“The Color of Money” after 25 years. This is what I learned.

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I learned how to handle my money from my grandmother, Big Mama.

She was very 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’ve only rented for a year before buying a two-bedroom, one-bathroom condominium in Baltimore.

During the time I rented an apartment, every phone call with Big Mama began with this question: “Do you still give your money to the white guy?”

all. single. Telephone. communicate. For the year.

Financial lessons from Big Mama

In the 25 years I’ve been writing the Color of Money column, it’s been Big Mama’s wisdom about the principles of personal finance that I’ve passed on to readers.

My first column was published on March 30, 1997. The headline was: The Blessing of Saving My Grandmother.

She wrote then: “My grandmother exemplified the basic financial principles of the older generation of African Americans. These hard-line and conservative practices helped make my generation the black middle class we are today.”

My grandmother wasn’t always right – it’s okay to rent, and you actually get something for your money: a roof over your head.

Sometimes renting your own rooftop is more expensive than owning it

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 adhesive tape on her dentures. I’m ready to retire because I didn’t listen to my grandmother’s advice and consulted a financial advisor who pushed me to invest in mutual funds.

Over the years, people have questioned the origin of the column title. I was asked if I meant to write a column geared only towards black families.

From the start, I’ve wanted to explore the financial planning issues facing African Americans – and have done so over the years, including the award-winning 2020 “Sincerely, Michelle” series. But, as I said in this opening column, the color of money is for “everyone else who understands that no matter who you are, the color of money is always the same.”

Michelle Singletari, personal financial columnist for The Washington Post, describes what to look for when hiring a financial advisor and when you should use one. (Video: Amber Ferguson/The Washington Post)

I was a bit naive when I started writing the column, and I didn’t fully appreciate that not everyone has benefited from Big Mama. I didn’t understand how people with enough money could easily mismanage it or make really bad financial decisions.

Netflix Series Asking Couples to Save Up to $35,000: ‘Marriage or Mortgage’? You know where I stand.

At times, I was too harsh, too judgmental. However, the more you talk to people, and spend the time not only reviewing their balance sheets and bank accounts, but learning about their financial background, the better you will understand their motivations for their money moves. With the benefit of experience, I understood the depth of their financial concerns. These financial things can be intimidating.

I’ve also come to realize that financial mistakes are often rooted in childhood trauma or, in many cases, from overeating.

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.

Well, you are making financial mistakes. Here’s why.

Sure, it might make more sense to pay off debt at the highest interest rate. But, behaviorally, when people pay off small debts first, they experience an immediate victory, and this can activate them to become aggressive in getting rid of the rest of their debt.

I no longer underestimate the power of marketing, which makes Americans consumers. Ingenious marketing campaigns encourage overspending and debt accumulation.

“Saturday Night Live” had a hilarious 2020 skit about emotional car ads. You know the folks, as the husband is surprised with a new car.

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

“Hey Matt, I think there might be another gift for your mum over there,” says the father.

Then the voiceover says, “It hasn’t been an ordinary year. So this Christmas, get her something extraordinary during a December Lexus sales event for remembrance.”

They all go outside to see a white Lexus with a red bow in the driveway.

“Did you seriously buy a car without asking me?” The wife says incredibly.

I love this sitcom because if you buy a new car without discussing it with your partner, it’s not a gift. This is a 60-month financial commitment. A purchase of this size should be a joint decision.

My hatred of debt has been a recurring topic in my column because not many people think about the long-term consequences of taking on debt. However, I often receive opposition from people who think there is such a thing as “good debt” and “bad debt”.

One column titled “Yes, All Debt is Bad Debt” led to a discussion with Jared Bernstein, now a member of the White House Council of Economic Advisers.

Debt: slap it or cuddle it? My debates with Michelle Singletary.

“I bet there aren’t many more loyal fans of this newspaper’s personal finance writer, Michelle Singletary, than your real one,” Bernstein wrote in a 2017 column. “It’s the CPC walking, talking and alert, 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 is one thing we disagree about, and that is debt.”

There was a discussion between me and Bernstein in his column. He argued that there are great debts, good debts, and bad debts.

“She thinks it smells bad. He wants to slap the debt. If the debt crosses the street, I run over him. I do not agree,” he wrote. “Big debt enhances your earning power so that you can pay it off and keep the money afterwards to take on some good debt safely.”

I replied, “In theory, some loans make sense. Without mortgages, most Americans can’t buy a home, which for many families ends up being their biggest asset. I realize that business loans have helped people pursue their interests and set up small businesses. But What we need in America is not more encouragement on debt but more caution.”

Do you suffer from serial debt exit disorder?

I learned my hatred of debt from my grandmother. I despised religion.

Big Mama passed away at the age of 82, two years after my first vertical. I can still hear her voice in my head, a lecture on avoiding debt as much as possible, saving more, and spending less. She was and still is my inspiration for writing, and I miss her very much.

As I celebrate 25 years of writing a personal finance column for The Washington Post, my grandmother continues to inspire my advice and mission to do what she did for me: model and encourage good money management, and staying healthy. A dose of skepticism, helping the less fortunate.

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