not getting much help to pay for private school, either. Maybe the public schools in their area are terrible. They could move to a better district, but that might involve increasing the size of the mortgage.

It's families making in the low $100Ks who are going to get squeezed. Poorer families will get need-based aid, and richer families just write a check from their yacht.

Michelle Singletary: I'm with you except for the comment about poor families.

The need-based aid ain't that great. There are lots of kids all along the economic ladder who can't afford to go to school.

_______________________

Hoping to get in under the wire: Hi Michelle,

I just asked my boss for a raise. I found that another person (man) who was hired here to help me lasted for two months and then let go made 30K more than I do. (He had 1/2 of my work load, now that he's gone, I have it all again).

My boss is furious with me for asking, thought I know I'm being undervalued. She won't speak to me. Did I sacrifice a relationship for a pay increase that I shouldn't have?

Thank you

Michelle Singletary: You did get in under the wire but I've got to go after this one.

You did the right thing. You stood up for yourself. And a boss that is insulted that an employee would ask to be pay a fair wage based on their work is a punk!

Start looking for another job in another department or with another employer.

Now if you don't want to do that, try having another conversation calming explaining why you think you deserve more.

Is she is still acting like a punk, perhaps its time to go over her head.

If that doesn' work as I said may be a sign you need to go some place where you are valued.

_______________________

Michelle Singletary: I could go on for another HOUR. Questions still coming in. Snipes still coming in. Good debate coming.

But I have to write my Sunday column. But I will return for another round.

Seriously, thanks to you all (even those I called mean) for joining me today. It's good to have a hearty, healthy debate about this stuff. It's a better use of our time than talking about crazy celebrities.

Thanks again. Come back.

_______________________

Editor's Note: washingtonpost.com moderators retain editorial control over Discussions and choose the most relevant questions for guests and hosts; guests and hosts can decline to answer questions. washingtonpost.com is not responsible for any content posted by third parties.


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