Focus on the Family

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John Fuller: This is John Fuller, and please remember to let us know how you're listening to these programs on a podcast, app, or website.

Michelle Singletary: 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. 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.

John Fuller: 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.

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. Inflation, we're paying so much for gas and groceries and all those kinds of things. 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. 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.

John Fuller: 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 focusonthefamily.com/broadcast or call 800-A-FAMILY to get your copy. 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.

Jim Daly: Michelle, welcome back.

Michelle Singletary: Thank you so much for having me.

Jim Daly: It's great. And you also went to Johns Hopkins, which is quite impressive for that Master's degree.

Michelle Singletary: I did.

Jim Daly: We had a board member, Dr. Ken Fentress. He went there as well and he did his PhD in dead languages, biblical dead languages. 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, you can go to bed every night opposite of what Jesus told us. Fear not. We can just get filled with fear because of what we see and hear. We've got to be very cautious, especially in the Christian community, to take 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.

But when you're looking at it, our dollars aren't going as far as they used to. I think it's 63% of people are living paycheck to paycheck. When things go up, that's a fear. How do you first address that emotional issue of money?

Michelle Singletary: I tell people to lean into your faith, especially because we are taught to be faithful. But scripture also talks to us 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, during 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 He is going to be there. But when you can, there are some things that you should do so that when those times come, you can lean on your faith because you've done all the work.

That means saving when you have the money. That means not living above your means, making better financial choices. 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.

Right before the pandemic, I was telling people you’ve got to save, you’ve got to live more focused. People were like, "Things are going great, what are you talking about?" Sure enough, here's what hit and they weren't prepared. These are people who had the money.

There are different parts of America. We've got parts of America where people are just not making enough. They're just making minimum wage or below. Then there's a good part of America that is doing okay, but then they overspend. And of course, there are people who, no matter what the economy does, they're going to be okay. They've got a lot of money.

Jim Daly: It reminds me of that Joseph moment in the Old Testament where Joseph is in Egypt and he's put in charge of everything. He says, "Okay, we're going to save up. We need all the grain we can save up for a seven-year famine."

Michelle Singletary: I love that story. I teach that story. Because when we teach that story, it's often from prison to palace. I think it's a savings story. Because when you think about it, his brothers would not have come to see him had it not been their father saying, "Listen, they've got extra up there. We need food. Go get that extra."

During times of plenty, scripture says he saved so much that it was overflowing. So he saved even past what they needed. Then they reunited trying to get more. That story is all about when times are good, you save an abundance, not just for yourself. I really believe that your savings should be for your family and to help others. That's what he did, because he would have had plenty just for Egypt, but he said, "No, I'm going to do more." I think that's the message of that story which I just love.

Jim Daly: Michelle, I hadn't thought of this, but we have so many great donors to Focus on the Family that write incredible checks. 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. 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 them like that. It is just 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 book, *What to Do with Your Money When Crisis Hits*, what advice do you have for people that are hitting a financial calamity? What do they do first, other than maybe worry?

Michelle Singletary: Worry is a natural thing, but we're not supposed to worry. I'm just going to be completely honest, I am a worrier. I know I shouldn't be. I'm a woman of faith, but it's just how I was raised. My grandmother was a worrier and she passed it on to me.

What I try to do is get people—I don't say don't panic, because that's just not where people live. I say it's okay to feel that panic when the stock market is going down, but you don't want to act on that panic. Feel what 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.

It's also not a time to wag your finger at people. This financial stuff is really, really tough. It has nothing to do with your intelligence level. I have worked with doctors and lawyers.

Jim Daly: They just spend money.

Michelle Singletary: They just spend money. And accountants! Can you believe it? Accountants! I was at church one time and we had a little table because we were recruiting for our ministry. A woman came up ahead of her husband with her baby in her arms and she said, "Michelle, can you talk to my husband? He is really bad with money." I said, "Isn't your husband an accountant?" She said, "Yeah, that's the problem. He thinks he knows everything. He handles his clients' money perfectly, but our money is just a disaster."

That showed me that it has nothing to do with your intelligence level. Sometimes you’re overconfident. Men are a little overconfident. So there's a lot that you have to do to put in place for when a crisis hits. That's really what the book is about. It's not a matter of if there is going to be another financial crisis. It's when.

Jim Daly: 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 called Big Mama. Tell us about Big Mama and what happened and why you ended up there.

Michelle Singletary: There was five of us. My sister was eight, I was four, a sister who was three, and twin brothers just under two years old. Our parents had some issues and they basically abandoned us. They didn't tell anyone. We were in a house and my grandmother, bless her heart, said she had a dream. I believe it's probably the Lord talking to her. He told her something's wrong.

She sent my grandfather over to check on us, to a wellness check. 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. 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. They wanted to split us up. She said, "I'm not going to have that happen."

She said, "I'm going to take all five of them." Every time I say that, I can't even imagine. I had three, and sometimes I don't even want those three. For her to say, "I'm going to take all five of them," when most of us had health issues. My brother had epilepsy, my sister had really bad asthma, and I had juvenile arthritis.

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. The way she managed money was just miraculous.

Jim Daly: I think I see where you got it.

Michelle Singletary: I learned everything at her feet. I absorbed everything from her. She's just the best money manager I've ever had. I always joke that if she had a penny, Lincoln would scream.

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. Some parents feel guilty. They overspend because they give into all the materialism that is out there. My grandmother 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."

Jim Daly: That’s good, even having that discussion. So many times parents will live 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.

Michelle Singletary: Right. And kids will be kids. They see their friends get stuff. But she talked us through it all and I just remember thinking, "Okay, well, I can't do anything about it."

It's so interesting, I just had a discussion with my adult daughters and we taped a podcast with them. You know the children don't ever tell you that they've listened to all the stuff. They're just always fussing and rolling their eyes. But when we were discussing what it was like growing up under me, who was frugal like my grandmother, I said, "Did I scar you?"

They just started laughing. They said, "We didn't like what you were saying, but now we understand." Because I would have all these phrases that I would use. If they wanted to go out to a fast-food restaurant, I would say, "Do you have fast-food money? Do you have a job?" I would say, "College fund," when they wanted to ask for stuff.

My husband and I sent all three of them to college with no debt. So when they would ask for things, we'd go, "Well, college fund." 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, "We now appreciate those conversations, even though they were so annoying."

Jim Daly: That’s good you got them over that line. That's business 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% of parents use credit cards or loans to pay for non-essential items. Speak to that misuse of credit cards. What should we use credit cards for and what should we not use credit cards for?

Michelle Singletary: In America, we have taught Americans to live the American dream on borrowed money. Don't wait to save, just get it now. That's what the nation does too. 30 trillion. And so we teach them to not wait. 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.

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 are approaching 20%. Some people have interest rates higher than that. So we use credit to elevate our lifestyle and then we get to the point where we can't pay it. 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.

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.

Jim Daly: 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—get a $500 cash card and that's your grocery card for the week or for the month, whatever applies to you. You could find different ways to offset the ease of a credit card without having to build up the debt of it.

Michelle Singletary: Credit is a convenience that they teach us is for our convenience. And now they have the point where you speed up the process of payment. So now you can just tap your card. I may be dating myself, but remember when they had to pull out the machine and put the card in there and that sound? And then sometimes they even had to go in the back and look for the machine.

Now you can tap your card and pay. You can pay by looking! Open your phone and they can—you can pay by just looking at the phone. When they decrease the time that it takes for you to pay, you tend to not think about how much you're spending until you get that bill. Because it's so quick, you don't have time to think about, "Can I afford this?"

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.

Jim Daly: 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 when they ran it over the machine, it wasn't capturing the number. 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 yeah, that dates me.

John Fuller: This is Focus on the Family with Michelle Singletary and Jim Daly, your host. We're having a great conversation about things that matter: finances and how you can get a handle on yours. 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. Focusonthefamily.com/broadcast or call 800-A-FAMILY.

Jim Daly: 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. When you're looking at the must-haves versus the wants—I mean the wants, we put a lot of stuff, like a phone is not a necessity and especially a big plan. 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?

Michelle Singletary: The first thing, first is first, is giving. It must be at the top. 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."

I think the whole concept of tithing was God's way to demand discipline in your finances. Because if you have to carve out that first 10%, then you must be a better manager of the 90 that's left. If you only have 90, now you're starting to figure out what can I cut out. Housing, food, all that becomes important.

Then you start looking at the things that are not a necessity. Maybe you need a cell phone because you want to stay connected to your kids. Okay, 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 they could borrow?

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. They fussed and I said, "I don't care because we have a college fund to fund. We've got one objective."

Then you start looking at the necessities, the other things that you have to do, and then you can add back in some wants. You will never hear me tell people to not get that expensive coffee. If that good cup of java, and you're going into work and you have a sense of calmness, I'm okay with that because 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-intensity place. I am okay 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. 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. 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.

Jim Daly: Again, good advice. It really requires some discipline and that can be the Achilles heel for people, just to stay disciplined. Not perfect, it’s kind of like parenting. 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. Let's hit those, in particular when you're unemployed or underemployed. What were those three?

Michelle Singletary: I got this idea when you go to the hospital to the emergency room. I've been there, 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." What they're doing is they're triaging who is the most important, life-threatening.

That's what you have to do with your life. What needs to be taken care of right away? Emergency fund. Life happens fund. That's something I talk about in the book. And then your savings for different things like your daily expenses, and then the long-term things like retirement and things like that. You only have a certain amount of money coming in. 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.

Jim Daly: In that regard, that triage, when you have debt, you kind of have 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? What's your attack methodology?

Michelle Singletary: I don't agree with that. I'm a little different than a lot of financial experts because they're looking at the math. It does make more sense. 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.

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, the smallest, you get a win. People feel like, "I have now reduced my debt so quickly, I can go to the next one and then the next one." I've done this year after year.

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. There have been studies that show that this method, small to the largest, actually works because it's more psychological. Because the money issue, often times people don't have a money issue, they have a management, a mental issue.

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. 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 a lawyer or doctor. You've got to manage it.

But my daughter can be a teacher. That is her God gift to be a teacher. I call her the kid whisperer. She'll walk in a room and 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?

Jim Daly: Well, you may not be able to make a living doing that.

Michelle Singletary: Right. But my goodness, you wouldn't be sitting here, I wouldn't be sitting here if not for the fact of educators. Educators pushed 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 this little kid who 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'." So I applied 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. I teach her how to handle—my husband and 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 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. 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?" We said, "Go ahead and be that teacher." And now she calls our children, "my children."

Jim Daly: 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. Sometimes that's really hard, but you illustrate such incredible discipline, you and your husband. That's what makes your book so worthwhile. *What to Do with Your Money When Crisis Hits*, it is a manual on taking care of this. And it's not impossible. I love that statement your friend said, "You already know 'no', so why not try 'yes'?"

Getting disciplined and doing the right things, paying debt down, etc. Michelle, let's come back next time and 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?

Michelle Singletary: Yes, of course.

Jim Daly: 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 thanks 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 trust others will 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.

John Fuller: Donate as you can. A monthly pledge would certainly be appreciated, or one-time gift. Either way, make a donation today when you call 800-A-FAMILY or stop by focusonthefamily.com/broadcast. Thanks for listening to Focus on the Family with Jim Daly. I'm John Fuller inviting you back as we once again help you and your family thrive in Christ.

Jim Daly: Hey parents, you can help Adventures in Odyssey launch its first animated film, *Journey into the Impossible*. When you give before May 1st, your gift will be doubled. Watch the trailer and donate at focusonthefamily.com/impossible.