Michelle Singletary

Washington, D.C.

 Michelle Singletary writes the nationally syndicated personal finance column The Color of Money, which appears in The Washington Post on Wednesdays and Sundays. Her award-winning column is syndicated by The Washington Post Writers Group and is carried in dozens of newspapers nationwide. She has written three personal finance books, including her latest, “The 21-Day Financial Fast: Your Path to Financial Peace and Freedom.” Singletary was the financial expert for “The Revolution,” a daytime program on ABC. For two years, she was host of her own national television program, “Singletary Says,” on TV One. She is a frequent contributor to various NPR programs and has appeared on national talk shows and television networks, including “Oprah,” NBC’s “Today,” “The Early Show on CBS” and CNN.

In her spare time, Singletary is the director of a ministry she founded at her church, in which women and men volunteer to mentor others who are having financial challenges. As part of this ministry, she and her husband also volunteer to teach financial literacy to prison inmates. She is a graduate of the University of Maryland at College Park. She has received the Distinguished Alumni Award from Johns Hopkins University, where she earned a master’s degree in business and management.

To stay informed about various money issues subscribe to Michelle’s weekly retirement and personal finance newsletters, which will be delivered to your inbox every Monday and Thursday.

Archives

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Books by Michelle Singletary:  

"The 21 Day Financial Fast: Your Path to Financial Peace and Freedom"

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"Spend Well, Live Rich: How to Get What You Want with the Money You Have"

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Recent Articles

THE COLOR OF MONEY COLUMN

(Advance for Sunday, Oct. 20, 2019, and thereafter. Web release Saturday, Oct. 19, 2019, at 8 p.m. Eastern time.)

(For Singletary clients only)

By MICHELLE SINGLETARY

EDITORS - Effective Nov. 1, columns by Michelle Singletary will be available for print publication only.

WASHINGTON -- Imagine that you've worked decades for the same company, often choosing not to take another job for higher pay because your employer offers an increasingly rare benefit -- a pension plan.

Juanita Aikens-English, 64, doesn't have to imagine. She started working as a nurse for St. Clare's Hospital in Schenectady, New York, in 1985. She spent part of her career helping to deliver babies.

Aikens-English said she stayed on at the hospital, which largely served the indigent, because she loved the work and the people. She also counted on her loyalty netting her a monthly pension check.

"We would get letters each year saying how much money you would get," Aikens-English said.

St. Clare's closed in 2008 with another hospital taking over its facilities and absorbing a lot of its employees. Although the new hospital refused to take on the obligation of the underfunded pension, the former St. Clare's employees believed that the pension was solvent. Then the letters started to come informing plan participants that their pension was in peril.

Last year, about 1,100 employees -- nurses, orderlies, laboratory technicians, clerks and housekeeping staff -- were told that they either would not get a pension or it would be greatly reduced. About 440 older workers and retirees who met an age cutoff saw their checks cut by 30%.

Aikens-English, who had planned to retire next year, elected to collect her pension early at 62. But she ended up receiving only two years' worth of a reduced pension check of $1,000 before they stopped.

"I feel like I've been cheated out of some peace of mind," she said.

If you don't have a pension, or if yours is solvent, you might wonder why you should care about the folks who worked at St. Clare's.

Here's why.

With each federal budget season, we are reminded of the ballooning costs of taking care of people who don't have the financial resources to take care of themselves. Every pension that is shut down or is in financial trouble becomes our nation's collective problem.

In the case of St. Clare's, some people have had to sell their homes, because they just can't afford them any longer, according to Victoria Esposito, advocacy coordinator for the Legal Aid Society of Northeastern New York. Others are having trouble making ends meet on the reduced pension amount.

"These are not people who are looking for a handout," Esposito said. "They earned those pensions."

The federal Employee Retirement Income Security Act -- otherwise known as ERISA -- sets standards for private pension plans. As part of the act, the Pension Benefit Guaranty Corp. (PBGC) was established. PBCG operates two separate insurance programs -- one covering pension plans sponsored by a single employer and another covering "multiemployer" pension plans.

However, there is an exemption in the law that excludes religious-affiliated pensions from being covered under ERISA. The exemption includes church-related tax-exempt organizations, which includes some hospitals. Although such entities can choose to be covered by PBCG, there's no requirement that they pay for the insurance.

St. Clare's wasn't covered. And because of the hospital's former connection to the Roman Catholic Church, the AARP Foundation, Legal Aid Society of Northeastern New York, Legal Services of NYC-Brooklyn Legal Services and a private attorney have filed a lawsuit against the Diocese of Albany.

The lawsuit, filed under state law, says that the diocese should be held responsible for the insolvency of the pension fund.

"The hospital took advantage of the church plan exemption because of its close relationship to the Diocese of Albany," said Dara Smith, a senior attorney with the AARP Foundation. "So, we believe the diocese is responsible for paying into the pension fund."

A spokesperson for the diocese says the church doesn't see it that way.

"The diocese respects the rights of pensioners to do what they feel is necessary to secure recovery of their lost benefits," said Director of Communications Mary DeTurris Poust. "However, the Diocese of Albany never managed the St. Clare's pension fund."

But again, this isn't just about this one pension plan. There are possibly 1 million people nationwide participating in religious-affiliated pension plans, according to Smith.

"But that's not to say that all of them are in financial trouble or anything like that," she said. "But because they don't have the federal backstop, of course there is always more risk."

AARP's advice: Check out your church plan.

"Many people would have no idea that they are not protected by federal laws on pensions," said William Alvarado Rivera, senior vice president for litigation at AARP Foundation. "It may well be something that people may want to ask if they're working for a company, a school, a hospital or some other provider -- to ask whether or not their pension is being guaranteed under federal law."

As I reviewed the facts in this case, it's clear to me that Congress needs to revisit the religious-affiliated pension plan exemption. Or many more people might find out too late that a promised safety net has vanished.

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Readers can write to Michelle Singletary c/o The Washington Post, 1301 K St., N.W., Washington, D.C. 20071. Her email address is michelle.singletary@washpost.com. Follow her on Twitter (@SingletaryM) or Facebook (www.facebook.com/MichelleSingletary). Comments and questions are welcome, but due to the volume of mail, personal responses may not be possible. Please also note comments or questions may be used in a future column, with the writer's name, unless a specific request to do otherwise is indicated.

(c) 2019, Washington Post Writers Group

THE COLOR OF MONEY COLUMN

(Advance for Wednesday, Oct. 16, 2019, and thereafter. Web release Tuesday, Oct. 15, 2019, at 8 p.m. Eastern time.)

(For Singletary clients only)

By MICHELLE SINGLETARY

WASHINGTON -- On any given Sunday after church services, fellow parishioners seek me out to ask personal-finance questions. I will, when I have time, try to help on the spot.

But I've always found it frustrating that strangers often see the value of my financial wisdom more than the people closest to me.

So, what's a financially astute person to do when watching co-workers, friends or relatives make monumentally bad money decisions? Such a quandary was the subject of a question I received from a reader during a recent online chat.

"What advice do you have for someone with a longtime friend (mid-40s) who doesn't have the best finances and lacks reserves? I don't want to 'finance shame' this person, but how do you address these issues and start a meaningful and well-intended dialogue with someone about getting them headed in the right direction?"

As much as you care, you can't make grown folks do right. And often your advice -- no matter how well intentioned -- can seem smug.

In my younger years, I was the self-righteous, butt-in friend and relative who tried to steer people to better decisions. I'm a natural-born penny pincher, so it just seemed crazy to me that folks would go on vacation without having an emergency fund. Or, I would question why someone was buying a new car when they could repair the one they had.

I would -- without success -- discourage people from buying homes that I knew would stretch them to their financial breaking point.

After I had children, my social circle increased to include a wide network of other parents. I was dismayed at how many overindulged their children. When I'd ask if they had established a college fund, they would admit that they were saving very little or nothing at all. Yet many of these same parents complained that their children were being deprived of need-based financial aid for college because they made too much money. Their resentment was ridiculous to me when they had the means to save -- at least something.

And don't get me started on the ill-advised decisions to send their children to colleges they couldn't afford without decades of student loan debt. Too many times to count, I lost this battle to bring them to their senses.

I became increasingly exasperated that the people who know I meant well just wouldn't act on my advice. Their financial struggles weighed heavy on my heart, as if I had failed them. I write about personal finance for a living, so no one in my sphere of influence should be financially reckless, right?

However, with age comes the wisdom that I cannot always be my brother's -- or substitute any close relationship -- keeper. Sometimes people have to fall flat financially before they get up and make better choices.

Or maybe they are living paycheck to paycheck, and all your advice does little to address the core issue, which is that they need more income.

So when should you butt in when your friends, family and colleagues lack good financial judgment? Here's when.

-- (BEG ITAL)After being asked(END ITAL). You have an increased chance that your advice will be taken if your opinion has been solicited. Once the door is open, provide guidance. But don't be a bully about it.

-- (BEG ITAL)You suspect a scam(END ITAL). Step in immediately if you think someone is about to be scammed. This becomes your business. This is definitely the time that if you see something, you should say something.

-- (BEG ITAL)Any fallout may impact your finances(END ITAL). Let's say your mother is a bad money manager and you know that if she doesn't become a better financial steward, you'll have to rescue her when she retires. And you will, because she's your mother.

It's OK to step in with advice if it's likely that it will cost you more to help down the road. Share your concerns. Be candid about your fear of not having enough money to bail someone out if that's the case. Also, communicate clearly what you'll be able to afford should your family member or friend fail to change. Then don't cave if you know the person didn't take your advice. You don't want to facilitate irresponsible behavior. If you do, you become an impediment to their growth.

If you're the financial guru in your social network, make it known you're willing to help, and do so without being judgmental. However, if folks exercise their free will to mess things up after you've given them good advice, don't blame yourself for their fall.

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Readers can write to Michelle Singletary c/o The Washington Post, 1301 K St., N.W., Washington, D.C. 20071. Her email address is michelle.singletary@washpost.com. Follow her on Twitter (@SingletaryM) or Facebook (www.facebook.com/MichelleSingletary). Comments and questions are welcome, but due to the volume of mail, personal responses may not be possible. Please also note comments or questions may be used in a future column, with the writer's name, unless a specific request to do otherwise is indicated.

(c) 2019, Washington Post Writers Group

THE COLOR OF MONEY COLUMN

(Advance for Sunday, Oct. 13, 2019, and thereafter. Web release Saturday, Oct. 12, 2019, at 8 p.m. Eastern time.)

(For Singletary clients only)

By MICHELLE SINGLETARY

WASHINGTON -- What is it about tipping that makes people lose their minds?

I'm still reeling from the vitriol that came my way following a recent column in which I argued that tipping should not be about ourselves but about the food-service workers trying to earn a living.

One email -- in all caps -- had so many f-bombs that I stopped counting.

Travel expert Christopher Elliott, who writes the Navigator column for The Washington Post, thinks people responded with such disdain about my suggestion because they're really angry about the lack of price transparency. The price isn't the price anymore, they argue.

"Tipping isn't just a restaurant issue," Elliott said. "Gratuities affect a wide range of service workers, from hotel housekeepers to tour guides. And this isn't about depriving servers, housekeepers or tour guides of their salary. It's about truth in advertising."

Whether it's for a hotel room, a restaurant meal or even a muffin, businesses owe it to their customers to be upfront about the true and full cost, Elliott said.

"One of the tenets of capitalism is that you tell the truth about your prices," he said. "So if you say that this cup of coffee is going to cost $2, then you should be able to pay $2 for it. And that's the end of the transaction."

Of course, that's not happening, which is causing tipping fatigue, especially for travelers. The economics of the service industry has shifted to make it the direct responsibility of the customers to subsidize the salary of the workers.

Tips are no longer really optional.

Going on a cruise? There are a number of people who will expect a tip. That scuba-diving excursion means tipping the guide.

And don't get Elliott (or anyone else, for that matter) started on how airline tickets are priced. Spirit Airlines charges travelers to have a customer service agent print out a boarding pass. Does it really cost $10 to print out a piece of paper?

It's at the point where travelers need to pack a lot of cash just to tip all the people helping them along their journey.

Elliott, meanwhile, is opposed to the suggestion that restaurant customers tip 20%, no matter the quality of service.

"A mandatory 20% tip is a slippery slope," he said. "We've already seen how it plays out in the travel industry. Cruise lines now 'automatically' add tips to your final bill. In coffee shops, you're getting hit up for a tip before you get your beverage. Hotels add tips to your room service tab. No one is against employees being paid a fair wage. But you don't do that by lying to customers about prices. You raise your prices to the point where you can pay your workers a living wage."

Many of the readers who wrote me said they don't like the anxiety that comes with tipping. "What's fair?" they worry. They're concerned that they'll insult someone or tip too much.

"I always tip," one reader wrote. "I just struggle to determine how much to tip."

Of course, there are guides to help you figure out how much to tip. Check out the tipping guide at the Emily Post Institute.

Here are some questions from readers unsure of what to do in certain situations, and my answers.

Q: Do you tip before or after taxes?

A: There's no consensus on this issue. The general tipping guide for the Emily Post Institute on etiquette says you tip pre-tax.

However, some servers argue that quibbling over whether you should tip pre- or post- the tax is petty.

For example, let's say your meal pre-tax comes to $100. With a 6% sales tax the bill comes to $106. Before taxes a 20% tip would bring the bill to $120. At $106 including tax your bill would be $121.20

So, no, you aren't going against etiquette protocol to base your tip on just the meal and not the tax. And neither should you be called a miser if you tip pre-tax. But just consider that the extra money could go a long way for someone trying to make ends meet on a low-wage salary.

Q: If you have a coupon, do you base your tip on the discounted price?

A: Your tip should be based on the original menu price.

Q: If you get something complimentary at a restaurant, do you tip the same percentage as if it hadn't been free?

A: Tip on the full value of the comped meal or item.

Today, service always has a cost -- and is never subject to a discount.

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Readers can write to Michelle Singletary c/o The Washington Post, 1301 K St., N.W., Washington, D.C. 20071. Her email address is michelle.singletary@washpost.com. Follow her on Twitter (@SingletaryM) or Facebook (www.facebook.com/MichelleSingletary). Comments and questions are welcome, but due to the volume of mail, personal responses may not be possible. Please also note comments or questions may be used in a future column, with the writer's name, unless a specific request to do otherwise is indicated.

(c) 2019, Washington Post Writers Group

About
Michelle Singletary writes the nationally syndicated personal finance column The Color of Money, which appears in The Washington Post on Wednesdays and Sundays. Her award-winning column is syndicated by The Washington Post Writers Group and is carried in dozens of newspapers nationwide. She has written three personal finance books, including her latest, “The 21-Day Financial Fast: Your Path to Financial Peace and Freedom.” Singletary was the financial expert for “The Revolution,” a daytime program on ABC. For two years, she was host of her own national television program, “Singletary Says,” on TV One. She is a frequent contributor to various NPR programs and has appeared on national talk shows and television networks, including “Oprah,” NBC’s “Today,” “The Early Show on CBS” and CNN. In her spare time, Singletary is the director of a ministry she founded at her church, in which women and men volunteer to mentor others who are having financial challenges. As part of this ministry, she and her husband also volunteer to teach financial literacy to prison inmates. She is a graduate of the University of Maryland at College Park. She has received the Distinguished Alumni Award from Johns Hopkins University, where she earned a master’s degree in business and management. To stay informed about various money issues subscribe to Michelle’s weekly retirement and personal finance newsletters, which will be delivered to your inbox every Monday and Thursday.

Archives

Read all of Michelle's Newsletters Read all Color of Money Discussions
Books
  • "The 21 Day Financial Fast: Your Path to Financial Peace and Freedom"
  • "Spend Well, Live Rich: How to Get What You Want with the Money You Have"
Links