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Michelle Singletary: Think about all your debt as a weight that you would have to carry on a daily basis, because that's what you're doing. Ten pounds, 20 pounds, 50—just imagine holding that debt. And so if you hate debt, you hopefully will take on less of it or none of it.

John Fuller: That's Michelle Singletary, and she was our guest last time on Focus on the Family with Jim Daly. She'll help you better manage your money wisely as things are tough and might get tougher. Thanks for joining us today. I'm John Fuller, and Michelle has more wisdom for us as we continue the conversation.

Jim Daly: John, it's always great to visit with Michelle. She brings a great smile and a wonderful attitude to the broadcast booth here, but she has some fun insights regarding our attitudes about money—probably fun and stern insights is the best way to say it.

These are some challenging times for many people. The economy is kind of bumpy. Some sectors are doing well, others are not. Michelle says when you live by God's principles, He'll bless you, and she'll encourage you with that message today. It's not the name-it-and-claim-it kind of thing, right? It's really about how to manage your money well so you honor the Lord and those around you.

John Fuller: She has great expertise and experience. She writes a column for the Washington Post on finances. She's written a terrific book, *What to Do with Your Money When Crisis Hits*, and we have copies of that here at the ministry. Stop by the website, focusonthefamily.com/broadcast, or give us a call and we'll be happy to tell you more, 800-A-FAMILY.

Jim Daly: Michelle, welcome back!

Michelle Singletary: Oh, thank you for having me.

Jim Daly: So much fun. This is so good, and it's so practical. It does cut right to the core. Everybody has to deal with finances, if you're a billionaire or you're not making it. Money is what drives the economy. It's how you pay for things, right? So we all have to figure it out, and it's always better when you're biblically informed about what the priorities are from the Lord.

You've done such a great job in the discussion last time. If people missed it, they should go to the website or get the smartphone app, and you can hear it that way. Let's kick it off with this question. Surveys show that only about 30% of Americans have a long-term plan for retirement, etc. Explain why people don't take that basic step. Only 30%. I would think 60-70% would think about, "When I'm not working, how am I going to make it?"

Michelle Singletary: Well, there's lots of pressure on people's paycheck. You've got children, the cost of living is so expensive in so many cities, sending your child to college costs so much. Even when you take on debt, there's still a hole that you have to fill. I completely understand it.

There's also the pressure from when we watch television and everything is saying to you what you have is not good enough, that you've got to upgrade, you've got to get this. Around the holiday times, there's always these car commercials with a big bow on it. There was a series of commercials where people were destroying very good cars so they could upgrade to a new car. There's a lot of pressure from people.

It's very hard to resist that. It's hard to think in your 20s or 30s that at some point you're not going to be making a regular paycheck. "How am I going to live?" My job is to try to get people to do that. You've got to look long-term. Short-term, yes, but also long-term. I don't believe that Social Security is going to go away, but it's in financial trouble. Who knows what the rules are going to be? It's going to be there, but maybe full retirement will be 70 instead of what it is now, up to 67 for some folks.

You must carve out some money for the time where you may not want to work or can work. Also look to the folks in your life. Often we are so prideful that we don't say, "I need help." Those of us who know that there are people in their lives—I'm speaking to you—if you know there are people in your lives that are struggling, some by fault, some by not, don't wag your finger.

My husband and I actually have an account we call the Family Finance Account. We put money in this account knowing that there are people in our family that we are going to have to assist. So when the pandemic hit and one of our relatives lost her job due to no fault of her own—she was in the hospitality industry in a restaurant—she couldn't pay her rent. We paid her rent for a couple of months.

She didn't even ask. We knew. I just said, "Hey, what's your rental company? I'm going to send money off to them." "What? I'm going to pay you back." I said, "Absolutely not. This is not a loan. We don't lend people money." When another situation had a car break down, we helped pay that.

That's why you save extra. You must save out of your abundance, like Joseph did, right? Then you look around to those in your life that you can bless without wagging your finger, without saying they don't deserve to be helped. That is not the time to do that. So you help them. I'm not encouraging people to enable bad decision-making. I'm not saying that.

Jim Daly: You're saying tough circumstances.

Michelle Singletary: Tough circumstances. When a relative lost her job during the Great Recession, she had a good job, was good with her money, but she lost her job. My husband and I had enough in our Family Fund to cover her car payment for a year. That gave her freedom to pay her rent and buy food, and that enabled her not to panic and get a payday loan or use credit.

We never missed the money. Guess what? We were tithing at the same time. We were putting money in our kids' college fund at the same time. People are like, "Well, she makes a whole bunch of money." That's not necessarily true. We just saved over two or three decades.

If you do that, like with the college fund, we were able to send our kids to college with no debt because we started saving when they were wee little people.

Jim Daly: That's a good point. I remember Dr. Al Mohler was on our board and he told me a story. He's in the business of education. He's the president of Southern Seminary. He just talked to a mom whose daughter had acquired a French Literature degree for $200,000 of student debt. The mother was lamenting it, saying, "How is she going to make that money back?"

It's not meant to avoid pursuing your dreams, if that is an interest, but you better think ahead and decide how you can pay that without debt. Save for your college degree, especially if you're going to get a degree that doesn't pay back, probably, because you'll end up being that teacher. But I would assume you would agree with that.

Michelle Singletary: I absolutely agree. In America, we have said everybody has to go to college, which is not true. There are different careers where you don't have to have a college degree, but many jobs do require that. What I tell parents is if you have not been able to save to send them to college with no debt or little debt, then you have to rethink the college experience.

That's okay. So maybe they go to community college for two years and then transfer to the four-year university. They still have the degree from the four-year university. You don't even have to put that you went to a community college, although I would encourage that you do, because I think that shows that you were making a smart decision.

I'm a huge fan of community colleges in this country. They prepare you. We often talk about community college like a 13th grade and there's a lot of criticism about that path. But if you haven't been saved, you have to live your financial truth.

Jim Daly: No, it's good. I was proud of my son Trent. He was enrolled in a four-year college. He looked at the cost during COVID and knew it was going to be online teaching. He came to me—that's the sad part, it wasn't me going to him—he came to me and said, "Dad, why should I pay $3,000 for a class when I can get it for $300 at the community college?" I said, "Man, you're making good choices. That's a great thing."

That was all on him. We didn't pressure him that way. That does give you a sense that he understands money, and that's good at a young age at 19, 18.

Michelle Singletary: It's so hard to buck this trend of having a certain degree from a certain university. I tell this story all the time. My parents abandoned me, my grandmother raised me, my grandfather was an alcoholic—lots of issues. I went to public schools, went to a state university, and I ended up at the Washington Post.

The guy across from me, who is a dear friend, good journalist, he went to private schools, silver spoon, the whole thing, went to Harvard. We ended up at the Post at the same time, desks next to each other. He had a path, I had a path.

I believe that if your child is tenacious and smart, they will get there. You don't have to have that name-brand degree if you can't afford it. We must live within our means because there will be times where things might get tough. There are people who've lost their job who never thought that they'd lose their job, and they weren't prepared for it.

Jim Daly: In that regard, that was another question I wanted to get to in the book. You talk about Emergency Fund and Life Happens Fund. I think I lean toward the Life Happens Fund. That sounds like a fun fund to be part of. What are those two—the Emergency and the Life Happens?

Michelle Singletary: It's not what you think, the Life Happens Fund! It's not tickets for the movie. No. The Emergency Fund is that fund that you always hear about—three to six months' living expenses. So what it costs to run your household for three to six months. That's a lot of money for anybody, really, but the whole idea is that it's there if you lose your job.

Say you have a good job, but you run out of sick leave. Those of us who have good sick leave policies don't realize that many Americans don't have sick leave. If they have to take off because they're sick or their child's sick, they don't get any pay. So that's the emergency money. That's the set-it-and-forget-it, don't even think about using that money.

The Life Happens Fund is for when things in life happen. Your car breaks down. Your kids, if you've got kids, they're going to break something in your house. If you have a pet, the veterinarian fee. That's for the things in life so that you don't touch the Emergency Fund. That fund, I tell you, people who create it say it's a lifesaver.

You know there are always these benchmarks, but just save what you can when you can. Because if it's just $25 or $100—do you know why people buy new cars? It's not because of the new fancy whatever.

Jim Daly: They don't break down as much?

Michelle Singletary: That's also true, but they often buy a new car because they don't have the money to repair their current car. It is easier to buy a new car than to get the money to repair your car without a lot of debt that's like 20% if you put it on a credit card.

People will come to me saying, "My car has a $1,500 car repair. I'm thinking I should buy a new car." I'll tell them, "I'm not a math genius—I do have a master's degree in business, but I'm not a math genius—$1,500 and $30,000 for an average car, which is more?"

Jim Daly: It does push on the "want" button, though. It's nice to drive a newer car, the air conditioner works, all that good stuff, but sometimes you may not be able to afford it, as your point. Let me ask a question, and I think this will wrap up the kids' section, perhaps. But the 20-something—it's tough.

They are, maybe they do have some school loan debt, and they're trying to get started, but guess what? It's too tough. "I can't make the rent, groceries are a little tough," so they're going to come back to mom and dad's house just to recalibrate. Speak to some of the rules that you have developed that set the game plan for that situation.

Michelle Singletary: I think it's a wonderful idea for them to boomerang back home. It's so un-American because we're like, when you get 18 or you get out of college, just go out there and figure it out yourself. We couch it in the sense of they've got to be financially independent or they'll never know how to handle money. That is not true at all.

I am a huge advocate of multi-generational housing. In many parts of the world, it's normal for different generations to live in the same household because it's so expensive in those countries. Here in America, we say everybody's got to have their house. That is not sustainable, particularly in metropolitan areas where rent is so high.

My husband and I begged our adult children when they graduated from college to stay home. Mind you, remember, they don't have any student loan debt. But what we said is if you stay home for several years—not one or two, but several—and save the majority of your paycheck, we're talking 80 or 90% of their take-home pay, when they launch, they will have enough to pay for a home outright or close to it.

We show them the numbers. They were like, "We want to be on our own," but they looked at the numbers and they said, "You're absolutely right." So all three of our 20-something-year-olds are living with us. The last one who—she's my little nemesis—she was like, "No, no, no, I'm going to—" because we clash a lot. She said, "No, I'm going to get an apartment." She's a new teacher. "I'm going to be out there."

Then she looked at the rents.

Jim Daly: $2,500, $3,000.

Michelle Singletary: Exactly. It would take a full paycheck. She came to us and she said, "You're right. I'm going to live at home." So now she is saving a great deal of her paycheck. Here's what else happened, particularly with our oldest. Because she was living at home, because she's been working a little longer, she's saving that 15% of her money for her retirement account and she has a non-retirement investment account because she doesn't have to put all this money in rent.

It doesn't work for everybody. I understand. Maybe they live in a different city, maybe their home life wasn't great and so they don't want to go back into that dysfunction. I get that. But if you're listening and you're a parent and you have the room, just think, just for a blip of their life—because we're just talking a blip. If you live as long as most Americans live to their 80s or 90s, it's just a blip.

Something my daughter said to us—because I asked her, "Are you ever worried about taking care of us when we get older?" and they said, "Of course not. We know you and Daddy save a lot of money." But she said this, "If you become so ill that you run through all of that money, you have taught all of us how to handle our money so that we can help you. Not only that, you have taught us to work together, so it will not fall on just one of us, and the team of us can take care of you if we have to."

Jim Daly: Way to go, Mom!

John Fuller: That's beautiful and that's right from the heart of Michelle Singletary. She's our guest today on Focus on the Family and we're so glad to have her. She's talking about so much of the contents, but there's so much more in the book, *What to Do with Your Money When Crisis Hits*.

We encourage you to call 800-A-FAMILY to get your copy, 800-232-6459, or stop by focusonthefamily.com/broadcast.

Jim Daly: Michelle, let me ask you some practical questions when it comes to the 401(k) or in non-profit, 403(b). They're kind of the same type of retirement accounts. In that context, you advised to never or rarely take money out of those accounts because you're shortening your retirement then.

Michelle Singletary: That's right, if you can. Now, there are some crisis times where maybe you lost your job and you've gone through all your savings, but honestly, you need to see that pot of money is not accessible until you retire. You don't tap it for that down payment on a home. You wait and save it. You don't tap it when you want to pull it out to maybe pay for college expenses.

You don't. You send the kid to the community college, let them commute—all those other things. You don't touch that money, because we know that more and more Americans are living to 90s and 100, and you're going to need that money to help take care of you. That's a sacred pot of money that you just ought to leave.

When you change jobs, lots of folks change jobs and cash that money out rather than roll it over. If you take it out before you're 59 and a half, you've got to pay a 10% penalty and ordinary income taxes. By the time you take that money out, you have given so much to the government at a time when you shouldn't that you don't actually net as much as you think you're netting. Just set it and forget it and just leave it there, because you will need it for retirement.

Jim Daly: You counseled a woman who I think was about 56. She was looking to retire at that point. She kind of thought she had it together and she'd get a pension and some other things. I think this is a great illustration where a lot of people are at. What happened with that woman?

Michelle Singletary: Well, she said, "I need to retire early." I said, "Okay, so what's your retirement income like?" She didn't know. I said, "Well, how much are you going to get from the pension?" She didn't know. I said, "Well, how much are you going to be pulling from your retirement savings?" "I don't know." I said, "Girl, you're not ready to retire! You don't have answers to any of my questions."

She actually ended up not retiring because she wasn't going to get enough to really fund the life that she wanted. She was also thinking about buying a new house. Without income. I thought, "What are you doing?"

When it's time to retire, you're getting close to it, you need to look at what is going to be your retirement budget because you're not going to have that steady money coming in. My husband and I have been doing pre-retirement income planning for about 20 years. I'm so glad we did that because there are some things that we changed, even some habits that we changed, so that we can make sure that we have enough.

Jim Daly: What's a little interesting and observational in that example with that woman is she just thought she had it and never really looked into the numbers. I think a lot of people are in that space. You just got to make sure you're calculating what you're going to need, how long—nobody knows how long they're going to live, but like you said, people are living a lot longer than they used to, which actually goes right to the next question with Social Security. What's the best rule of thumb when you're looking at when do I actually file for Social Security and start taking it?

Michelle Singletary: It's a very individual decision because a lot of financial experts would say, "Well, you must wait till 70." But that does not apply to a lot of people. Maybe they didn't save, they can't work anymore, and there's no point of you suffering until 70. If you need to take it, take it at 62.

But if you can wait, there is a benefit to waiting. Your benefits go up every year that you wait and after your full retirement age, it even goes up higher—about 8% a year till it maxes out at 70.

Jim Daly: So 70 is kind of the max out.

Michelle Singletary: That's right. Now, my husband and I have different views. He wants to be like, "Let me just take this money and we're going to go travel," because we're good savers, everything's in place. I like your husband! He says you never know what your health is going to be like, so take it and then enjoy it.

I say, "Well, okay, so we've sort of decided to kind of split the difference." Like he's going to take it at full retirement and I'll probably wait until 70. That way we kind of have both. But I think you look at what you have and make that decision. If you can wait, it makes sense to me if you can wait until 70 because then you get that increase and because the stock market is up and down and crossways, that's a guaranteed 8% return that is going to be there for you.

I think that's a smart decision if you can wait or split the difference. But the most important thing is what you talked about—work the numbers. Make sure that you make an informed decision based on your individual situation.

Jim Daly: Michelle, right at the end here, I really want to talk about the spiritual perspective on money. The Bible talks a lot about money. I think it's the number one or two topic in the Bible. The Lord is very aware of money and how it's used and how it's spent. He talks about the importance of tithing and giving and those kinds of things.

Being a financial planner at the top of your game, really, working at the Washington Post, writing books, doing all the interviews, NPR—you're right in the sweet spot in terms of communicator. How do you see that junction of the Christian faith, God's view of money, and the practical experience of being a human in this life? There's a big question.

Michelle Singletary: I know, that's a big question. I'm not an official financial planner; I just want to make sure people understand that. But I do have a master's degree in business and I have been in financial ministry for decades, really, although I only look 29.

This is how I look at it. He has blessed you with resources, and I know that He's looking to and fro for those who are handling those resources well. When He sees that, I believe that He increases your abundance, not so that you can buy more stuff, so that you can help others.

There's so much in scripture that is a guideline for how you handle your money that is just wonderful. Proverbs: don't be a borrower. If you're going to be a borrower, get out of it. There's even scripture about don't co-sign a loan. The scripture's like, "What are you doing? Don't do that."

Even in when they talk about the whole armor of God, because sometimes as Christians we like to say these phrases, "Well, God will make a way," and He will. But scripture is clear that you are supposed to do some things. So when in the whole armor of God, there's a part of the scripture that says, "After you've done all that you can, then stand."

And that's what the Lord says. So "all" means having an emergency fund, live below your means, don't live the American dream on debt, live your financial truth, help other people, don't just save for yourself. That's selfish. Do what Joseph did, save and save not even knowing that you're going to be able to help somebody else.

Then after you do all of that, the blessings will come. It's not a tit-for-tat. I'm not saying that because I don't believe that, and I know there's some ministries like "If you give, He's going to give you back." That's not what I'm saying. I think that you can position yourself to be a blessing to your immediate family, your extended family, your county, your city, the country, and the world.

Jim Daly: That is so well said. I would think when you talked about that fund, the Family Fund to take care of—that's such a—you must feel blessed to be able you and your husband to be able to do that for your relatives and for your friends that are in need.

Michelle Singletary: I'm tearing up because here's this woman who took in five grandchildren and she was a nursing assistant at a hospital. So she never made a whole bunch of money. She made the decision to take us in and care for us, and she didn't even take the cash payment that they were offering because she was so proud and also at that time, they were so intrusive into your family life and it was dehumanizing to her. So she didn't take the cash payment.

She took us in and raised us. If I can just give back a little bit of what she did for me, my life would not be in vain. I don't do what I do—writing books and all the things I do—just to have more stuff, because when I'm gone, that stuff is not going to mean anything.

But when I close my eyes for the last time, I want to be able to meet the Lord and say, "You know what? I had a ministry that helped people get out of debt, and when they got out of debt, they had the freedom." I have a ministry that if you teach people to handle money, they don't have to cheat on their taxes. They don't have to skirt the law. They don't have to cheat. They don't have to run after quick schemes. They don't have to be scammed because they have the money; they don't have to worry. They don't have to play the lottery.

So I feel like that's what I was meant to do, to show people that you can live a wonderful life without a lot of stuff. My husband and I celebrate anniversaries and things, we don't really get each other a whole bunch of gifts because I'm thinking God gave me the most amazing husband. He's so kind and generous and loving and patient, and I thought there is nothing he could buy at a store that would be anything other than what he is.

Jim Daly: Blessed of all men to have you as a wife! Now that's amazing. Just it's so sweet. You've got to know, let me just say, everything I see in you, you've done it. So don't strive in doing it, because you've been such a great example and you put it into a book for others to follow and speak about it in your great positions that God's given you.

Michelle, well done. Well done, thy good and faithful servant. If you want a copy of this book—which I can't imagine you don't want a copy of this book—but get a hold of us. *What to Do with Your Money When Crisis Hits*. It's very practical, it's down-to-earth things that you can do to prepare for the rainy days and the wonderful things that Big Mama taught Michelle. I think that's so fun. What a woman. I would have loved to have met her.

Get a copy of this book. If you can support the ministry in doing so, it kind of is a win-win because your dollars go right to ministry—we're not paying shareholders—and we'll send you the book to say thank you for supporting the ministry. If you could do that monthly, great. If you could do a one-time gift, that's great too. If you can't afford it, get a hold of us; we'll trust others will cover the cost of that.

John Fuller: We've had so many different topics jammed into the past couple of days, and there's really so much more in the book. Donate as you can, and we'd be happy to tell you more. The book again is called *What to Do with Your Money When Crisis Hits*, and our phone number is 800-A-FAMILY. You can find out much, much more about Michelle, the book, and how to partner with Focus on the Family all at our website. It's focusonthefamily.com/broadcast.

Jim Daly: Michelle, again, thanks for being with us. I can't wait until next time.

Michelle Singletary: Oh, thank you so much for having me. Take care.

John Fuller: And so glad you could join us today for Focus on the Family with Jim Daly. On behalf of Jim and the entire team, I'm John Fuller inviting you back next time as we once more help you and your family thrive in Christ.