washingtonpost.com
Color of Money Book Club

Michelle Singletary
Washington Post Columnist
Thursday, March 20, 2008 12:00 PM

Personal finance columnist Michelle Singletary hosted an online discussion with Stuart Vyse, author of "Going Broke: Why Americans Can't Hold On to Their Money" (Oxford University Press), on Thursday, March 20 at Noon ET.

In her column from March 2, Michelle wrote that Vyse explores the history of lending in America, the invention of the shopping cart, the evolution of self-service discount shopping, and the explosion of branding and advertising.

The transcript follows.

Read Michelle's past Color of Money columns.

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Michelle Singletary: Welcome all. I know this will be a very interesting chat, just by my e-mail so far this morning on my column today about weddings.

So let's get started.

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New York, N.Y.: This is just a comment about big weddings. It's a shame the focus is on the BIG day rather than the lifetime of marriage that follows. No marriage is without its ups-and-downs and going through a down while saddled with tens of thousands of dollars of debt after the wedding is a guarantee for stress. My husband and I were students when we married so we had no choice but to go with a small ceremony. I look back fondly on that day but even more fondly on other days in our married life since then. It's not an unimportant day but it's only one day. Thanks for your columns and chats.

Michelle Singletary: Oh, I so agree.

Of course many others don't -- those with this mixed up notion that spending $30,000 on a wedding when they have massive amount of student loan debt is okay.

Crazy!

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Washington D.C.: Michelle, I'm freaking out about all my investments going down! I am 24-years-old and have skimped and saved to be able to max out my Roth IRA this year ($4,000!). Now all I see is dwindling...I've lost almost 10% of its value since I put it in!! My gut reaction is to pull it all out and put it in my bank account where I could see it, but the logical side of me tells me to ride this all out. Advice? Words of Encouragement?

Michelle Singletary: First, you have time on your hand so don't panic. If you sell now you lock in your losses.

Having said that, just go back and look at your choices. Are they balanced? Are you putting money in a variety of asset classes (large cap, mid cap, small cap, international, bonds, etc.). If so be calm. Trust that you have allocated your money wisely.

But this is also a good time to remember that you need to save money too -- emergency fund and life happens fund.

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Laurel: Mr. Vyse, A couple of years ago, Michelle's BotM was "The Two-Income Trap" by mother-daughter Warren & Tyagi. Their thesis was that the most important predictor of eventual bankruptcy (at least for a woman) was having children. Severe financial hardship, in their view, didn't come from shopaholism or easy credit, but from the relatively fixed costs of family formation, like: health insurance, college, two vehicles (one an SUV or minivan) and competitive bidding for the limited number of houses in good school districts and job markets.There may be some Suze Ormans, who waste their money on fancy dinners until they straighten out. But isn't most financial hardship the high cost of kids?

Stuart Vyse: Yes, kids are expensive, but Warren and Tyagi also suggested that because kids are expensive, both parents generally go into the workforce, making the family vulnerable to any kind of shock. Loss of either person's job can cause a big problem. But there are plenty of people without children who are also in debt and having difficulties.

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Richmond, Va.: My name is Clarissa and my class is now online for the book discussion. We are a class of 7th/8th graders and we are studying economics. Unfortunately, they have not read the book yet due to spring break. However,I have given them an outline of the book. We are excited to be a part of this discussion.

Michelle Singletary: Welcome. I love it that you are having your class join us. It's so important to start early to teach young people about money.

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Scarborough Maine: Do you think past generations had more discipline then we do now or simply less opportunities to get into debt, or both? Signed Mike

Stuart Vyse: Mike, I think it is mostly the greater temptations we face today. Earlier generations did not have to contend with internet shopping, credit cards that are widely available, catalogs combined with 800-numbers, and a consumer economy that depends on everybody spending. At the same time, savings has gone out of fashion. The current generation has not acquired the habit of saving.

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Wedding Wonkiness: Or how about the ones who would rather hide their marriage than admit they don't have the money to afford a splashy wedding? Yep, know someone who did it. Our society has placed values on the wrong things. I wish my husband would try to hide me!

Michelle Singletary: I have heard everything now.

How crazy is that?

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Silver Spring, Md.: I have a difficult time figuring out why you and other advisers suggest establishing college funds for all incomes. Many colleges are very generous with financial aid (particularly if you are a good student). My parents didn't have the money to establish a college fund for me and I am glad that they didn't because I wound up at a very elite private college and paid a pittance. Many colleges are dedicated to providing enough aid to meet their accepted student's needs. You can scrimp and save, but it will count against you on financial aid and the end result is the same education. Not to mention, I worry that the increasing popularity of college funds will just drive up the cost of tuition. It's a free market, right?

Michelle Singletary: Right and what if you don't get aid? Then what?

The aid is only reduced by how much you saved. So what it the harm then. You use the money you saved.

What I say is save what you can at all income levels. If you get aid great. But many, many, many kids first can't get into an elite school and many, many, many don't qualify for any aid other than loans.

So then what?

Live with student loan debt until you die?

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Va.: Dear Michelle, Thank you so much for today's article on the foolishness of expensive, over the top weddings. Five years ago, my husband and I got married in a quaint little church for around $3000. It lacked nothing as far as we were concerned. Our modest budget allowed for flowers, cake, sparkling juice, gowns for the bridesmaids, shirts for the groomsmen and a fabulous out-of town photographer. Over 50 people of the 100 we invited showed up. We had those who said that we needed to do this and we needed to do that. I politely told them that if they wanted those things then they had to pay up. For my engagement present, my wonderful husband gifted me with a home of our own. Diamonds might be a girl's best friend, but property is more valuable. So, from one who is learning a lot from you, thank you, thank you, thank you. Alex.

Michelle Singletary: You are welcome. It's a hard sell for people who want what they want when they want it despite having massive debt, no home, etc.

One woman wrote fussing me out because I dared say do what you can afford. She was spending $20,000 on a wedding when she had "only" $60,000 in student loan debt. Seriously, she put "only" in quotation marks as if that makes a difference.

It's debt. Bondage.

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Or how about the ones who would rather hide their marriage than admit they don't have the money to afford a splashy wedding?: It's not that they don't want to admit they can't afford a wedding. They want to hide the fact that they're already married so they can have a big wedding and get lots of gifts later!

Michelle Singletary: Hadn't thought of that. Maybe.

That's worse.

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Richmond, Va.: I'm a student from the Sabot at Stony Point school in Richmond, Va., one of Mrs. Riely's students. Do you personally think that Americans will be better able to "hold on to their money" in the future?

Stuart Vyse: Hello, Stony Point School! I only think future generations will be able to do better if they begin to think differently about the things they want. They will need to think more about the value of money in the bank and activities that do not cost money. If future generations continue to watch lots of TV and continue to want the things they see on the screen, they will have trouble. But many of the best things in life don't cost money.

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Richmond, Va.: Why do you think it is so easy to slide into credit card debt?

Stuart Vyse: Credit cards have the wonderful and dangerous quality of feeling like free money. With the card you can buy things you can't afford and put the pain of payment off into the future. Furthermore, our psychology is such that we tend to think very optimistically about the future. We say "It will be OK. I will be able to pay the bill when the time comes." But we forget that things can and often do go wrong. Other expenses crop up that we don't anticipate. Before you know it you are in trouble.

Michelle Singletary: Preach my brother, preach.

Okay, he's not preaching but Vyse hits it right on the head.

Plastic separates us from the pain of paying with cash. I often ask people if they would withdraw $3,000 or $4,000 or $5,000 in CASH to pay for big screen tv, furniture, etc.

They cringe thinking about ALL that cash. It's hard to spend the cash. Easy to put down the plastic card.

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Alexandria, Va.: Michelle, I have to agree with you about the wedding issue. My husband and I got married almost six years ago. We wanted a small thing. My in-laws wanted bigger. I told them we would do it only if they paid for it. They shelled it out because it was important to them. So I spent only what I had planned in purchasing my dress and our cake. We waited to do our honeymoon which we took in year four. We piggybacked on a work trip to Hawaii. I got a premium room for $99 a night, paid for my husband's flight with miles and spent only cash in the bank. I have worked hard to dig out of debt and never want to go back. There are ways to have a nice wedding without killing yourself and borrowing from your future.

Michelle Singletary: That's what I'm talking about.

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Portsmouth, N.H.: Hi, Michelle. Love the chats! My husband and I got married 7 years ago. His now-18-year-old daughter is going to college this fall. Since we got together too late to really take advantage of 529 plans, we've saved $100,000 toward her college costs and kept it in an ING online account. But with interest rates being cut once a month, that 5% interest we used to earn on the money is down to a little over 3%. Is there a better place to keep the college funds, or is anything else too risky? Also: she has savings bonds that we plan to use toward college in her final year. Is that the best time to cash them in (so they have extra years to mature)? THANKS!

Michelle Singletary: Wow, not sure someone who saved $100,000 for college needs my advice.

Just a caution. Since you will be using that money in the next few years you probably don't want to invest it and risk losing any of it. Just keep hunting for the best savings rates and or money market rates.

Wow, hey I have three rugrats, want to adopt one, two....

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Richmond, Va.: Hello Michelle Singletary! I'm a student at Sabot at Stony Point and I want some advice on how to keep money and how to save it even though I want something really bad? Thanks you!

Michelle Singletary: That's such a great question.

Do this for me, today in class, after class but today.

Make a list of the things you really want in the future. Maybe a car, help your mom and dad pay for your college education. A trip.

In other words, make a list of the things that really, really matter. And everytime you want to spend on candy, or something not really worthwhile pull out that list.

It's possible you can pay cash for a car you want (probably used) when you can drive by doing this.

That's what I do. I keep my priorities in mind when I'm tempted to spend. Now I'm WAY older than you so my list has stuff like retirement, paid off mortgage, college fund for my kids. I still have fun. On my list is a two-week family vacation. Anyway, whenever I want to spend a lot of stupid stuff I just remember or look at my list.

It really works. Keeps me focused. Hope that helps.

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Whole Paycheck in Washington D.C.: Dear Mr. Vyse: I am a thrifty person--one of those aspiring millionaire-next-door types--but when I go into Whole Foods or Trader Joe's, I go crazy and end up spending three times what I intended. Suddenly my shopping cart is filled with everything from 50-grain focaccia bread to Greek yogurt to Scottish goat cheese. I'm curious about the strategy taken by Whole Foods that makes people like me spend way too much. Oddly, the smaller the shopping cart provided by the store, the more I seem to spend! Oh, and if I wanted to study this kind of behavior, what field would that be in a university?

Stuart Vyse: Dear Whole Paycheck: I know the feeling. I think it is clear that, once you are right there in the store, the sights and smells have a powerful effect. You make decisions on the spot that are quite costly. My best advice--other than avoiding these stores altogether, which would be the safest thing to do--is to (1) limit your trips to a reasonable number per week or month, as a treat, or (2) try to construct an affordable shopping list ahead of time, well before you go into the store. If you use a list, you might be able to stick to it when you go in. But, of course, avoidance is the safest approach.

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Washington, D.C.: Bravo to your wedding column today! My fiance and I do have some (low-interest) student debt left, but since we got together, we've knocked out his credit card debt, a high-interest private student loan, and built up our savings to a 'life happens' fund and towards our goal of buying a home. The wedding is next week: my floral budget was $50 (silk flowers I arranged myself); the dress was made by my mom; the honeymoon is a cabin in Virginia until we can afford the trip to Africa that we wanted. I won't say it's a cheap wedding--it's not--but it was within our means. We stuck to our budget, cut more where we could, prioritized what we really wanted (having all our friends and family there) and skipped or went lowest-cost on what we didn't care about. And meeting our financial goals together has brought us closer together and given us a sense of accomplishment.

Michelle Singletary: Good luck to you!

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Baltimore, Md.: So why is it that Americans just can't save money anymore?

Stuart Vyse: There are many reasons we don't save anymore. First, perhaps, is the greater temptation of spending today. With credit cards and debit cards, we can be separated from our cash much easier and quicker than ever before. In addition, our economy depends on our spending. That is why we have an economic stimulus package coming soon and why we were asked to go out and spend after 9/11. So, savings is not adequately encouraged by our government and our economy. If everyone saved as they probably should, the stock market would fall. Somehow we need to pull back on this consumer economy.

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Richmond, Va. (SASP student): Which one do you think is better: cash, debit card, or credit card? Why?

Michelle Singletary: Cash.

Even a debit card can get you in trouble. I work with many people in financial trouble who don't have credit card debt but they overspend using their debt card and then have overdraft charges. You see the bank can stil approve a purchase with a debit card even if you don't have the money in the bank.

Debit card is better than credit card but cash trumps it all.

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chesterfield, Va.: I think every student should learn about compounded interest so they can learn how quickly savings can grow, and about probability so they can learn how unlikely it is that they will win the lottery, and how that same amount of money put into savings instead of wasting on lottery tickets will give you money in the end instead of an empty wallet and losing tickets!

Stuart Vyse: I agree with you. Financial education is a very important tool for survival in our economy. Personal finance is much more complicated today than it used to be. Compound interest is important for understanding both savings and credit card interest. We need to promote more and better financial education in schools and workplaces. And, yes, the lottery and all forms of gambling are a losing bet.

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High Priced Maryland Area: Michelle, I read your columns faithfully and promised myself that if I ever come into some money, I'm going to ask YOU to be my financial adviser!!! Anyway, I am seriously considering letting my house foreclose and renting. Our house values have dropped significantly in PG county and I can't even refinance because I don't have enough equity. My husband and I make $150,000/year, yet we are house broke because we bought during the high prices. We paid the mortgage, but now that we have a baby, after we pay all of our bills we have very little money every paycheck. We have only the mortgage, a car note, utilities and daycare expenses. We bought the car because we couldn't fit the car seat into my old car. Should we just let the bank have the house (small townhouse, nothing extravagant by the way) and start over again? I am tired of being housebroke!

Michelle Singletary: I'm sorry you are struggling.

If you can, don't abandon the home. Have you talked to your lender? Perhaps there is something the lender can do to modify your loan. But if it's not about the interest rate, clearly you either have to increase your income or cut more.

Really go thu your budget. I know. You probably have. Go back again. Reduce your cell phone plans. Cut back on the cable package.

Or perhaps you or your husband may have to get a second job. Or perhaps there is a single relative who could move in and help with expenses. I know you said you have a small place but is renting in PG with a baby really going to cut your housing expenses (assuming your mortagge isn't outrageious).

Now if the mortgage is outrageous and even a modificatoin won't help than yes, perhaps you do need to let it go. OR try renting it for the mortgage amount.

But keep trying before you give up.

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Arlington, Va.: Hi Michelle, I saw today's column, and am sadly unsurprised that you "selectively" quoted my response about guest lists in the other week's chat. My point, as you left out, was that someone could have a frugal reception with a full guest list if they LET GO of the expectation that they need to give everyone a sit-down dinner. There were other options for a reception (such as simply serving cake and punch). This is not the first time that you have "framed" the argument in a column, and it reflects on the quality of your advice.

And by the way, your esteemed colleague Miss Manners agrees with my interpretation of a wedding: "Rather, she is afraid that what has affected you is the appalling but prevailing notion that a wedding is 'all about' the bridal couple, with everyone else involved expected to suspend their claims and comforts. Your marriage will be all about the two of you, although Miss Manners hopes that you will have a warm group of relatives and friends. Your wedding, in contrast, is a civic, optionally religious, social and family occasion." You'll forgive me if I look to her guidance first.

Michelle Singletary: You know I was going to avoid how you characterize my characterization of your comments.

But you missed my points. I have never just focused on the guest list. I have written many columns about how to have a frugal wedding that doesn't just include cutting the guest list. But the fact is the two most expensive things of a wedding IS the reception and honeymoon. But who am I to DARE to tell folks to trim the guest list.

All I've said is spend what you can afford.

And yet there is hostilty to that very notion.

Certainly you've twisted what I said when I said the wedding is about the couple. I'm sure what Miss Manners means is today's couples expect the guest to bend over backwards traveling, giving certain kinds of gifts etc. I read her too. I know what she says to couples.

But you've had your say.

I'm sticking to what I said.

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Methuen, Mass.: How can America get past this culture of consumerism (and I'm not throwing stones: though I have no consumer debt, I've only recently started saving)? There are examples everywhere, from the various housing crises to the wider advertisements of payday-advance loans to the introduction of even more eight-cylinder or otherwise high-horsepower, and thus, gas-guzzling automobiles.

Stuart Vyse: It is going to be difficult to throw off the chains of consumerism. Much of the economy depends on it. But it is also clear that, with so many people in debt and barely making ends meet, millions of individual citizens are paying dearly. Limits on advertising and reasonable limits on credit would help. Also, it is very important that we begin to teach the value of saving and living within one's means. Being in debt is becoming an accepted norm, but the anxiety and pain that it creates are often hidden. So many people would be much much happier if they could live more simply and in the black.

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Worried Daughter: I recently found out that my parents are tapping out a home equity line of credit to pay for my sister's wedding. I was already concerned about their financial situation and lack of retirement savings. Is there any way I can stop this madness?

Michelle Singletary: Talk to your parents but utlimately they are grown and free to make stupid money mistakes.

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Richmond, Va. (SASP student): when you say that TV is on over 8 hours a day in the average household, I am proud to say that I rarely watch 30 minutes a week (seriously), because my mom hates us sitting on the couch like little lumps of melting brain all day! I am glad now, because i have time to do things in the day (like practice soccer!) and not be as exposed to advertisements.

Michelle Singletary: Give your mom a big kiss when you get home.

She is raising a great kid by making you get out from in front of the TV.

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Richmond, Va.: Why do people spend more than they make?

Michelle Singletary: They spend more because they want more.

Just think of all the commercials we are exposed to. It's all about buy, buy, buy.

Then there is pressure from peers. How many of you have ipods, video games, brand name clothes -- CELL PHONES.

Do you make fun of kids who don't have those things? Because my kids don't have all those things and they do get teased.

Go home and ask your mamas or papas if they have a college fund set up for you? If they don't and you have ALL that stuff -- shame! You tell them I said that, not you.

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Southern Md.: Somewhere in our lifetime shopping became a leisure activity. Then credit cards became a way to finance an expensive leisure activity. Now it has become time to pay up and there is no money. People used to have a goal to pay off their mortgage; now folks want to "move up" to a larger home and never pay off their mortgage. Finance companies and their advertising have made people "want" what they can't afford to have without debt, sacrificing their financial future. Many people try to finance and spend like an upper-middle class lifestyle (as imagined on TV) without the real upper-middle income.

Stuart Vyse: Dear Southern Md: You sum it up very well. Much of what you describe has been financed by rising house prices, and that trend seems to be over for the moment. Because people just kept acquiring more and bigger things, many were unprepared for the downturn in the economy. Now they are stuck owing more than they can manage. The "unexpected" expense should always be expected, and savings is the only way to be prepared. But part of the problem you describe is due to the insatiable wants of our current culture. That feature needs to change, too. Shopping (spending) as leisure needs to be discouraged in favor of healthier and less costly activities.

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Silver Spring, Md.: Hi Michelle, love the chats, we really value your advice. My husband and I were extremely fortunate to have just inherited a significant ($1M+) amount of money in stocks and mutual funds. Almost 90% in equities. We are in our mid-20s. Should we be worried about the current state of the markets or should we just let our money ride out the storm? Thank you.

Michelle Singletary: If I were you I would pay for some good advice from a professional to make sure the money is well diversified.

But worry?

I think not. You are are so WAY ahead of most Americans.

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Richmond, Va.: Do some people really think these are necessities: TV set, home computer cell phone, flat-screen TV, and an iPod? -Sasp student.

Michelle Singletary: You are so sweet.

YUP.

Many people. I bet many of the people standing around you, right now.

Someone tell me how many kids are in the room? How many have all those things and more?

Many people think cell phones are a necessary to 7th and 8th graders.

Do you?

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More Wedding.....: Right on Michelle. A wedding is a day, a marriage is a lifetime. My in-laws did not give us a cent. We cut expenses everywhere. We negotiated with a printer, had a friend do the photography, used the campus chapel and rode in the back of a VW Beetle down the NJ Turnpike to the reception. We're still married, 27 years later, while both our brothers (with big weddings) have had a total of 3 divorces. We are emotionally, mentally, and financially compatible and supportive, even though we came from different socio-economic groups, religious faiths, etc.

Michelle Singletary: How nice!

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re: saving for college: A lot of us probably got good scholarships and grants when WE were in college back in the day, but tuition is rising WAY faster than salaries, so we as parents need much more help to send kids to school than our parents did. MUCH more aid is merit based than need based these days, so having an empty savings account isn't going to help. As far as judging need, they give income far more weight than savings.

Michelle Singletary: Interesting.

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Richmond, Va.: How do credit counselling services work? How can an organization whisk away a portion of your debt legally? Or is that not how the system works?

Michelle Singletary: They don't whisk away the debt. The agency will negotiate with the creditor to perhaps forgive some of the debt. Or they may get the creditor to stop charging interest so the person can pay it down.

Basically, the agencies help people negotiate a payment plan with creditors. Then they send one payment to the agency and they then send that money to the creditors.

But people have to be very careful about working with certain companies. Some are scams and just take people's money without doing anything.

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RE: High Priced Maryland Area: You may want to consider renting a room to someone you know. The extra cash may help until you have a better job, pay off bills...

Michelle Singletary: I think I said that, but thanks for the backup.

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Chesterfield, Va.: To the student who asked "Do some people really think these are necessities: TV set, home computer cell phone, flat-screen TV, and an iPod?" I bet you have all those things in your house. So awareness that you have IS important, but at some point theory is not enough and you have to actually live without those things. (Sabot is a very expensive exclusive private school.)

Michelle Singletary: Yes, many may but rich or poor (in reference to the school) we all have to learn to live within our means no matter our income.

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RE: Arlington Misquote: Michelle, Don't worry. You are just being attacked by an unreasonable Bridezilla. I mean jeez. How many columnists does it take until she feels like she has received justification of her decisions? What does Miss Manners say about throwing a temper tantrum during an online chat? Michelle, just continue to spew forth your Rodan fire-breathing, common sense financial approach and you will always come out on top. Bride-to-be: just quietly enjoy whatever wedding you choose, and don't lash out at someone who is trying to help you, mmmkay?

Michelle Singletary: I appreciate that you have my back.

I mean really, what is my offense here. I said cut back to what you can afford, INCLUDING the guest list.

Now you if you can have 500 people and serve them cake and Kool-aid on $1,000 or whatever go for it.

But first make sure you go thu my list. Make sure it's truly what you can afford, what you have in cash, without skipping paying off debt you could, or getting a home equity loan etc.

That's all I'm talking about.

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Alexandria, VA: The funny thing about big weddings is that the bride and groom are interchangeable- most of the big weddings I've been to are EXACTLY THE SAME. Toasts, dinner, first dances, bouquet toss, cake cutting, dancing, etc.; nothing's unique. I've been to five weddings in the past two years and they were all essentially the same. Sure, they're nice, but is it really worth all that money to have a wedding like everyone else's? I'd rather have a small, intimate, memorable day (which I did).

Michelle Singletary: Yup.

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Washington, D.C.: As a culture, we glorify celebrities and luxury lifestyles in our television and media, this goes beyond mere advertising. Although, with extensive product placement, the line is blurring and I do think that covert/subliminal/viral advertising should be viewed with a skeptical eye. However, simply placing limits on advertising just shifts the blame from individuals onto industries that meet consumer demand. Where does personal responsibility and education play into this? It's a multi-faced problem that requires a similar solution.

Michelle Singletary: Good question.

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Richmond, Va.: Do you think the book is actually going to help get people out of debt? -sasp students

Michelle Singletary: I think it will help people realize why they spend.

The first step to making a life-long change is to recognize why you do what you do.

Often we spend not really, fully understanding why.

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Rockville:, Md. A comment to students: There are a lot of questions from chatters today that are deeply in debt but there are many of us who are not. My wife and I are frugal and happy in our lives, our mortgage is paid off, we have a 529 for our grandkids and only one car. You don't need a lot of fancy or hi-tech stuff to be happy in life. Simplify your life.

Michelle Singletary: Thanks. Good advice to the kids.

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Elkridge, Md.: When my fiance and I get married next January, we plan to merge our checking accounts. Currently we each have our own individual accounts. When we merge we are unsure what to do with the second account; will it reflect poorly on our credit to close an account that we have had for over 10 years?

Stuart Vyse: Dear Elkridge, I will let Michelle answer the question about the effect on your credit, but I have one suggestion that might help you keep both accounts open.

In my book, I recommend that people designate one checking account as a "bill paying account." Do not use it for everyday spending and don't carry an ATM card for this account. Instead, use it to pay as many of your basic bills as possible (mortgage/rent, utilities, etc.) by automatic withdrawal. In addition, you can have an automatic savings deposit drawn out of this account. Finally, one of you can have part or all of your check automatically deposited in the "bill-paying account" and the rest of the money an go into the everyday spending account.

The benefit of this approach is that it makes it easy do do the right thing. Bills get paid and savings grows whether you do anything or not. In addition, the spending account is a clearer indication of your disposable income. You don't get fooled into thinking you have more than you do each month.

Michelle Singletary: It won't hurt your credit to close a checking account.

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Anonymous: In Stuart Vyse's book he said "With commitment there is hope." Can someone explain to me what he means?

Stuart Vyse: Commitment is where you make an early decision that forces you to do the right thing. Like deciding to leave your credit card at home when you go to the store, or deciding months in advance to begin to have money from your paycheck automatically put aside in a savings account. When you lock in these early decisions they allow you to avoid temptation later on. Commitment is a way of choosing to limit your choices in the future when you might be tempted to do otherwise. In the long run, you will often be happier.

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Upper Marlboro, Md.: Every time I read your chats, I'm reminded to save more, spend less. I just made a 2k contribution to my Roth IRA because I didn't realize there's an income cap and I was afraid of not maximizing my chances to contribute while I'm not making the big bucks. Now I'm realizing I may be losing money that I am contributing because of the markets?! Does it still make sense to keep making contributions because of the tax benefits and the idea that it will continue to grow in the long term? I'm mid-20s right now.

Michelle Singletary: It still makes sense long-term.

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To Silver Spring:: Yes, ride out the storm! Look at the value of any stock over 50 years (how long you'll keep some of that stock). The line goes up and down and up and down for decades, but overall, up. Starts low, zigzags a lot, but generally in an upward fashion. So understand that daily changes only make you nervous. In 10 years those stocks will be worth more and you'll be glad you realized you were in it for the long haul.

Michelle Singletary: Thanks.

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Washington, D.C.: I disagree with you that weddings are not about family. I think they are very much about the joining of two families. My hubby and I got married with a limited budget, but we decided to spend that money on the part of the wedding that was important to us. We had 103 guests including all of our large but close family. We used a mix CD in a borrowed stereo system instead of a DJ, a cake baked by my aunt, no flowers, and I made the invitations by hand. In a wedding and everything else you have to prioritize, and when you make budget cuts you should cut the low priority items first. I think that the vast majority of people have many wedding expenses they can cut before they decide not to invite their grandmothers to their wedding. Hubby and I have been happily married for three years, have only mortgage debt, and have two beautiful daughters who already have college savings accounts.

Michelle Singletary: Again, when you quote me as saying it's not about the family you are misintrepreting me.

If you can invite 103 people fine. But it's the people that want to invite 103 people and still have no savings, debt etc.

If you don't have the money, you can't have a blow up bash. But that doesnt' mean people can enjoy the fac that you are coming together in marriage. Throughout the year certainly welcome family into your home in small doeses.

I'm all about family. I'm just not all about inviting and feeding them when you don't really have the money.

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Questions for the kids out there...: Do you either mentally of verbally judge people you know who don't have Ipods or plasma TVs in their homes? How important are brand name clothes in your school? Do you notice whether your friends' parents drive newer cars or older ones?

Michelle Singletary: Kids????

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Richmond, VA, (SASP student): I think that cell phones are necessary to 7th and 8th graders if they really need one, like if they have a lot of after school activities, and if their mom/dad pick them up after picking up their sister from a soccer game, or something.

Michelle Singletary: And so, there aren't ANY adults around mom or dad can call to make sure you know they are coming?

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Richmond, Va.: We have to sign off and go to another class. Thank you for a wonderful chat! Mrs. Riely

Michelle Singletary: You are so welcome. Thanks to all the students who joined the chat.

I'll continue to look at all your comments and put many in my eletter next week. So look for it.

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Hope you will take one more: What about those Visa commercials that say: 'Life takes Visa' and show all the lines coming to a standstill once someone pays with cash? That advertising is being thrown at us each day!

Michelle Singletary: Funny but very dangerous message.

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St. Louis, Mo.: Hi, Michelle, yesterday I happily made my last car payment and thanks to a bonus, I was also able to pay off 2 credit cards and open a high interest ING Savings Account. Couldn't have done it with you. Thanks!!! What do you think about Wesabe? I've been on the website reading/participating in the blogs, but am a little leery about uploading my accounts. I've also been considering purchasing budgeting software. Can you recommend anything?

Michelle Singletary: Thank you. I love it when people get out of debt.

I've seen the site and gone thu the chats. Not sure I would upload my information to such a venue. But it is nice to see what others are doing with their money.

As for software, we use Quicken but there is a lot off stuff avaiable. use the one that is easiest for you.

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Bethesda, Md.: Michelle, give up. You are never going to convince these idiots that a $50,000 "show" wedding is a poor use of funds. My husband and I married late (first time for both, at 43 and 48). We each came from large families and had a great number of friends, most of whom were not acquainted. We had a very small wedding, followed by a series of "Open Houses" to meet and greet friends' friends and relatives, both in the area and in our hometowns. A great, stress-free and inexpensive time was had by all! The funny thing is, we could easily have afforded a more lavish wedding and/or parties (children are not in the picture). I'm not sure how we managed, and continue to manage, to ignore all the "buy" messages with which we are pummeled, but I'm sure glad we did. Every time I see a Pay Day Loan ad on TV, I want to throw a brick at the set. God willing, we will never have to avail ourselves of one of these and God have mercy on those who do.

Michelle Singletary: I know. But I have to keep trying.

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Richmond, Va.: Stuart Vyse: I am a student a Sabot at Stony Point school and my teacher, Mrs. Riely, has introduced us to your book, and I think that all the statistics about all Americans making bad choices are amazing! (They are making bad choices, and have way too much debt than they could ever pay off!) I am lucky enough to know a little bit about how to manage my money (thanks to my great parents), even though I am only 13. I think your book is great!!!

Stuart Vyse: Thanks, so much. And congratulations to you and to your parents!

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Nearly Out of Debt: Michelle, I greatly respect your advice and stance on debt. In March each year I receive a bonus as part of my compensation. I typically receive 10% of my salary, but I was rewarded this year with 15% for extraordinary effort. My husband and I also received a modest tax return. After my bonus was taxed and I had captured a lot of it in my 401k (with even more from my employer because of their match!) we paid off our credit cards and put the rest on our auto loan. Our car is nearly half-paid after only 18 months. When Bush's check comes in May, we'll put that on our auto loan too. I just want you to know that while some financial advisers would have told us to invest that chunk of cash, we moved quickly to reduce our debt. We already feel freer and very proud of ourselves. YOU ARE RIGHT, Michelle. Absolutely.

Michelle Singletary: I can't think of a better way to end this chat.

Good for you. That debt-free or nearly free feeling is priceless.

Thanks to all who joined me today, especially the students.

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