So then you need to look at your budget and put in places where you can keep your money low. So how much you spend for a car and things like that.
And so you may have to skip a vacation a couple of years while you stockpile savings for yourself. It's all about looking at what's important in your life and funding that and letting everything else go. Today on Focus on the Family, you'll hear from financial expert Michelle Singletary. She's going to help you get a handle on your money. She has some great advice on managing finances, especially given all that's going on in today's world and economy.
I'm John Fuller and your host is Focus President and author Jim Daly. John, I think it's not just in the US here, but Canada and other countries. We're going through a lot of financial turbulence. I guess you would call it inflation. You know, we're paying so much for gas and groceries and all of those kinds of things. And people hear about global recession.
And, you know, this is an issue we're coming out of Christmas, people probably put too much on credit cards. And it's a perfect time to bring in a wonderful expert when it comes to how to manage your budget and how to create a budget and things like that. And we're going to talk to Michelle Singletary today. And she's got great insights and a great book on how to better manage your dollars, especially in a crisis. And Michelle's book is called What to Do with Your Money When Crisis Hits, a survival guide. We have copies of that here at the ministry. Stop by the show notes or give us a call.
Eight hundred, the letter A in the word family. Michelle Singletary is a financial columnist for The Washington Post. She has a master's degree in business and management, and she's been here before and she's always a popular guest. Absolutely. Michelle, welcome back. Oh, thank you so much for having me.
Yeah. And you also went to Johns Hopkins, which is quite impressive for that master's degree. That's amazing. We had a board member, Dr. Ken Fentress. He went there as well. And he did his Ph.D. in dead languages, biblical dead languages. And, Ken, if you're listening, thank you for doing that.
I'm sure it was an incredible journey. You heard that introduction, Michelle. There's so much fear. If we watch too much news, I mean, you can go to bed every night, you know, opposite of what Jesus told us, right? Fear not. And we just get filled with fear because of what we see and hear. And we've got to be very cautious, especially in the Christian community. Take, you know, all of this with a grain of salt because we know the author and creator of our lives and our universe. That should give us some comfort, right? It does.
That's right. But when you're looking at it, you know, our dollars aren't going as far as they used to. I think 63 percent of people are living paycheck to paycheck. And when things go up, that's a fear.
How do you first address that emotional issue of money? So you know what I tell people? To lean in to your, especially with your faith, right? Because we are taught to be faithful. But I'm scripture also talks to this that faith without works is dead.
So you've got to look at both parts of it. You want to use your faith, but there are things that you can do so that when we have times of crisis, you have something to fall back on. The problem is doing good times. We just think it's never going to end. It's always going to be good. God doesn't promise us good times all the time.
He just says we're going to be I'm going to be there. But when you can, there are some things that you should do that when those times come, you can lean on your faith because you've done all the work. So that means saving when you have the money. That means not living above your means, making better financial choices. And that's the kind of thing that both my husband and I teach.
We have a program at our church in the Maryland area. And that's what we've been preparing people for. And I tell you, right before the pandemic, I was telling people, you know, you've got to save, you've got to, you know, live more focused people like, oh, things are going great. And, you know, what are you talking about?
And sure enough, his what hit and they weren't prepared. And these are people who had the money. You know, they're they're different parts of America, right? We've got parts of America where people are just not making enough. They just making below minimum wage or below. And then there's a good part of America that is doing OK. You know, but then they overspend.
And of course, there are people who no matter what the economy does, they're going to be OK. They've got a lot of money. It reminds me of that Joseph moment, right? The great story of the Old Testament where Joseph is in Egypt and he's put in charge of everything. And he says, OK, we're going to save up. That's right. We need all the grain.
We can save up for a seven year famine. I love that story. It's a great story. I teach that story. It is because when we teach the story, it's often like, you know, prison, the palace, you know, we could teach it that way. I think it's a saving story, right?
Because when you think about it, his brothers would not have come to see him had it not been his. Their father saying, hey, listen, they got extra up there. We need food.
Go get that extra. And Joseph's doing times of plenty. You know, a description says he saved so much that was overflowing. So he saved even past what they needed. And then they reunited trying to get more. And that story is all about when times are good, you save an abundance, not just for yourself, because I really believe that you're saving should be for your family and to help others. And that's what he did, because he would have had plenty just for Egypt.
But he said, no, I'm going to do more. And I think that's the message of that story, which I just love. You know, Michelle, I hadn't thought of this, but we have so many great donors to focus on the family that write incredible checks. You know, you sit there and go, wow, how can a person do that? I'm just so grateful to them for doing exactly what you're suggesting. The other awesome side of that is the joy in which they do it. You know, some people even put a smiley face on the check, like a half a million dollar check, and they put a smiley face on it because the Lord's blessed him like that.
It's just so, man, it just is so refreshing to have a good attitude toward giving, whether it's $20, $200 or $200,000, it doesn't really matter. Let me ask you a real general question in your in your great book, what to do with your money when crisis hits. Maybe a general question.
What advice do you have for people that are hitting a financial calamity? What do they do first, other than maybe worry? Yeah, you know, well, worry is a natural thing, but we're not supposed to worry. But can I just be honest? I'm just going to be completely honest. I'm a worrier. I know I shouldn't be.
I'm a woman of faith. You know, but it's just how I was raised. My grandmother was a worrier.
She passed it on to me. And so what I try to do is get people to I don't say don't panic because that's just not where people live. So I said, you know what? It's OK. Like when the stock market is going down, you think, but you don't want to act on that panic. And so that's what I say. Feel what you feel, because you feel you want to acknowledge the pain that people are going through. And then you can come around and say, these are the things that you need to do to get out of this predicament. And that's how I sort of approach it. And it's also not a time to wag your finger at people. You know, because this financial stuff is really, really tough.
And it has nothing to do with your intelligence level. I have worked with doctors and lawyers. They just spend money and they just spend money and accountants. Can you believe it? Accountants.
I was in church one time and we were we had a little table because we were recruiting for our ministry. And a woman came up ahead of her husband with her baby in her arms. And she says, Michelle, can you talk to my husband? He is really bad with money. And I said, isn't your husband an accountant? And she said, yeah, that's the problem. He thinks he knows everything.
He handles his client's money perfectly. But how many? It's just it's a disaster. And I said that showed me that it has nothing to do with your intelligence level. Sometimes you're overconfidence.
Sometimes the men are a little overconfident. And so there's a lot that you have to do to put in place for when a crisis hit. And that's really what the book is about, that, you know, we are all it's not a matter of if there is going to be another financial crisis.
It's when. Yeah. And that's fair. You mentioned your grandmother. And I do want people to hear that story because it's a beautiful story. It's what happens in families.
And I experienced that myself. We didn't have grandparents, but I ended up in foster care and other things. But you had your grandmother, which you call Big Mama.
So tell us about Big Mama. What happened and why? Why you ended up there?
Yeah. So when there was five of us, my sister was eight. I was for a sister who was three and twin brothers just under two years old. And our parents, you know, had some issues and they basically abandoned us.
They didn't tell anyone. We were in the house. And my grandmother, bless her heart, said she had a dream. I believe it's probably the Lord talking to her.
I would think. And she said something's wrong. He told her something's wrong. She sent my grandfather over to check on us to a wellness check. And we were all in the house.
There was no food in the refrigerator. He scooped us all up and took us to my grandmother's house. And then, of course, the authorities got involved and they were going to take us to foster care because five grandchildren was a lot for her. And then she said, you know what?
They wanted to split us up. And so she said, I'm not going to have that happen. And so she said, I'm going to take all five of them. Every time I said, I can't even imagine. I have three. I don't know what those three. That's a big heart.
I mean, it's for her to say, I'm going to take all five of them. Most of us had health issues. My brother had epilepsy. My sister had really bad asthma.
I had arthritis, juvenile arthritis. So just like a lot. Right. And my grandfather, who was a kind soul, had problems with alcohol. So he sometimes would come home with his paycheck, sometimes not. But no matter what, she paid every single bill on time, no matter what.
She paid her mortgage off early. Wow. I mean, she at the way she managed money was just miraculous. I think I see where you got it.
Yeah. I learned everything at her feet. I absorbed everything from her.
And she's just the best money manager of him. I always joke that if she had a penny, Lincoln would scream. You know, and she and the thing that I appreciate about my grandmother that I only just really started talking about, because now as a parent of young adults, I get it. My grandmother never apologized for what she couldn't get us. You know, some parents like, oh, I'm so sorry. They feel guilty. They overspend because they, you know, they give in to all the materialism that is out there. And my grandmother, she said, we don't have it and I'm not going to get it and I'm not going to apologize for that.
This is all that I can give you. And you need to be satisfied with that. Well, that's good. Even having that discussion, you know, so many times parents will maybe live that way, that frugal way, but they don't explain it. So the kids don't really have an opportunity to understand it.
They just think they're being deprived. Right? That's right. That's right. Right. And you know, and kids will be kids. They see their friends get stuff.
But you're right. She talked us through it all. And I just remember thinking, OK, well, I can't do anything about it. And it's so interesting. I just had a discussion with my adult daughters because I've got this big birthday project coming in the Washington Post in January where I give advice for every decade. And so they're in their 20s and we are, you know, we taped a podcast with them. And, you know, the children don't ever tell you that they've listened to all the stuff. They just always fussing and rolling their eyes.
But when we were discussing what it was like growing up under me, it was frugal, like my grandmother. And I said, well, did I scar you? And they just started laughing. And they said, you know, we didn't like what you were saying, but now we understand because I would have all these phrases that I would use. Like if they wanted to go out to a fast food restaurant, it was like, do you have fast food money?
You know, do you have a job? You know, I always say things, you know, I would say college fun when they wanted to ask for stuff because my husband and I sent all three of them to college with no debt. And so when they would ask for things, we go, well, college fun. And they just hated it.
But now because they don't have any debt and they can do things with their money and their life that they wouldn't have been able to do. They said, you know, we now appreciate those conversations, even though they were so annoying. Well, that's good. You got them over that line. I got them over that line.
That's pretty impressive. The experience with your grandma helped you obviously to be frugal, and that is great. I think you cite a survey in the book that shows 53 percent of parents use credit cards or loans to pay for non-essential items. So speak to that misuse, I guess you would characterize with credit cards. What should we use credit cards for and what should we not use credit cards for? Well, in America, we have taught Americans to live the American dream on borrowed money.
Don't wait to say, just get it now. That's what the nation does. That's what the nation does.
30 trillion. And so we teach them to not wait. And if parents are in different situations, maybe they've been divorced, maybe they're single parents. And there's all this guilt of not being able to provide the materialistic things. I'm not talking about food and clothing and shelter, the extra stuff. And I get that.
I understand that. But when we use credit that way and we can't pay it off every month, you create this hole that is so hard to dig yourself out of, particularly when the credit card interest rates are so high. Now they're approaching 20 percent. And some people have interest rates higher than that. And so we use credit to elevate our lifestyle and then we get to the point where we can't pay it. And then you can't save for your retirement. You can't save to send your kids to college. You can't save when you lose a job and everything becomes so tenuous.
And so for my husband and I, even though we had the resources to give more, we wouldn't. And we use credit. I think you can use credit if you can pay it off the next month. It's a convenient way not to have cash in your pocket. But if you can't pay that bill off the next month in full, then you shouldn't be using that credit card.
You know, in that regard, again, the practical nature of this, I think in the book you talked about with your kids, but I guess you could do it, too, with yourself. You know, get a five hundred dollar cash card and that's your grocery card for the week or for the month, whatever applies to you. But you could find different ways to offset the ease of a credit card. That's right. Without having to build up the debt of it.
That's right. So credit is a convenience that they they teach us that it's our it's for our convenience. And so they and now they have the point where you speed up the process of payment. So now you can just tap your card. You know, I may be dating myself, but you remember when they had to pull out the machine and put the card in there and that squish squish squish sound, you know.
And then sometimes they even had to go in the back and look for the machine. So now you can tap your card and pay. You can pay by looking.
They could have, you know, open your phone and they can you could pay by looking at the phone. And so when they decrease the time that it takes for you to pay, you tend to not think about how much you're spending to get that bill. Because you get that bill because it's so quick.
You don't have time to think about. Can I afford this? So when you use cash or you use that prepaid card or even your debit card, which only has so much on there, then you tend to take a pause.
Can I afford this? But when you use credit, you don't take that pause. It's so funny.
Dating myself. I remember I left my wallet in my car one time and it melted the numbers. So the numbers weren't raised so that when they ran it over the machine, it wasn't capturing the number. And I think it took one or two merchants. I didn't know I signed the slip and I was done. But one of them called me and said, you need to come back to the store because your numbers didn't come across.
So it was all, you know, unintentional. But yeah, that dates me. This is Focus on the Family with Michelle Singletary and Jim Daly, your host. And we're having a great conversation about things that matter of finances and how you can get a handle on yours. And we would certainly commend to you Michelle's terrific book, What to Do with Your Money When Crisis Hits. And as we said earlier, even before crisis hits, get a copy of the book from us here at the ministry. The link is in the show notes or call 800 the letter A and the word family.
Michelle, I want to go to a practical question. Probably Big Mama's example is the way to do this, but there are certain things in your budget that are necessary. You need to pay your mortgage, pay your rent. You need to pay utilities. You need to buy groceries. So when you're looking at the must haves versus the wants, I mean, the wants we put a lot of like a phone is not not a necessity and especially a big plan. So describe for me in those basic terms, if we're really scratching in this economy and prices are going up, what do we focus on to make sure we do have enough budget for the things we need? So the first thing first is first is giving.
It must be at the top. Now, it's interesting when you tell that to non-Christians, they go, well, that doesn't make any sense. If you're in debt and you've got to pay all this, why would you do that?
That should come last. But I think the whole concept of time was God's way to demand discipline in your finances, because if you have to carve out that first 10 percent, then you must be a better manager of the 90 that's left. And if you only have 90 now, you're starting to figure out, well, what can I cut out? So housing, food, all that becomes important. And then you start looking at the things that are not a necessity. So maybe you need a cell phone because you want to stay connected to your kids.
OK, whatever. My kids didn't have phones until they were in high school because I figured where were they going to be? Where there wasn't an adult or somebody who had a phone. And they were probably in their middle school, honestly. And I'm not exaggerating.
They probably were the only kids who did not have a cell phone. And they fussed and I said, I don't care because we have a college fund. We got one objective.
We got one objective. And so then you start looking at the necessities, the other things that you have to do, and then you can add back in some ones. And you will never hear me tell people to not get like that expensive coffee. If that I'm not a coffee drinker, I like tea, you know, much less expensive. But if that coffee sets you in the mood for the day, you know, that good cup of Java and you're going into work and you have a sense of calmness, I'm OK with that because that that's something that is important to you.
Because, you know, if you work at a crazy place, not here, but I work at a very high, intense place. I am OK with that because that cup of coffee is not what's keeping you from being a millionaire. It's not what's keeping you from buying that home. That expense is too little. The big things, how much you spend for that car, getting that car note, that's five or six or seven years. If you need a car note that is more than 48 months, four years, you cannot afford that car. And so then you need to look at your budget and put in places where you can keep your money low. So how much you spend for a car and things like that.
And so you may have to skip a vacation a couple of years while you stockpile savings for yourself. It's all about looking at what's important in your life and funding that and letting everything else go. Yeah.
Again, good advice. It really requires some discipline. And that can be the Achilles heel for people. Right.
Just to stay disciplined. Not perfect. It's kind of like parenting. Right.
You don't have to be perfect, but you need to be in the good space. And that's part of what you're talking about with budgeting. In addition to that, you recommend three areas of triage when people are struggling financially.
So let's hit those. And particularly when you're unemployed or underemployed, what were those three? So when I got this idea, when you go to the hospital, to the emergency room and I've been there, you know, some kid breaks an arm or something and you see someone come in and they go ahead of you and you're thinking, wait a minute, I've been sitting here for hours. And so what they're doing is they're triaging who is the most important, life threatening. And so that's what you have to do with your life. So you have to what needs to be taken care of right away. Emergency fund, life happens fund.
That's something I talk about in a book. And then your savings for different things like your daily expenses and then the long term things like retirement and things like that. So you have to because you only have a certain amount of money coming in and that's what you need to do. What is the most important thing that you have to take care of? And then you go to the daily stuff and then that's when the wants and the other things come in. And in that regard, that triage, when you have debt, you kind of got to look at it. What's the highest interest? Try to pay that off.
That's what I've heard from other financial folks. Do you agree with that? You kind of look at it.
What's your attack methodology? Yeah, I don't agree with that. I'm a little different than a lot of financial experts because they're looking at the math and it does make more sense. You you line up your debt with the one with the most expensive interest rate works on paper. But we know that what works on paper often doesn't work in practice.
Right. And so what I found in the ministry that I run at my church is that when people list their debts from the smallest to the largest, ignoring the interest rate, you attack that first debt, get the smallest, you get a win. And people feel like, oh, I now reduce my debt so quickly I can go to the next one and then the next one. And I've done this year after year. And what I found is that when people get those quick wins, they become more energized to get rid of the debt and they actually get rid of it sooner.
And there have been studies that show that that this method, small to the largest, actually works. This is more psychological because of the money issue. You know, oftentimes people don't have a money issue. They have a management, a mental issue. Right. And my husband and I, when we knew that we wanted to have kids, one of the things we said is that we don't want them to have the weight of debt because debt limits your choices. Two of my kids are in professions that don't make a lot of money by our standards.
Right. One is a therapist, a social worker. The other is a kindergarten teacher. She's going to earn some good money, but not the money of your doctor. You've got to manage it.
You've got to manage it. But my daughter can be a teacher. That is her God gift to be a teacher. She I call her the kid whisperer. She'll walk in a room and I don't care how they all kind of migrate to her.
She has that spirit. But what happens when people say they want to be a teacher? What's the first thing people say? Well, you may not be able to make a living doing that. But my goodness, you wouldn't be sitting here. You wouldn't be sitting here. I wouldn't be sitting here if not for the fact of educators. Sure.
Right. Educators push me to do what I do. I remember in high school, the high school counselor. There was a full scholarship and she said, you ought to apply for this.
It was a journalism scholarship. And I said, I'm not going to do it. They're not going to give it to me.
Who are they? I'm I'm this little kid who was was tossed out by her parents, raised by her grandmother. Her grandfather was an alcoholic. They're not going to give this to me. She said, apply anyway, because you already have a no. Right.
Wow. So and I apply and I got it. Had it not been for her believing in me before I believed in me. I wouldn't be sitting in this chair today. So I would not want to deprive my daughter of that career. So I teach her how to handle my husband.
I teach her how to handle her money so that she could be a teacher. Maybe you were gifted to be a bus driver. Maybe you were gifted to be in a career that isn't going to earn what we Americans think is, you know, what you should be earning. But if we teach people to handle money, well, they for the most part can live in whatever God has gifted them to be as a career.
And so we never told her we never came out of our mouths. You're never going to earn much as a teacher. Don't you want to be an administrator? You want to be this. We said, go ahead and be that teacher. And now she calls our children my children.
And I just love that. Well, and it shows you the power of being free to do the things you're called to do. And you're not anchored by the debt that's created because you're living beyond your means. And sometimes that's really hard. But, man, you you illustrate such incredible discipline, you and your husband. And that's what makes it so worthwhile.
Your book, What to Do with Your Money When Crisis Hits. I mean, it is a manual on taking care of this. And it's not impossible. It's not.
I love that statement. Your friend said, you know, you already know. No. So why not try? Yes.
I mean, and so getting discipline and doing the right things, paying debt down, et cetera. Michelle, let's come back next time. Cover more great tools to manage your money in a way that honors the Lord first and foremost, and then helps position you to be able to give and do the things that God's calling you to do. Can we do that?
Yes, of course. Let's do it. And listen, we want to get this book into your hands. If you can participate in ministry and make a monthly gift or a one time gift, we'll send it as our way of saying thank you for being part of the ministry. We don't pay shareholders.
There's no profit earned at Focus. So it all goes back into ministry, which is great. If you can't afford it, obviously we're a Christian ministry. We'll give it to you and we'll get it into your hands and we'll trust others. We'll cover the cost of doing so. It's probably one of the most important things you could do is get your finances in order.
So you can bless others and bless ministries in order to do the work that God's called you together to do. So do it. Get in touch with us, no matter what your circumstances, and we'll bless you with this great resource. If you're in a spot to make a monthly pledge, we sure would appreciate that. A one time gift makes a big difference. Donate as you can when you call 800 the letter A and the word family.
We're stopped by the show notes. Either way, donate and request that copy of the book by Michelle Singletary, What to Do with Your Money When Crisis Hits. On behalf of Jim Daly and the entire team, thanks for joining us today for Focus on the Family. I'm John Fuller inviting you back as we continue the conversation with Michelle and once again help you and your family thrive in Christ. Want to learn more about building activities, parental controls and a safe online community? The Adventures in Odyssey Club could be your best adventure yet. Visit adventuresinodyssey.com and start your free trial at adventuresinodyssey.com slash radio.
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