Thanks so much for joining me today.
Or how about lending someone your credit card? That's the topic in today's newsletter.
And as always it's Testimony Thursday. If you're new to the chat, I encourage people to share about their financial successes.
Let's get started.
— Michelle SingletaryQ: Tiffany's Dress
Why are people on Twitter telling our girl Tiffany that she should treat herself to a new dress for wearing another dress a second time to save money?! It's like telling someone on a diet to celebrate losing three pounds by going out for ice cream!!! �♀️
Read Michelle's column: When a $4,000 dress is a symbol of frugality
A: Michelle Singletary
It's so interesting the reactions I'm reading. I agree with you. If she wears that dress 100 more times, I wouldn't care. It was $4,000. I would wear it until it was just a necklace!
Q: Piggybacking
I have had mostly positive experience with this. When my FIL was helping to purchase building materials for a remodel, we provided an authorized user card for him; that was only what he used it for. At the end of project, we received new cards, an did not request the additional one. I also provided an authorized user card to each of my daughters while in college, for some living expenses. One needed some reigning in, our second daughter forgets she has it, and has only used it 1-2 times. I have been purchasing groceries/household supplies for my elderly home-bound mother, and she wanted to send her checkbook with me to do this; however, I am not the POA, nor on the account (my sister is, but due to a recent accident, is home-bound herself); so I suggested she request an authorized user card for this purpose. That way, she will can just write one check when she receives her statement, and doesn't have to write me a check on a weekly basis! I'm carrying around two checks now to get to the bank. I just received it last week, so I will use it for this week's grocery trip! However, this being said -- it's not a situation for everyone. And expectations/limits need to be up front, whether its for gas or groceries, or other purchases. And yes, my daughter ranked a great credit score from using my card.
Read Michelle's column: This credit card mistake can cost you a lot of money
A: Michelle Singletary
I totally get that his strategy worked for you. But fear it does't for so many people who get stuck with the debt.
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If you are going to have an authorize user just understand what you are signing up for. YOU owe for everything charged on the card. EVERYTHING.
Q: The "trick" to affording travel
Less a question than a testimony: I (a gray-haired gramma) was seated next to a young man at an event not long ago, and he asked me how my husband and I had managed to do so much traveling. I thought for a minute, then answered "Well, we're cheap. On long car trips, we camped or stayed in budget motels, ate picnic lunches along the road, or microwave dinners in the motel room. If we're flying, we traveled at odd hours or used frequent flyer miles. Once at a destination, we walked everywhere to really get a feel for the place. Our trips to South Africa were as volunteers, so we were given accommodation while we were there -- not deluxe, but perfectly adequate and part of the experience." He was so disappointed with this answer! I think he was hoping to learn of a secret bargain website that would give him four star travel for a song. Nope, sorry. We still have a marvelous time; we just do it on a shoestring. It IS possible!
A: Michelle Singletary
Love your story. And you are so right. It is possible to travel on a shoestring budget.
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But it's also nice to get the five-star treatment. My husband and I save up to take a family 2-week vacation every year. We stay in a great hotel with all the amenities. It's our treat for being so frugal the rest of the year.
So the trick is to know what you can afford. And when you save, spend the way you want because you can.
Q: Financial Advisor
Hi Michelle! I'm 59 and have 401-K's in several different places, TIAA-Cref (3), Fidelity, and one with a group affiliated with the non-profit I now work for. Should I consolidate them? Also, I need a financial planner, how do I find one? Thank you!
Read more from Business: 10 important steps to take before hiring a financial adviser
A: Michelle Singletary
So without knowing more I can't tell you if it's wise to combine the workplace retirement accounts. It depends. If they are each getting you good returns, no need to combine. If you want to have the ease of watching and managing them all together and the new plan has good choices and past returns, sure combine.
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But before you do anything, it is worth it to get an opinion from a fee-only planner. Read the article to help get you started on finding a planner.
Q: If you had Bill Gates' charity money, what would you spend it on?
I'd fund a solar desalinization competition to try and get water to Cape Town: https://www.washingtonpost.com/news/world/wp/2018/02/23/feature/as-cape-towns-water-runs-out-the-rich-drill-wells-the-poor-worry-about-eating/
A: Michelle Singletary
I actually love playing this game. My husband and I talk about this all the time. In fact, we have a non-profit dream. If we had Bill Gates money we would open up a financial wellness center. A place where people can come and get financial help without worrying about being taken advantage of. In this non-profit center we would employ consumer advocates, lawyers, CPAs and financial planners. We pay them so you don't have to. We would have a sliding scale so people who couldn't pay would get services for free. We would locate near public transportation and have a place to watch the kids while you meet with the professional.
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-- Get your simple will done
-- Credit counseling and very, very low cost debt repayment plan
-- Tax preparation
-- Financial planners who would help look over your investments and make sure you are on track. If we sold products it would only be low-cost index funds.
- Lawyers to help with small claims, child support and even bankruptcies.
-- Consumer counselor who would help review contracts before you sign to make sure people aren't taking advantage of you.
We would establish such centers across the country. Again, a place to get help for your money issues where we vet the professionals and pay them.
That's our dream if we had Bill Gates money.
The point is find your passion, the things that matter to you and give your time or money to support them.
Since we don't have the money for your center yet, my husband and I volunteer at our church and in prisons.
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But one day. One day. . .
Q: Tiffany's Dress
Loved her on the Oscars and SNL. I think when you look good in something (and she does), you should wear it often!
A: Michelle Singletary
Totally agree. So if you say yes to the dress wear it multiple times!
Q: Carrying around checks to take to the bank
Some (most big?) banks have apps for smartphones and tablets that allow you to deposit checks by taking photographs of the front and the back. It eliminates the need to "go to the bank" to deposit them. Sometimes the photo recognition is a bit temperamental (light and a contrasting background help). But other than that, it's been rather painless.
A: Michelle Singletary
Thanks for the tip.
My daughter does this all the time. I haven't yet. Should. I just like making sure it's there by going to the bank. I only just felt comfortable depositing checks in the ATM.
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(Y'all I'm so old!)
Q: Pending Widowhood
My father is in hospice care and not doing well. My 72 year-old mother is just starting to take over the finances and it's a mess. They live on social security and have no savings. My father has always made terrible money decisions, so mom might actually end up better off. What advice (other than establishing a life happens fund) should I offer my mom?
A: Michelle Singletary
I'm so sorry about your father.
I would recommend you help her look for a financial class or program. Just a place where she can learn about various financial things.
Also, go to debtadvice.org. It's the site for nonprofit credit counseling agencies. Have your mom make an appointment with a counselor to just do a budget and over her finances. Nonprofit credit counselors do more than just set up debt repayment plans.
Q: Travel on a budget
I'd rather not travel at all than go somewhere and stay in a hostel or campground. Instead, we tend to travel less frequently, but pay for nicer accommodations when we do.
A: Michelle Singletary
Definitely a lifestyle choice. Sometimes I don't mind going budget. But other times, I want room service.
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I know. Shocking right?
But sometimes I just want them to bring me the food to me. Don't do it all the time. But I do treat myself. Learning to treat myself.
Q: Tiffany Haddish
She’s hilarious and wise. I love it when celebrities use their voice to encourage the general public to be responsible. Usually when we read about famous people and money, it’s obvious how expensive their real estate, cars, vacations and clothes are. How refreshing to have her wearing that dress again after explicitly stating how much it cost and that she’s going to get her money’s worth. And now we know she has a reasonable mortgage, too! She’s a true role model.
A: Michelle Singletary
I know right! Very refreshing.
Q: College Acceptance Letters
It is that time of year.....college acceptance letters are coming in. Hearts will soar and some will break. Parents and students need to have a heart to heart about the cost of college. Outside of a home, this is a major purchase for a family. Do not lose your heart to a college that you and your HS senior CAN'T afford. This financial decision will impact you and your family for decades. Student loan debt is no joke and can choke an 18 year old for the next 20 or 30 years who is paying off student loans. So I ask that parents and students realistically look at affordable colleges that are within your budget. Don't scoff at community colleges. A year in a dorm with food is more than $10k. That translates to a nice used car that can be driven to and from campus at a community college. The local college and living at home will save at least $40,000 dollars. You can do the math now or you will do it later with massive college debt. Choosing a college and paying for college requires the heart and mind.
A: Michelle Singletary
I LOVE you!
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And stop trying to take my job :)
Really, couldn't not have said it better.
P.S. I'm planning to write a column about this in the next few weeks. Anyone else want to chime in. Going to use this comment and others.
Q: Relocation to places with a lower cost of living
I know the DC area is expensive. When I look at a cost of living calculator, it shows that someone making $100,000 in the DC area would only need to make $75,000 in other parts of the country where housing and other expenses are lower. While that might be true, I am having a hard time with the "sticker shock" of thinking about taking a 20% pay cut to move out of the area and closer to my aging parents. Currently, I spend $100/week on my commute with parking, tolls, and Metro fees. I would save all of that plus some of the miles I drive just getting to the Metro station. Right there is a $5,000/year savings from moving out of the area. I know housing, gas, food, and other expenses will also be lower. But, I feel like at the end of the year, I will have less money for savings if I have a lower base income. I know that I am not doing this for a career, but to help family, but I don't want to put myself in a financial disadvantage. The one thing on my side is the fact my mortgage is paid off and housing is much less expensive where I would move.
A: Michelle Singletary
You are thinking right on this. Looking at all the angles.
But keep in mind if your cost basis is lower you still should have the same savings ability percentage wise.
Looking ahead, if you do have to help your parents or if they have to move in with you, you'll be right there with less stress of getting to them or hiring someone to get to them.
And you are mortgage-free? You got this from what I can tell.
Q: Tiffany Haddish dress
I love Tiffany Haddish! She is so funny! I don't blame her for wanting to get her money out of a dress. My weight is always so up and down so when I have an event coming up my goal is to fit into an old dress...not buying new dresses.
A: Michelle Singletary
Yup, an event definitely helps my seesaw weight issue.
Q: Affording travel: it's all about priorities
My family and I took a once-in-a-lifetime trip 3 years ago, a 2-week African safari. I brought back gifts for a few people, including a friend and her son, who are like family to me. When I was chatting with her about meeting up to bring them their souvenirs, she told me that her son was really, really envious about the trip, to the point where he was a little upset. (He was 13 at the time, so a kid, but old enough to be responsible for his own reactions.) When we met with them I told him that he would go on a safari if it meant that much to him, it's just a matter of priorities. He's a very, very smart kid, so I said that if he really wanted to go, he could get the money somehow, if he didn't care how he got it, right? But his family and his integrity are more important. But if you're working a low-paying job, you can still save a little here and a little there, and make that your ONLY "want"...if it's more important than going to the movies, or having cable, etc. That made him feel a lot better, and I think I quoted you a couple of times in there.
A: Michelle Singletary
Thank you and for the thoughtful way you share with the young man.
I tell folks all the time since you can't everything, figure out what's important to you and spend your money on that.
If you find your finances don't fit your want, change your wants. That's called being a responsible adult.
Q: Paycheck checkup
Just wanted to chime in and say how important it is. I did mine recently, and although we've been getting refunds in the low 4 digits (don't hate, that's not a significant amount for us to "loan" Uncle Sam), we're going to OWE in the low 4 digits next year unless we increase our withholding! I'm going to wait and run it again because my partner is due for a raise, plus I had to estimate one or two numbers, but we're definitely increasing our withholding!
Read Michelle's column: It’s not fun to do a ‘paycheck checkup’ — but do it anyway
A: Michelle Singletary
Thanks for sharing. And yet another reminder to do a paycheck checkup. New tax laws and you want to be sure that you are having the right amount of money taken out of your paycheck.
Q: IRS Sign Up
We just signed up for Social Security accounts and its system requires a code each time we sign in. However, it can send the code to an email account. I dislike the notion that everything requires a cell phone account. The IRS system should be the same as Social Security. Also I assume this account has nothing to do with the account required to do e-file.
Read Michelle's column: Setting up an IRS online account is well worth your while
A: Michelle Singletary
I'm with you. I HATE giving out my cell to get a code to get into my accounts. But that the times we are living in. We have to protect ourselves from data thieves.
And you are correct, the IRS online account is not the same as the account set up to e-file.
Q: Piggybacking
Our children knew better than to ask for this. We paid for college, but I told them they could do anything they wanted as an adult....as long as they paid for it. One child worked their way out of credit-card debt, and eventually bought a house for cash
A: Michelle Singletary
Good for you. Too many parents enable bad financial behavior by their adult children.
Q: Tiffany's dress
My mother wore the same dress to my wedding, my sister's wedding, my brother's wedding and my niece's wedding. She thought it was pretty and why waste money on another dress? She could have afforded a new dress easily, she just didn't want to buy a new one. She was in that dress in her obituary picture, it made us all smile.
A: Michelle Singletary
Your story just made me smile.
Q: Tiffany's dress
I love Tiffany Haddish and love the dress. She was great in Girls' Trip and on SNL, but the Super Bowl Groupon commercial missed the mark. Regardless of how much she paid for the dress, she should wear it as much as she wants. It's a beautiful dress and she looks great in it! It's refreshing to see a Hollywood star be practical and not make the rest of us think we need a new dress for every occasion.
A: Michelle Singletary
If nothing else her wearing that dress multiple times has started conversations about money/wants/needs and I think that's terrific.
Q: Lending Credit Card
A couple of years ago I moved to Brussels to conduct research for my PhD and it was the first time I was leaving the country to live alone. Right before leaving, my dad gave me his credit card number with the expiration date and told me to use it only if needed "just in case something bad happen". I hid the info somewhere in my luggage and luckily I never had to use so I forgot about it. I found the piece of paper in my suitcase some months ago when planning for another travel and I shed a tear thinking that it was the clearest demonstration of my dad saying "I care and I trust you".
A: Michelle Singletary
The upside of piggybacking.
Thanks for sharing.
Q: Paying for college
Know it's been said before, but is worth repeating. Community college gives you a great start on your general education requirements (and in some fields, the AA degree can be the terminal degree-- radiology tech, certain nursing levels, licensed vet tech) that gives kids a leg up. If they choose a field that requires a 4 year degree, they can transfer for the final two years.
A: Michelle Singletary
And yet so many parents and students look down on folks going to community college. Such a shame.
Share this articleShareQ: Tiffany's dress in multiple appearances
Last year (or the year before) the male anchor of a local Florida station wore the same suit - the WHOLE year. Nobody noticed. But you can bet the viewers pay attention to the woman's dress. Can we say double standard? You go girl - get the $4K worth out of that awesome dress.
A: Michelle Singletary
Yes, we can say double standard. But much of the pressure to dress to impress comes from -- WOMEN.
Q: Banking by app
I haven't been able to feel comfortable yet doing banking via my smartphone. I don't do anything on my phone that requires signing into any financial accounts. I won't even make an online purchase with my phone. I am afraid of hacks. Am I being too paranoid? I do online things at home from my computer all the time, but I am constantly running security softwares.
A: Michelle Singletary
Actually, I believe security folks say it's safer to use your phone.
Am I right?
Q: Having a "Life happens" fund testimony
Make no mistake, it takes discipline and willpower to keep depositing money into a "Life happens" fund. Friends, it is so worth it!! My husband and I deposited $200 a month into this fund for years. We were lucky enough to not need it very often in the past. As it grew bigger, it became more and more tempting to use for a vacation, new furniture, fancy shoes, jewelry,and so on , but we resisted. Suddenly, last weekend, our 17 year old vehicle died. It had been well maintained, and we hoped to get another year out of it. That was not to be. It got to the point where the cost of the repair ($3,000) did not make financial sense. Out "Life happens" fund came to the rescue. Because of it, we were able to buy a two year old vehicle with only 11,000 miles on it right away. We paid cash for it. The fund also paid for the cost of a rental car for a week, and the disposal of the old beloved vehicle. Although our fund is almost depleted, we are planning on putting money into it this month, just as we have done for years. Not everyone is fortunate to be so "Life happens" free as we were all those years. Still, when the time came, we were so happy and relieved to have this emergency money ready. Friends, start one today and stick with it. You'll be glad you did!
A: Michelle Singletary
The life happen fund rocks!
Q: Piggybacking
Several years go I let my sister charge her new roof to my credit card with the agreement that she would male the payments; I didn't have the money to lend her. I had the bills mailed to her address. She made monthly payments, albeit most of them were late. When I learned this, the interest rate had jumped from 8% to 26%, and not wanting the late payments tho hit my credit score, I paid off the $1800 balance. I assumed she would keep sending monthly payments to me until the debt was paid. She didn't. but at least by then I could pay it from savings.
A: Michelle Singletary
A warning lesson.
Q: Wearing the same dress more than once
I'm totally in favor, but I thought many actresses might not actually pay for the dress they way on the red carpet because they are advertising the designer ("who are you wearing?").
A: Michelle Singletary
Many don't.
She did. She wasn't famous yet. Going forward, she'll probably get free dresses. Still I love that she's making a statement. I'm looking forward to the next time she wears it.
Q: 'authorized user' the European approach
It's not exactly the same, but because European cards are chip and pin - it can be really handy to be able to hand someone your card and say 'use it when you're at the shops', knowing they know your pin. This can be a really idea too, of course!
A: Michelle Singletary
I just got scared.
For some wouldn't be a problem.
Just be careful out there. People mean well but they might charge and later can't pay. Just saying.
Q: It's about the Person on the Job Not the College
Although a college might help one get a first job--e.g., alums--once I got a job I don't recall other than in casual conversation any interest in where I got my degrees. I recall having a staff member tell me at one point how she had a degree from one of the sisters' colleges as if that would mean much to me--her supervisor who graduated from a small liberal arts college selected so I could transfer credits and not be expensive. My work ethic was what people were interested in not where I wen to school.
A: Michelle Singletary
You are so write. It's so often NOT the school but the person. I've said it many times before.
I'm at THE Washington Post. Baltimore city public schools, University of Maryland, College park. When I got to the Post, the guy across from me had graduated from Harvard.
We both ended up at the Post. And at about the same time in our careers.
Just saying.
Q: Paycheck checkup
I found the calculator, but...do I enter my income and federal withholding so far, or do I enter both of us if I am filing joint married?
A: Michelle Singletary
Read the instructions carefully. It will tell you which figure to enter.
Q: Happy International Women's Day!
Dear Michelle and chatters (and I know there are men too in this group). RE Tiffany's dress-- stunning, and frugal...what's not to like? Meghan Markle is lovely, and a recent quote is perfect: “I fundamentally disagree with that because women don't need to find a voice: they have a voice. They need to feel empowered to use it and people need to be encouraged to listen." Financial management skills and financial freedom are two things to celebrate today, too! So many women (like Michelle, and her Big Mama) make it possible for younger people to thrive. Thank you, Michelle
A: Michelle Singletary
Thank you!!!! Lovely note and message.
Q: Multiple 401K's
to the OP regarding consolidating 401Ks - I had a couple 401K's from different companies I had worked at. Rather than consolidating into one 401K she may want to take this opportunity to roll them into IRA's, or even Roth IRA's. When I retired I found my 401K's had distribution rules, such as: how often, setting up scheduled amounts, etc and IRA's are much more flexible. Also, with any separate investments, be sure you are diversified as much as you think you are. Check what your funds are most heavily invested in. Two different funds that have different names, but are each heavy into energy, for example, are not really diversified.
A: Michelle Singletary
Good point.
Q: Credit Card
Hi Michelle, I know you will probably totally disagree with me but when my kids turned 16 they got a credit card. This was done for my own convenience...my kids were able to run errands and get their own gas. I set their credit card limit at $500 because I figured if they lost the card or over spent...it limited the damages. Well, my son, oldest child, has been awesome with the responsibility. He never charges with out permission but my daughter has been the one to really push it. She totally abused the privilege and was maxing her credit card out each month. After three months of this I took her credit card away. Let me tell you she really regretted her behavior and I feel like she is learning her lesson. I would rather her learn her lessons at 16 as opposed to 26 or 36.
A: Michelle Singletary
You are right. Totally disagree. But I understand why you did what you did.
But I still encourage parents to hold off giving kids credit cards to regularly use.
My kids drive. They don't have credit cards. They just use their debit cards.
The lesson we should teach teens and young adults is how to use cash. Even if they are paying off the bill every month, study after study shows that when you use credit and debit you spend more than if you use cash.
So even a debit card can encourage overspending.
Cash is better. Then debit card. Credit cards later when they have a full-time job.
Q: Paying for road assessment
What is the best option when faced with a city assessment on your property? We are expecting a baby in June and will have a bill from the city for the road/utility project that we could either pay (from emergency savings - it's too much for the Life Happens fund) this year or add to our property taxes to pay off over 15 years at 5-6% interest. Should we hold on to our cash and let it go on our property taxes or pay it off this year and hope to replenish the emergency fund while our monthly expenses jump up?
A: Michelle Singletary
If you think, even with a baby coming, that you can replenish the emergency fund, I would pay the assessment off.
Q: -- Consumer counselor who would help review contracts before you sign to make sure people aren't taking advantage of you.
My Realtor laughs because I read absolutely everything. The laugh was on him: the stager he used (who did a great job) had a clause giving me all liability. He couldn't believe his clients had been signing this. Funny how they had another one on hand that didn't make me take all liability. They were trying it on. We were having a celebration party at The Whitechapel Gallery in London. Their restaurant caterers - who were in the building - again had a contract giving me all liability. I had visions of the kitchen catching fire and being held liable for that. At the advice of an attorney friend, I crossed out the clause and put in a standard reasonable clause. They never said anything ... . Never realized there was such movement to try it on with liability out there!
A: Michelle Singletary
This is exactly what I'm talking about! But often a lot of people don't have the confidence to read through a contract.
Q: College choices
Hi Michelle, I have always been very upfront with my kids about how much money we would spend on college. I have always told them, from a very early age, we will pay in state tuition. If they want to go somewhere else they would have to get scholarships and scholarships are based on their hard work. My oldest is now a senior in high school. He has worked hard and is getting to attend a private university that will cost us less than our in state tuition. I am amazed at the number of parents that are sending their children to pricey universities and are getting loans. The message seems like these parents are concerned where their kids go to college is a reflection of themselves and their own worth.
A: Michelle Singletary
I'm with you!
Q: Tiffany's dress
Many of my clothes are 10, 15 and some are even 20 years old. I buy good quality, take good care of them and love my old friends. Fast fashion is also very wasteful.
A: Michelle Singletary
Q: RE: Relocation
When I think about it, I also think about other things I do in DC and the cost/availability in other cities. For example, I LOVE the free military band concerts in the summer, Smithsonian museums, walking the mall, etc. Most of my entertainment in DC is free or fairly inexpensive (except my guilty pleasure subscription to the NSO). All of that is either unavailable or fairly expensive in other cities. So, for me, those expenses somewhat level out the other expenses. But it might not for others.
A: Michelle Singletary
Good point. But even when there isn't such things, you can find other things to entertain yourself.
Q: Double the advice to check withholding...
I did it a few weeks ago and upped my federal withholding by about $40 a month. Not a lot. I could cough it up next spring if I had to, but I prefer the withholding. To me, that take home amount is mine, for spending and saving. If I can't spend it or keep it or invest it, I don't want to see it. Just easier that way. I really respect people who are living in the gig economy who can see it and know that a big chunk of it is going to be gone each quarter.
A: Michelle Singletary
Thanks for sharing.
Q: Ever feel like you're an outsider?
Thank you for the weekly dose of good news and advice. I'm struggling today with what seems to be routine criticism from some co-workers. I drive an 18-year-old Honda CRV and bring my lunch every day. My clothes are appropriate, but not fancy, and I don't wear jewelry except for small, gold post earrings and a wedding ring. I don't want to go out weekly and spend $25-30 on drinks and appetizers. My co-workers think I'm antisocial and a cheapskate, though I contribute generously to office pooled gifts, and the like. How to deal? Just ignore? Try not to care? I feel like a teenager again! Thanks.
A: Michelle Singletary
I so get you. I was you. But the co-workers who really knew me and knew my heart didn't try to shame me when I wouldn't go out with the group. So just like when you were a teenager remember it's more about them than you.
If you are a good person and you engage them, ask about them, treat them with respect than ignore.
And have the last laugh all the way to the bank.
Q: Student loans
I've been out of law school 11 years, federal employee 10 years, and still have 70k in student loans. I never qualified for the Public Service Loan Forgiveness Program because of household income levels. Now, that income level has been cut by 50%, and I'm going to apply again. But I'm concerned the income based payments required will be more than I can afford, as I live in a high cost of living area. Suggestions?
A: Michelle Singletary
There are various income repayment options, try them all.
If the payments still come up too high then it's time to think outside the box. Roommates, moving in with someone, etc.
Go back through your budget and see what you can cut, live without.
Q: 529
Hi Michelle, We are thinking of sending our son to a camp this summer that is eligible to be paid with 529$$. He is in 11th grade. Should I take the money from the 529 and then just replace the withdrawal with a deposit (we could come up with the cash)? If it matters, we live in Virginia and are aggressively saving money in this account currently - we are putting $800/ month away at this time.
A: Michelle Singletary
Either way, it's really the same money right?
Me, I would leave the 529 money alone and pay for the camp out of pocket. Let the 529 plan money continue to grow.
Q: How to offer money to adult child
When my last parent died, I inherited more than $250K. I have an adult son who is planning to go to graduate school. I offered to pay the tuition, and he accepted. I want to offer to pay his living expenses so he can go full time instead of part time, but I don't want him to feel like I am shoving money at him or trying to direct his life decisions. He has always been a very responsible, self-supporting adult. Should I stay out of this? Or is there a way to make the offer politely, with no strings attached? We have a good relationship, and I don't want to make it awkward.
A: Michelle Singletary
Make the offer. Make the offer.
My husband and I are paying for tuition, room and board for our daughter who is grad school. She has NO problem taking the money because how else would she pay? Loans? And we, like you, want her to concentrate on her studies and non-paid internship.
So tell your son, just what you told me. You want to help. You want him to be free to study and make the most of graduate school. You can make the offer with no strings attached by making the offer with no strings attached.
Q: Consumer Counselor?
What is this consumer counselor who reviews contracts?
A: Michelle Singletary
No, it's my wish to create such a position.
We were talking about what we would do if we had Bill Gates type of money.
If I had Bill Gates money, I would open up a financial wellness center and hire folks who could help consumers look over contracts before they sign.
Q: Piggybacking
When I was in college, a number of kids had parent-sponsored credit cards and their favorite thing was the group dinner, which they charged to their mom/dad-card while collecting money from the rest of us.
A: Michelle Singletary
Exactly! And then they come young adults used to charing group dinners and they take that behavior into their lives but without the resources of their parents.
Q: RE: 529
It's not the same money. The money put into the 529 is tax deductible (up to a limit) in VA, and can be carried forward. Money paid straight to the camp is not tax deductible through the 529 (not counting various flexible spending accounts). It probably isn't a big difference, but taking money out of the 529 and putting more in makes more sense in the long run.
A: Michelle Singletary
The money put in a 529 is after tax money. Earnings grow tax deferred and if used for qualified expenses is not taxed.
Some states allow you to deduct contributions from your state taxes.
So yes, might be a small tax deduction but depending on when the money is replaced gains could be lost when compared to deduction gained.
Q: Student loan consquenses
Hi Michelle, have you ever written about how repaying student loans has delayed other life milestones? For instance are people putting off living a lone, getting married, or having children...it's an interesting thought?
A: Michelle Singletary
Yup. All the time.
Q: My turn to answer your question!
"My husband and I are paying for tuition, room and board for our daughter who is grad school. She has NO problem taking the money because how else would she pay? Loans?" Yes. Or assistantships. Or scholarships. Or savings.
A: Michelle Singletary
She already has to do an internship and it's a nonpaying one.
She got scholarships but not enough to cover everything. She uses her savings to pay for her books.
Folks there are NOT enough scholarships for every kid to to to college without paying. And unless your child is a rock star when or how would they be able to save enough to pay the full cost of college or grad school?
They wouldn't.
Thank you all for joining me today. Really appreciate the questions, comments and tips.
Such a great forum. Please come back next week and bring a co-worker. You can eat lunch at your desks while chatting with me.
— Michelle SingletaryncG1vNJzZmivp6x7uK3SoaCnn6Sku7G70q1lnKedZK%2B2v8innKyrX5i8rbvRZqafZZ2ku6bFjKWgr51dqK66edieqmasn2LBqbGMbWdpaF2Zv6a%2F0mhpaWloZH10e49xZpybaWivo7DCZmlrbWBifnKxl2ZwbW6TYoZ1fo9pbWmbkmyvpavLoq2enJmosLa%2F0qKmp2aYqbqt