This online feature may include questions adapted from my weekly live chat. It’s also an opportunity for me to answer questions I couldn’t get to during the discussion. I may also respond to questions you send by e-mail to, Twitter (@SingletaryM) or Facebook (

Q: I just had a baby in January. I am determined to teach him good financial management, even though I haven’t always had them myself. I am getting better and still learning. With the new added expenses of child care and trying to save and pay off debt, I am so confused about what should be a priority. I had to buy a car since my sports car could not accommodate the baby, and the air went out during a heat wave. I owe taxes and want to save for college and bump up my 401(k), too. So much to do and I don’t know where to start. How do I prioritize?

A: Breathe.


Having a baby can really stress a person out. Yes, there’s lot to think about when it comes to your financial life, but breathe.

Now, here’s what I would do:

• Make sure you have a good-working and realistic budget based on the new expenses concerning the baby. As you review your budget, do you see expenses you can cut out or cut down?

• Calculate and then build up two savings accounts: an emergency fund and a life-happens fund. With the baby, six months of emergency funds might be too overwhelming right now. So aim for three months’ worth of living expenses saved (rent/mortgage, utilities, food, transportation, child care, etc.) Your emergency fund should consist of what it costs you to run your household for three months. At the same time, build up a life happens fund so you don’t have to rob your emergency fund for things such as car repairs or for paying for a baby sitter so you can get out sometimes. Aim for about $500 to $1,000 in the life happens fund. So if you have an extra $100 a month, put $50 toward the emergency fund and $50 toward the life happens fund. Once the funds are filled with each particular goal, then stop saving.

• Until you have a good savings cushion, you can dial back your retirement savings. However, if you work where there is an employer match, try to invest at least enough to get the match. But my overall point is don’t try to do too much, because you will become overwhelmed if you don’t have enough money.

• Focus on getting rid of the tax debt, especially if it’s federal, because the interest payments can really add up. Once you’ve filled your savings funds, focus on making extra payments on the tax debt. That, too, may mean pulling back on retirement savings.

• Finally, the college fund comes after you’ve saved, paid off the taxes and gone back to saving for retirement. Yes, it’s very important to save for college, but you’ve got some other priorities that need your attention first. With limited funds, you can only do so much at one time.

Q: My brother and I are adults, have finished college and live away from our parents. Every few years, my parents propose a family vacation (usually a cruise or other tour package). They can afford the trip, and my brother and his partner can afford the trip. Since I am single, I would pay more than the rest since I am not sharing a room. My parents have always offered to pay the difference between the one and two-person fares to help offset my added costs for the trip. I feel pressured into going — it is a time for us to be together as a family. A few weeks ago, they were looking at a river cruise through France. It was quite expensive. Some of the earlier ideas were less expensive, but either my brother or parents had already been to those places. How do you put a price on spending time with the family?

A: Your question suggests you can put a price on spending time with family. You can’t.

But it is true that you can spend time with your family without going on expensive vacations. You know that.

It would be nice to go, but don’t go if you can’t afford it. And say so. Be clear to everyone. Say: “I love these family vacations, but what you guys are considering isn’t in my budget.”

Then suggest places you can afford. If they don’t like your suggestion? Oh, well. Say: “Hope you guys have a great time.”

Just be true to your financial situation. Own it. You are grown, and only you can pressure yourself to do what you can’t afford.

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Readers may write to Michelle Singletary at The Washington Post, 1150 15th St. NW, Washington, D.C., 20071 or Personal responses may not be possible, and comments or questions may be used in a future column, with the writer’s name, unless otherwise requested. To read previous Color of Money columns, go to