Crisis-Proofing Your Finances with Michelle Singletary #373

Show as well. And Michelle She She's written multiple books on personal finance, and her latest book, What to Do with Your Money When Crisis Hits, was just published last month. Not only is it an incredible resource for folks who find themselves in difficult times right now, but it's also just chock full of practical money advice, uh that you know that we believe everyone should be incorporating into their lives.

It's kind of the financial advice that your grandma would approve of, right is that We're excited to get to talk to Michelle Singletary today and learn more about our books. So Michelle, thank you for joining us today. Oh, thank you so much for having me. Michelle. We are so glad to have you. You are a personal finance icon, I would say this, don't that sounds so old? No, No, it's just because you've been doing it so well for

long enough, and you're not You're not old. You've got plenty of years left in year to like establish that personal finance yon status even more. But but hey, so Michelle, the first question we ask anyone who comes on the show. Matt and I we like craft beer something we're into, and we drink a craft beer on most episodes. But for us, it's something that we're willing to splurge on in the here and now while we're also trying to do a really good job of saving and investing for

the future. So, yeah, do you have something like that that a splurge or craft beer equivalent? Okay, so this is not going to go over, but my hobby is saving money. So if you ask, like my husband and my kids what I splurg on, they would just roll there. I think probably multiple Scrabble dictionaries maybe the only thing.

I just don't have a lot of things that I really want to be honest, I know it's terrible, but I just think multiple scrabble dictionaries that's the I mean to me, that sounds excravagant, like I would never buy that. So yeah, you know, I think I get it. I have a mini one and a big one, but I M I just don't. You know, it's so interesting you ask that, because when it comes time for holidays or Christmas or my birthday or anniversary, my kids and my

husband like, go, what do you want? And I just can't think of anything because I just I'm so comfortable in my skin, and I'm comfortable with the things that I do for people as enjoyment. And I know I don't want it to sound so pious, but when you don't come from a lot and you just spend your whole life trying to create financial security, when you get secured, that's sort of the gift itself. And I just I don't want any jewelry or clothes, or a certain kind

of car, or even craft beer. I don't really drink, but if I did, it would be craft beer. Um. And I just don't want for anything that's awesome. I think that that says a lot about who you are as a person. And I mean, and I picked up

on something there too. You mentioned how just your ability to help others, And I think oftentimes when you are comfortable when you are in a position of just where your finances are solid like that, oftentimes you can look to other people and find ways to enrich their lives. That's certainly something that you've done over the years. You've been writing just great money content now for the Washington

was for years. You know, can you tell some of like the early Michelle singletary story, what got you interested in money in the first place, and then you know what spurred you on to actually write about it? Yeah, so I was. I came to live with my grandmother, who we called Big Bama, when I was four, and there were five of us who ended up she took in, so my older sister who was eight, I was four. As I said, I had a sister who was three, and grand brothers who were just under two, and so, um,

we came to live with my grandmother. And my grandfather, although a good guy, just had you know, he had a drinking problem, so he didn't always come home. He didn't always come home with his money, and so my grandmother had to make do caring for us with the money that she earned as a nursing assistant in a hospital.

And my grandmother also didn't take the welfare cash payments because she was just so proud and she didn't want them in the house and telling her what she couldn't couldn't have, and so just her salary she raised us. And I just I learned at her feet. I mean, my grandmother if she held a penny Lincoln with screens and she and the thing that I learned from her is that she never apologized for what she couldn't buy us.

You know, sometimes when you grow up poor and your parents can give you, they just feel always so sorry about that, and you pick up on that as a child. She never felt sorry that she couldn't buy his brand name sneakers, or we didn't have a lot of clothes and things like that, because she just said, listen, this is all I can afford and we you need to be satisfied with that, and I need to be satisfied with that. And that's what I picked up for my grandmother.

So now fast forward, I'm working for the Baltimore Evening Sun covering you know, comps and county government, and the business editor, who's a female, uh woman, came up to me. Uh it was a Patricia Fanning. Um. She said, you know listen, I'm trying to rebuild the business section, and

I want young people, I want blocks, I want women. Um, you know, she just wanted to create a diverse staff because back in the day, the Business section was all about, you know, just business and investing, and it was just's just be clear, it was just white guys, right, older white guys, and oftentimes it was people towards the end

of their career. That's it was a comfortable place. You didn't have to work weekend, you didn't have to work holidays, and so it was kind of a place you when you did good work, but you would kind of on your way out to be tied. And when she asked me, I thought trying to tell me something. She said, no, no, dear, And so I went to work for the Business section. And then because of my work for the Evening Sun, I got noticed by the Post. They offered me a position.

I took it. And as I'm I'm very baltimorean, so very down the earth, and I go to Washington News or and where people are having these power lunches and I'm bringing my bag lunch to work, eating at my desk, and you were like, you want to go out to lunch. It was like, you people are insane all this money that y'all spending or eating and things. And I would just talk a lot about saving and the things that my grandmother taught me. And these people are looking at

me like where did they get this country bumpkin? And then my business editor said, you know, you tell all these stories about your grandmother and how you got you were raised and money issues, you how to just write a column about that. We've never had anything like that in the business section, just a personal finance column about what it's like to be raised, you know, African American in Baltimore, any city. And I wrote that first column.

It was called Big Mama's Savings Grace I'll Never Forget. And at that time, you know, we weren't into like instant messaging and email, so people were actually sent letters. They've got so many bags of letters that it was just unheard of that somebody in the business section was getting all these letters from all across the country. People had picked up the column from different sites, and um, they were just like, oh my gosh, you're writing for me.

And they understood that that I was a black female, but they were like, yeah, I had a grandmother like that, and she was Jewish or I had you know, a pop up like that, and it just that's sort of how I got into this space of personal finance, just by living among my peers. The things that my grandmother

taught me about many. Wow, your grandma sounds like such an incredible woman, And yeah, can you share maybe like some of the I love what what you mentioned when you're talking about like to not be ashamed of the fact that you can't spend money on certain things. What else did she teach you that you still live by today or that it's still just incredibly important principles for you? Well, oh so much. It's just like, um well, the one

thing she taught me that I have lived by. So my grandmother taught me that the moment you get your first paycheck, I don't care what is the what is thought if you get it in cash or a paycheck, you put aside a certain percentage of that check or that you know to post every single time you get a check. And I started working on it's about fourteen.

I was a mentor tutor, um so some other children. Uh, and so from that very first check, she taught me how to put somebody aside, whether it be ten percent or twenty She's like, even if it's just the dollar, every piece of money that crosses your palm, you shave

off her peace for saving. And so when I graduated from University of Maryland College Park, and I went to work full time for The Evening Sun. My first day, I covered this huge fire in downtown Baltimore, and it was just like you know, I was reading the midst of it, and my story made the front page, of course, and I called my grandmother and I said, oh my, but my mom, I'm on the front page of the Evening Sun. She says to me, did you go up to hr and make sure that she took part of

your paycheck and put it in the credit union? I said no, did I tell you all to click? And I said that this woman hang up with me. I thought, okay, it was must have been an accident. So I called her right back. I said all the phone was got disconnected, and I started to tell her about my big story, and she says, did you go make sure that a part of your paycheck has put away in the bank.

I said, now I had time to do that. Click up, I said, I So I left my desk at that moment that my big day, and I went up to HR and I made sure that a portion of my paycheck was put away. Then I went back to the newsroom and I called her. She asked the same question. I said, I sure did. Now. She said, now tell me about that story. And I've lived by that everything I get. If it's a book of ants, it's whatever I put money aside right away. Always, I don't splurge

at all. And that was the key part of what she taught me. And then I think secondary in my my grandmother just always talked about not giving in to peer pressure as a child, as a teenager, as a young adult, as a you know, working professional. You just do what you can afford and don't worry about what anybody else says, and not just live my life like that. You know, I work at the Washington Post. I've been

on you know, big news programs. I've been you know, when when Oprah had her television show, and I remember when I was going to be on the Oprah Show. My nephew was like, oh, you're a big time now. And that time I was driving some used car. He said, you need to get a new car because this is your life now, and I was just like, nope, just driving this old car. In fact, I didn't even get my hair done for open show. I was the same outfit I had in one of my car in my closet.

Because I said, Oprah hasn't something anything that I woren before. I did not make a big deal about it at all. And that's just that's something that I learned from my grandmother. That's that's awesome. I mean, so, yeah, you mentioned peer pressure even from your nephew. You know he's trying to

pressure you and car. But you know, you've been in the space for a while now, Like, what are some of the different changes you've seen over the years, either in the personal finance space or you know, even just in our culture today. You know that you feel it has made it harder to convince others to make smart moves with their money, right, Like, obviously peer pressure has been around for forever, but do you feel like that you've seen certain aspects of our life just kind of

ramp up in the in the recent years. I think with the advot of social media, uh, you can see more of what people are doing twenty four seven, So you know, We always had the television shows of rich and famous shows and things like that that kind of press you in commercials. But now you have it not just on our television, but now we have it every time we look at our phone, you know, every time

we sign onto work. You know, you have ads falling you across platforms, and so there's more of a barrage of what you have isn't good enough that you need to update and look at this thing, look at these cool people. Um, you have influencers who um or paid to wear certain things and do certain things that make you feel like you're missing out, even with Facebook and

Twitter and Instagram. UM. One thing that struck me with my children because obviously my husband I have raised them similarly to how we were raised and how my grandmother raised me. My children, first of all, we we forbid them to have social media when they were young, but they decided on their own, um, when they got older and they could get it, that they wouldn't do it. And my oldest said to me, Mom, I really don't want to be on Facebook because all people ever do

is post about stuff they're doing, like they're bragging. And that just always made me feel bad that I couldn't do something that they were doing, and I didn't want that coming into my spirit. And so my children on their own decided that they didn't want to be on those platforms constantly being sort of one up by friends and all the things that they do, because that's really what most people are really doing and kind of just bragging,

look at my life, look at where I'm going. And I think that has put extra pressure on folks to um do some things with their money in their life that they're not ready for. You know, I'm a big component of a home ownership, but because of all these things that you see, you should have a home, You should have a home, and people jump out there sooner than they're ready, or they have to take vacations when they really need to be paying off their credit card debt.

And I don't know, I don't necessarily blame them because they there is a masterful machine out there to get you to feel unsatisfied with what you have. I think I think you're spot on. I think we all feel that to a certain degree. And I think social media is one of the biggest culprits, and the Internet certainly

can help us feel connected in some ways. But there are a lot of downsides to our constant connecting this to Michelle, Before we dive into more about your new book, What to Do with Your Money When Crisis hits, let's touch on another crisis that some people find themselves in. I was just like really kind of struck by um reading about your work helping inmates, that that's just like really important work, because I would imagine life is just so difficult for men and women once they get released

from jails. Like, what's your work look like when yeah, in that capacity? Yes. So I have a financial ministry at my church and we meet once a month for a couple of hours actually about three hours to be HONESTUM, where I teach classes about personal finance, and it's part of that my my church requires every ministry to have an outreach, and I would have done it anyway, but we chose to prison outreach. So my husband and I visit.

We actually when we could, UM pre pandemic, we would go to correctional institutions and teach our classes and a re entry program. So the programs that are set up to help people who are about to be released from prison. UM, how to you know, handle work? How to handle, you know, personal crisis that happened. And then we do the financial component. So we teach a series of classes to them. Um, so both men and women, about how do you get rid of a sense of entitlement, how do you make

better financial decisions? We teach class on credit, how to rebuild your credit. Um, we teach a class on loving money. Like, you've been in prison for ten years and you've had you had kids before going in, and there's a lot of pressure for once you get out to make up for that time by buying people stuff and and doing things that they can't afford just yet. Uh and so uh, it's it's such a rewarding work. Um. I just I can't even express how wonderful it is to go into

the institutions. And I know people are thinking, but didn't they do a lot of bad stuff? Yeah, they did, and they're paying the price for that and they're gonna come out. And we want to make sure that when they come out there as they are as whole as possible, because if we don't have programs like this, if we don't allow them to take classes and have some things inside the institutions, then how are they are going to rejoin society in a way that will be a contributor

to us. Otherwise they're gonna go back to doing the things they did to get in prison in the first place. And so this is a throwaway population. People don't want to help them. They don't think that they deserve help, but they are going to get out and and we have to help them because they are. When we help them,

we help ourselves. And so when people criticize you know, programs for for prisoners or you know, um uh, people who are formally inconcerated, they're not sort of thinking, well, okay, altruistically, but how about we just think if we don't help them, they're gonna be criminals again. And that doesn't help you. Um but I want to help them because I if you hear a lot of their backstories, right, they come

from broken homes. They come from homes where they were abused and you know, single family homes where there wasn't enough money. And so those who are in there for drugs selling often resorted to that to put food on the table for their siblings. That doesn't excuse their behavior, but it does explain it. And when you listen to

them and you work with them. It's very well warning to know that you can change somebody's life and the trajectory, and when you help them, you help their family and their children, and you can break the legacy um that has created that has been created in a lot of their families. And so it is one of the proudest things that I do that I just I feel like

it's just it's really good work. And when you know, maybe we can't help a hundred percent of them, but even if we just helped ten percent, that's a huge difference. These are people to who made really bad choices, but we still have to help them. Well, Michelle, we're glad

to hear that you're doing that. You're obviously providing hope for those you know, those inmates who you're working with, and uh, you know, you've also provided a lot of hope for folks with your your new book, What to Do with Your Money When Crisis Hits, And we're actually going to dive into that. We're gonna talk about that right after this break. Alright, we're back from the break. We're talking with Michelle Singletary, one of the greatest personal

finance writers of all times. She definitely on the mount Rushmore of Personal Finance, and Michelle, you just recently published your new book, What to Do with Your Money When Crisis Hits. Obviously, COVID produced a health crisis that led to an economic and then a personal finance crisis for so many folks. Like was was that that primary motivation behind writing this book? It was so I wrote the book with the idea that I didn't want to just

discuss the current crisis, the pandemic. Um. It's horrible. It just caused such economic dismay for so many people. You know, millions of people lost their jobs um in addition to dealing with health issues, and that there's a cost to that. But I wanted to just remind people that this crisis will pass and there'll be another one, and I just

need you to be prepared for that next one. But not out of fear, right, because I was thinking about how do I explain this book so that people don't get scared because you use the word crisis and already your you know, anxiety levels go up, right. But I thought about it in a sense of the people who work in fire stations, the men and women who fight fires.

They have all their equipment ready at a moment's notice, right, the hoses, the trucks, everything is positioned for when they get that call for the fire, so they can be in that truck and on the street and a moment's notice. They hope that there will never be another fire. It would not be prudent for them not to prepare for that next fire. That's what this book is, Right, you don't want it to happen. You just really hope it doesn't. But you know that there's gonna be another financial fire.

Maybe you'll get a little scorched, or maybe things will burn down in terms of you've lost your job, but you've got to position yourself. And just like those firefighters, sometimes they contain that fire and sometimes it's too overwhelming and doesn't that is that exactly what happens in people's lives, but it doesn't matter because they're still prepared no matter what. And that's what this book is. It helps you to prepare, not out of fear, but that you need to plan.

So that means that as you're going through this crisis, and that's the first part of the book, it's like, Okay, I don't have a job, what do I have to pay? And then as part of the book is like, Okay, I've come through this crisis. What do I need to do to make to to make up for mistakes that I made before that that last crisis? Can I do some things to put myself in a better position? And there are some things that you can do. And even if you say, like a crazy person, which is what

I do, you still might not have enough. But she'll still be able to weather that storm a little bit longer. And that's kind of the focus of this book, that's right. Yeah, Well, let's le let's kind of talk about some of that crisis section the show that you've got in your book.

You know, it's it's it can be hard, I think for folks to know which obligation is to prioritize when they're in that state of dire need, right, And so you actually have a sort of a triage list that you run through in the book, and so let's let's talk about that, which which bills are important and then which ones do you think should fall by the wayside

when those hard times hit. Yeah, I'd like to start by even just explaining what triage means, just assuming that everybody knows that, and so I not the idea um from when you visit an emergency room, right and it's not show you broke your ankle, and you're there and you're waiting and you're like, oh my gosh, when are they going to ever see me? And then someone comes in and they take them right back and you're just like, wait a minute, I was here, what is wrong with

you all? But you don't know that that person is having a heart attack? And so they when you have a crowded emergency room or not a lot of staff, they have to triasge the patients who are the most critical. Let's handle them first. Does that mean that you are not important or that we shouldn't get to you, But

we can't get to you right now. And that's how you have to think of your bills when you've had a disruption in your income or you've been laid off of furloughed um, and so you have to look at the things that are the most necessary for you, food on the table, roof over your head, covering utilities, you know, paying that car note if you need that car to go look for a job, and other bills need to

just be forgotten for right now. Now. I say that saying I'm not saying that those bills should not be paid, but the reality is, if you've lost your job and you only have two hundred dollars, I don't need you to pay that credit card bill. I need you to put food on your table. And you have to be okay with that. Because what happens often is and we drill it. You guys do it, I do it. We

drill into everybody's head. Pay your bills one time, do whatever you can cut costs, you know, cover that stuff, get going, get going, and so that when a crisis happens, people try to pay a little bit on everything because they don't want to be that person that's reckless. But this is not being reckless. This is being a realist. Right. You only have so much money, and so you have to treat off your bills, and you can't let those less critical bills make you put them ahead of other things.

So if you got a limited amount, talk to your landlord. Pay what you can, but you gotta you gotta feed your kids tonight, and that's what you focus on. And later, when you get employed again and back on your feet, I can I can help you build your credit back up. I can tell you how to do that. It doesn't take as long as you think it does. Uh, let's just focus on the emergency stuff right now. Yeah. One of the things you talk really well about in your book too, is what it looks like to turn to

friends or family for money. That can get really, really tricky. So, like, let's say you are in a hard financial spot, Like how do you navigate asking other people to help you out? You just have to ask them, you know. Oftentimes the first thing you want to do is like, can you can you give me a loan, because you feel like people will be more receptive to that than the idea

that you're going to give them their money back. But if you've lost your job and you've had some disruption in your income and you've just fallen financially, you don't really know when you can pay that loan back, and and making promises that you can't keep is what ruins that relationship. So I'd rather you say, listen, you know, I lost my job, we had this huge pandemic. I

don't know when I can pay you back. So rather than ask for own and set up a situation where you're gonna be expecting something back that I'm not sure when I can pay. If you can't afford it, can you give me a financial gift to help me out right now? Could you pay my utility bill for a month or two for me, if that's possible. I need help with my rent this month. If you cover it this month, I think I can get enough to pay it next month. Um My kids need some things for

the summer for summer camp. Do you think you could help me pay for summer camp? And it? These are hard conversations because we are very proud people and you don't want to ask that way, but I think that's the best way. And if you're on the receiving and of that, because many of your listeners will be on the receiving end, I need you to open up your wallet if you can't afford it, I need you to give out of your extra So don't give somebody your

rent money. But I need you to hear them and if they even if they ask for a loan, you say, no way giving you this money when my husband and I don't lend money to anyone. So and we also look around for people who need help even though they are too proud to ask. This happened to us um a relative I lost her job in the food service industry, and she was talking to another relative. She would never tell us, and so we heard the story and I called her up and I asked her how much of

her it was. And I called her rental office and we arranged to pay her rent for a couple of months. And she said, oh, thank you. She's so grateful. She's like, I'm gonna pay you back, and I stopped her right there. I said, absolutely not. You will not pay us back. This is a gift and you do not ever have to think about it again. We don't bring it up to her, We don't mention it nothing. This was something we did for her, and never when we expect it back.

And you know, those people in your lives who could need help. Maybe it was maybe your very restaurant and you go to and you know the staff is only working halftime, and there's a waitress or there's somebody who you talk to all the time. You know, it's just hey, how you doing, how's it going? Is are you getting two hours? And they go no, well, you know, and then when you leave that tip, you leave enough that you know can help pay their Yeah, that's ridiculously cool.

And I mean, yeah, I just I love your attitude towards that too, because it puts somebody in a position where yeah, they're they're far more comfortable taking that money, and it's and you're saving that relationship when somewhereas that obligation can cause someone to avoid maybe interacting with you, like, um, if you if you owe the loan there, you've put them at ease, which is really cool, right, Yeah, And Michelle, another situation too, if someone has lost their job, they

might be tempted to draw on some like say some retirement funds. Uh. And so we would love to hear your thoughts, you know, on taking money, say out of a four one k, taking some money out of a roth ira a for for some of those difficult financial time. Yeah, it should be the last resort, but it is a pot that you might have to tap. And I think it would be arrogant for those of us who didn't lose their jobs, who have out of court savings, it's

say absolutely, don't ever touch that money. Well, the reality is it's either touch that money or you can't pay your It's either touch that money or you can't put food on the table. I'm okay with you touching that money. It's not ideal, but if you have to, and then if you do, don't take out more than you need, so you can take it out over time as the need arises. So if if you've been laid off and you're not sure, you know, take out off for it,

like maybe two months, but not like six months. And if obviously if you're under fifty nine and a half when you take out the money, this is gonna be so hard for people. At least, please make sure you put aside the tax obligation for that money. So if you're under fifty nine and half, there's a temper cent early primacy um and then obviously you have to pay

income tax on that money. So you want to get some advice from the plan administrator and they can give you some guidelines about how much you probably need to set aside. And then you really really need to set that money aside. I don't want you to be in trouble with the I R S when it comes time to pay that money back. Yeah, that would be really really bad situation, like you're putting yourself in another crisis.

Then essentially, when when that hits and Michelle, in your book, there's so much good just like regular personal finance information too, And we want to get to kind of some questions that we have for you on that, including like one thing about discounts making us dumb. Those are my favorite lines in the book. We'll talk about that right after this break. Al Right, we are back and we're talking with Michelle Singletary. We're talking about crisis proofing your finances

and Michelle, you know, managing our money. Well, that's one of the steps that we can take to avoid getting into a fine actual crisis to begin with, right. Uh. And budgets they're an important tool. Uh. And you say in your book that if you like being broke, then don't budget. Uh. But uh yeah, so it's just really important. Something that stood out to us though you don't give a whole lot of credence to the different budgeting apps, you know, like going with the latest new software or

this new program. Why is that? Can you explain that son to our listeners? You know, people are always asking me, Okay, so what apps should I use to manage my money? And I just got I don't know, pens on paper that's what I use, and I get it people want that cool tool and they are cool, right. I you know, I have a couple that I just use out of fun um. But here's the thing. This is why I tell people all the time, it is not that app that is going to make you manage your money better.

By the time people want to use an app, they have become motivated to get their financial life together. And and this is an example that I use, like, and I know a lot of people out there are gonna be in this position. So you buy that treadmill or the exercise bike because you ride it every day, exactly right, And what doesn't end up happening to be a close hanger? Right, And so that that treadmill and that bike can absolutely

help you get in shape. But if you don't have the motivation to use it, it's nothing but a clothes hanger. And that's what the budget apps are, right. And so you would need to first most importantly, say I want to have control over my money. And then once you

say that, it doesn't matter what app you use. Like I said, I'm sitting talking to you right now, and in front of me is a little red notebook that I got at the dollar store, and I write down my financial stuff and things of financial stuff I have to do, Like right now, I've got to move some money into a fund um and my my self account. And I wrote down, okay, call the company. And I'm not using no apps. I'm not on the Excel, I'm

not on anything. I'm not saying I don't use those tools and not or north should you if you line one that you like. But that is not what makes you a good money manager. It is it starts with your mind and your mind set. That is the tool that will help bring you prosperity. Those other things are bonus. They're helpful. Um. And so I don't really care what you use, right because you see all these ads and this is like grant. These things have slice bread. It

is for the people who are already motivated. But the people that I work with, you're not. Let me put it this way. You're not broke because you don't use a cool app. Ye, You're broke because you're not budgeting in general. It's all right. So let's get to one of my favorite lines in the whole book. It just stuck out to me. He said, discounts make us dumb. What do you mean by that? Because I like a deal from time to time, Michell, I'm not gonna lie. I'm not saying that I don't. I like I use

coupons too. Um. But one of my favorite books called Dollars and Cents. I love this book and I actually reference it to it in my book, um, and it was talks about behavioral economics and how we are so concentrating on a discount that we don't realize that they make us dumb, that they use the lore of a discount to get you to spend and spend more than you intend to spend. Let me give an example. So you go into the store. You're only gonna go get

one pair of shoes. Your kid needs a pair of sneakers. They only need one pair of sneakers. They only got one pair of fee. And you go to the store and that says, well, if you buy this pair, you can get this pair for half off. And you're thinking that's a deal, but is it. You only went in it to get one pair of shoes. Now you have spent, even at what might be considered fifty off, more money

than you intended to go into that store. And that makes you, I hate to say it, dumb, right because they are using you, and you know darn well that they have priced both those shoes still account for that discount, you know. And then we concentrate on that so much that we you know, um, like the reward call credit card reward cards, people like just they're so proud of all those award points that they've accumulated. Now, how exactly

did you accumulate those award points? You spend money on a credit card, right, You've got to spend a certain amount of many right, um. And and study show that when you use plastic, you tend to spend more than you use cash. So they've built all of that into all of these things that you think and you're getting a discount on. And so it doesn't mean that you shouldn't take advantage of discounts, but just understand that that there is a method to their madness to get you

to overspend. That's right. Yeah, they're playing chess while you're playing checkers. You're looking at that deal, but they've already two moves ahead of you, two in three moves ahead, if you're right, you know what I mean? Even grosser store keepons people clipping, and you know, and you're buying all this stuff, and you know any of those keepons if you know you have to buy more to get that fifty cents off, or they had ten four dollar or ten for ten dollars, but you only need one can.

So you in your head you're thinking, I gotta buy those ten to get that discount, but you don't right um. And sometimes I even have to stop myself. It's like, go three cans for X, and I said, well, I'm making a stew for example, but I really don't need those extra two cans right now. And if you really look at says and then they do divide it up by that three, so you're not over paying if you buy just a one um. And so you just have to continually talk yourself to do I really need this

um even if it's less money. I'm still spending money on something that I never intended to spend it on. That's right. Yeah, So, Michelle, let's let's talk about a relationship to with debt. You wrote an article at one point that was titled if you're in debt, you don't deserve a vacation. Readers didn't really like that one. I'm sure you have to push back on that one. But your thoughts on debts. You know, ass treating yourself when you've still got some debt lingering in your life. Yeah,

that I knew I was being provocative. I did not know that they were gonna put a hit. Oh my goodness, you would have thought I'd slapped somebody's baby. I mean,

and I was trying to be provocative. I'm not gonna lie I was, because what happens is I hear people say all the time when I deserve this, and I work hard, and I deserve this, And I'm sure you do work hard, but you don't deserve to be in debt and you don't deserve that vacation that you can't afford when you've got credit card debt that you need to pay off. Or people will say, I say for my wedding, but you have ten thousand dollars in credit card debt. So that doesn't sort of mesh with me.

And so I like to joke that if that was a person, I'd slap it. I hate that. I hate that it limits your choices. And so what I was trying to tell people is that you can have a vacation when I'll spending money, um that you don't have

that you need to put towards reducing your debt. And this goes back to you know, when we talked about the things that my grandmother taught me about being satisfied where I am, and so we have in this country talk told people that a proper vacation is that you've got to go somewhere, you gotta spend money, you gotta do this, when in fact a vacation really ought to be I just need time away from work. I need to just be peaceful. I could walk through my neighborhood,

I could sit on my porche. I could you know, call friends. I could spend time playing games with my family. Um, the most important thing you need to do is to get your finances together so that when the next crisis hits, you can weather that storm. And so if you have a lot of credit card debt, I'd rather you spend that time taking that money that you would have used

on a paid vacation and bring that debt down. And I know that it might mean that you don't take a vacation for a couple of years, but it's only for a season, uh, And that during that time that you get rid of that debt. By the time you do have the money, need the cash, to freedom to take the vacation. It will be a sweet time because you don't come back to that debt. How how much nicer to take that vacation knowing that you actually have the money in the bank to pay for it. Right,

That's exactly right. That's exactly right. And at what point in the book, Michelle, you say debt is debt and you don't distinguish really between good debt and bad debt. So I find that interesting because there's definitely you know, some people, especially Matt and I is real estate investors. We have a slightly different take on debt where mom and popularistate investors, not noth these like big time guys

with hundreds of units or anything like that. But debt debt is different in the real estate space, I think um at times. So yeah, well, what's your take on debt? When you say debt is debt, do you distinguish in any way between certain kinds of debt that maybe makes sense for individuals at a certain point in their life, or or not at all? You know, I love you guys, right, talk about you're welcome, You're welcome to throw us under the bus. Too if you want. So here's here's my

strategy about talking about debt. First of all, it is there is no such thing as good that and bad dad, because we're scribing adjectives to something that nobody likes. I mean, you you use that to get some things that you want, like a home, but you don't like it. You don't feel good about it. You know, when you write that check, you are not skipping through the bed to the mailbox going I love that I have to pay this interest on this money. Isn't this glorious? No? You know. And

on the other side, you know, bad dad. What is that? It's still just debt. And what I try to get people to think about it in a sense of debt limits your choices, particularly doing a crisis. Let's just look at the pandemic and landlords for example. And so I tell you I talked to a landlord from North Carolina, sweet guy. I did a column on it, and he has multiple properties, you know, small um, you know, not

some big conglomerate. But he said that I told myself that I wanted property and that I was gonna make extra payments so that I could pay the properties off as quick as possible, so that in the times of trouble, I don't have to press my tenants because they're all good people. He chooses his tenants wisely, and he said, when they are at their lowest, I don't want to be that landlord that says, give me my money or

get out. And he was able to give his tenants breathing room at the height of the pandemic because he didn't have loans on those properties, and lots of landlords had properties that they need every dollar of that rent or they're gonna go under pretty quickly. And and that's

that's not a wise use of debt. So I just try to get people to get out of debt so that that when that next crisis happens, and it will, you as a landlord, could be more magnanimous to your tenants because you don't have to worry about the mortgage you have to pay. Now, that's not to say that you you know, you may not be there yet, but I hope that you you strive to be there so that you don't have all that financial pressure. You have breathing room, so that you can be humane during a

time that was inhumane. Man, Michelle, your generosity of spirit. It just comes through um in in this conversation. It's been an absolute pleasure to chat with you. So much wisdom and and just so much humor. So thank you so much for joining us. Like where where can our listeners find out more about you and uh in your new book? Well, first of all, I love you. Follow me on Twitter. It's at singletary. M That's the platform I like the most. Sign up for the Washington Post

and get my columns and newsletter. I have a weekly personal finance newsletter. Of course, there's a book where you can get it all major bookstores, independent bookstores and hey, listen, if you can't afford the book, get it from the library to right completely okay, don't tell my publisher, but I'm completely okay with that, right. I'd rather you have the knowledge to worry about the fact that you can't buy the book. Yes, I love that, Michelle. This has

been a joy talking with you today. We appreciate you just yeah, giving us some of your time. This has been a lot of fun. Thanks again, thank you for having me all Right, Matt, what a great conversation with Michelle. Super awesome human being and just like super knowledgeable when it comes to personal finances. Also, I can't wait till they actually get that mount rushmore personal finance up because

she's definitely gonna be and we'll deserve to. Well, there's yeah, and there's a difference to between being you would you said iconic, right, you want to be iconic. You don't want to be like a legend, because when you're a legend, that that means you know your your your best years are behind you. She's not a legend, she's iconic. She is she'll be a legend thirty years from now. She's at the top of her game right now though, exactly. All right, So yeah, what was your big takeaway from

that conversation? Okay, well, so I've heard this before when it comes to loaning money to friends or family to to try not to actually lend them that money, and

if possible, just give them that money. Hopefully you are in a financial position where things are solid in your life, and by giving them that money, right, by gifting it, there's a much better chance of you maintaining that relationship right without things getting weird, without the dynamics suddenly shifting, because all of a sudden, you know they're thinking that you're about to ask them, They're like, hey, are you able to pay back yet? So they're not coming over

for dinner. Even if you're not thinking that, uh they that might be on their mind. But then you might be thinking things right because you might see them spend some money, or you might hear them maybe going on a small trip or something, and you're thinking to yourself, wait a minute, like you you still owe me money. And so I've heard that you can't afford to go to Tahiti. Yeah, oh of course not. Yeah, uh so

I've heard that before. But one of the things you said that really stood out to me was to actively look for individuals to help who you're pretty sure might be hurting when it comes to their finances, right. I mean, we've got a lot of relationships in our lives. We know what folks are up to, we know uh, you know, we're familiar with the different industries that have suffered recently, and it aside from pandemics and massive crises like this, we need to still be aware of what it is

that individuals are going through on a personal level. And so I just love that Michelle and her husband are actively searching for individuals they can help. They've made this a priority in their life as to you know, what it is that they're doing with their money. And with someone like Michelle who doesn't have a splurge, I mean I would even venture to say that this is something that might even be considered a splurge and admirable splurs yes, because I think a lot of folks would say, oh,

oh my gosh, I can't believe you do that. But for her, in reality, that's something that is able to bring her a lot of joy as well. Yeah, all right, my big takeaway I will say from this conversation a lot of good stuff. But when we talked about why she wrote the book, COVID was certainly a part of that. But you also never know when a crisis is going

to hit. And and one of the terms that she used in the book that she didn't actually bring up on this episode, but she said that you need to manage your personal finances like you're in the middle of a perpetual recession. And I'm like, that's exactly how I

approach my finances. It actually made me think of when we talked to Morgan Household and he basically said invest like an optimist, but save like a pessimist, and I think that's the exact same approach, basically living like you're in a perpetual recession or saving like your pessimistic about

the future. We should all be kind of taking that route um with with our finances, investing like optimists, saving like pessimists, not sure what the future holds, but making sure that we're prepared for the event of a potential crisis. And you know what, they don't tell us ahead of time that they're coming um there. They usually kind of come out of nowhere. You know. COVID was definitely one

of those things that came out of nowhere. The recession of two thousand eight, You know that that was something that came out of nowhere. Most people weren't predicting that it was gonna happen. I could point to so many different crises that have happened over the years that people were not predicting. And then there's just like the general things that happened to individuals, you know, in everyday life too, the crises of a family member getting sick, are you

getting sick? And they're just impossible to predict. And so you need to live life, manage your personal finances, like you are in that perpetual recession, and if you do, you will be prepared when the next crisis. I mean, and you're saying not to be stressed the whole time, right, because typically from an emotional standpoint, when you're in a crisis, you feel the squeeze a little bit, like things aren't going great and you want things to kind of go

back to normal. But it's about taking the actions to make sure that you don't arrive to that point emotionally when there truly is a crisis. So yeah, man, I'm glad you you pointed that out. Uh. And actually, dude, so I just said, squeeze when you're sort of a crisis. Let's go ahead, shift gears. Let's get back to the beer that you and I enjoyed on this episode, which was called Squeezebox. Uh. This is a beer by Urban Artifact, and this was a strawberry Midwestern fruit tart that was

donated to the show by Sandra. Sandra, thank you so much for sending this one hour away. Joel, what were your thoughts on this one? Dude? This was awesome. This is a tart, funky strawberry beer. It had kind of like it was kind of thick, so I had some milkshake type qualities to it. But I personally love a beer that brings the funk, and this one brought a lot of funk. It wasn't us straight up fruit too

sweet or anything like that. The funkiness plus the acidity plus the fruit they bounced out really really well, man, I really dug it. Yeah, well you mentioned milkshake. There's actually some a good amount of vanilla bean in this beer as well, so that probably adds to the certain smoothness of it. Right, Let's see, that's what I was feeling. My palette is that brilliant, so tuned in. So, dude, I wanted to point out one thing on the can here. Uh,

they tell you the acidity of the beer. I have never seen a brewery that put the pH of the beer on here. And so this one is a three point four seven, which is so when when it comes to acids and bases, like, the lower the number, the higher it is in a cidity. Right, And so I'm kind of a data I'm a I'm a numbers nerd, and so for me to see that number on this can,

like it provides a frame of reference. And now any other beer I have that actually does happen to have the acidity level on there, I'm gonna know where it stacks up against this one. I think that's really cool, man. I've never seen that before, and I think more breweries should be doing that. There you go. Yeah, I'm done with more. The more info. It's interesting info, something I never would have. Let's get scientific about it. Expected my beer can. But that's really cool. And yeah, big thanks

to Sandra for sending us this beer. But that's gonna do it for today's episode. If you want to know where you can get Michelle's book, well, she mentioned the library, but you can also buy it if you want. We'll link to that one in our show notes up on our website at how to money dot com. That's right, man. So that's gonna be it for this episode, Joel. Until next time, Best Friends Out, Best Friends Out,