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Michelle Singletary: What I Learned Writing a Personal Finance Column for 25 Years |

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I learned how to manage my money with my grandmother Big Mama.

She was extremely frugal. I like to joke that she was so tight with money that if she held a penny, Lincoln would scream.

My grandmother is the reason I became a homeowner in my early twenties. I only rented a year before buying a two bedroom, one bath condominium in Baltimore.

During the time I was renting an apartment, every phone call with Big Mama started with this question: “Are you still giving your money to the white man?” »

All. Only. Call. Call. For one year.

In the 25 years I’ve written this column, it’s largely Big Mama’s wisdom on personal finance principles that I’ve passed on to readers.

My first column was published on March 30, 1997. The title was: My Grandmother’s Saving Grace.

I wrote then: “My grandmother was an example of the fundamental financial principles of the older generation of African Americans. These conservative, hard-bitten practices helped bring my generation of middle-class black people to where we are today.

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My grandmother wasn’t always right — it’s nice to rent, and you actually get what you pay for: a roof over your head.

Big Mama didn’t teach me how to invest because she was too scared of the stock market. The only bond she had was the bonding adhesive for her dentures. I am ready for retirement because I did not listen to my grandmother’s advice and consulted a financial adviser who pushed me to invest in mutual funds.

Over the years people have wondered about the origin of the column title. I was asked if I wanted to write a column just for black households.

From the outset, I wanted to explore the financial planning issues facing African Americans — and I have done so over the years, including in my award-winning 2020 series “Sincerely, Michelle.” But, as I said in that inaugural column, the color of money is for “anyone who realizes that no matter who you are, the color of money is always the same.”

I was a bit naïve when I started writing the column, not fully realizing that not everyone has the benefit of a Big Mama. I couldn’t understand how people with enough money could so easily mismanage it or make monumental financial decisions.

Sometimes I was too harsh, too critical. However, the more I talked to people, spending time not only reviewing their budgets and bank accounts, but learning about their financial backgrounds, the better I understood their motivations for the money moves they were making. With experience, I understood the depth of their financial fears. This money story can be intimidating.

I also realized that financial missteps are often rooted in childhood trauma or, in many cases, stem from excess.

I studied behavioral economics, which made my advice more practical and reasonable. Because people are human, what works on paper doesn’t always work in practice. When it comes to money, many people are prone to irrational behavior.

Of course, it may make more sense to pay off the debts with the higher interest rate. But, behaviorally, when people first pay off small debts, they experience immediate triumph, and this can spur them to become aggressive in getting rid of the rest of their debts.

I no longer underestimate the power of marketing, which conditions Americans to be consumers. Masterful marketing campaigns encourage overspending and debt accumulation.

“Saturday Night Live” had a hilarious skit in 2020 about sentimental car commercials. You know those where a spouse is surprised by a new car.

The SNL sketch begins with a father, mother, and teenage son sitting around a Christmas tree.

“Hey, Matt, I think there might be another present for your mom,” the dad said.

Then the voiceover says, “It hasn’t been a normal year. So this Christmas, treat her to something extraordinary at the Lexus “December to Remember” sales event.

They all come out to see a white Lexus with a red bow in the driveway.

“Did you seriously buy a car without asking me?” the woman said incredulously.

I love this sketch, because if you buy a new car without discussing it with your significant other, it’s not a gift. It is a 60 month financial obligation. Such a large purchase should be a joint decision.

My hatred of debt has been a recurring theme in my column, because far too many people fail to consider the long-term consequences of debt. Yet I often get pushback from people who think there is “good debt” and “bad debt”.

A column with the headline, “Yes, all debt is bad debt,” led to a discussion with Jared Bernstein, who is now a member of the White House Council of Economic Advisers.

“I’d bet there aren’t many more dedicated fans of this newspaper’s personal finance editor, Michelle Singletary, than yours,” Bernstein wrote in a 2017 column. consumer protection that works, talks and is vigilant, although to be clear, it doesn’t let you off the hook either. I don’t just read it. I read it to my children. But there’s something we don’t agree on, and that’s debt.

Bernstein and I had a debate in his column. He argued that there is big debt, good debt and bad debt.

“She thinks it stinks. Wants to slam the debt around. If the debt crossed the street, it would crush it. I disagree,” he wrote. “Big debt increases your earning power so you can pay it off and have extra money later to safely take on a good debt.”

I replied, “In theory, some loans make sense. Without a mortgage, most Americans couldn’t afford to buy a home, which for many households ends up being their greatest asset. I agree that business loans have helped people follow their passions and start small businesses. But what we need in the United States is not more debt support, but more caution.

I learned my debt hatred from my grandmother. She despised debt.

Big Mama died at 82, two years after my first column. I can still hear his voice in my head, lecturing me about avoiding debt as much as possible, saving more, and spending less. She was and still is my muse of writing, and I miss her very much.

As I celebrate 25 years of the privilege of writing a personal finance column for The Washington Post, my grandmother continues to be the inspiration for my advice and my mission to do what she did for me: model and encourage good money management, maintain a healthy dose of skepticism and help those most in need.

Call Michelle Singletary at 1-800-Ask-Post. Readers may also write to Michelle Singletary c/o The Washington Post, 1301 K St., NW, Washington, DC 20071. Her email address is michelle.singletary@washpost.com.