Answering those financial queries

Published: Thursday, January 4, 2007 at 11:26 a.m.
Last Modified: Thursday, January 4, 2007 at 11:26 a.m.
While I'm off spending some much-needed time with my family, here's a transcript of a recent online discussion with readers. It covers a potpourri of personal finance issues many people face.
Q: I keep seeing commercials for companies claiming to get you out of debt by reducing interest rates and providing low monthly payments. Do these companies really get you out of debt like they claim?
A: If you need help with your debts, go to So many people are in credit card or debt trouble that lenders are not as willing to negotiate as they once were.
Many of the companies you see advertising are trying to get you to sign up for a debt management plan and will charge you too much for that plan. In some cases, they charge what all your debt payments total for a month.
Heck, you could take that money and pay a creditor yourself. If you need that kind of help, find a plan that doesn't cost more than about $50 to set it up and $25 in monthly fees.
Q: I am two (albeit very large) payments away from paying off my credit card. I had huge debt, and it's almost gone. I have no savings, but soon I will have no debt and then the savings can begin. I can see the light, Michelle, and it feels great. Having this debt on my shoulders has been awful. I've learned my lesson, and I will never do it again. Now, my question. How long does a girl have to wait to buy a house? I'm tired of renting. Oh, and I'm getting married.
A: Wait. Save with your honey and soon enough you will have enough to buy a home.
Q: I would really appreciate your insight on a family situation my husband and I are facing. Last year, I bailed my parents out when they were approximately $1,000 in debt to one of those ''payday advance'' places. They are both on fixed incomes but also have terrible spending habits - no budgeting, rarely keep track of expenses, etc. My husband and I have tried to work with them to acquire new habits, but they are very resistant to change. I found out that my folks are once again in debt to the payday advance people, this time to the extent of $2,000. My parents have asked us to loan them the money to pay the debt off, with them to make regular payments (at no interest, which is fine by me) to my husband and I instead. We have made this arrangement many times over the years. My parents never do pay us back, and obviously, we have no way to enforce the debt. My husband feels we should just bail them out again, acknowledge to ourselves that we won't get the money back, but at least have the comfort of knowing that they no longer owe money to these jackals. My thinking is: No, we shouldn't. Additionally, I am about to be unemployed for a period of at least four months. Please share your thoughts with us. I know what the answer would be if the individuals involved were friends, but should we hold help to parents to a different standard?
A: I hate to go against your husband because clearly he cares. But you are the right one here. Do not bail them out again.
You see, you're right that they will never learn their lesson because you two keep bailing them out. Can I use a harsh example? Let's say your parents were drug addicts. Would you and your husband give them the money for a fix? No - you wouldn't and shouldn't.
The same is true with their habit of spending more than they have. They won't change until they are forced. So what will it take? For them to fall completely on their faces financially. Plus, it really sounds like you can't afford to help them if you are going to be unemployed soon.
So have the conversation. Tell them that you love them but you can't enable them any longer. Be there to support them but not with your checkbook. Trust me, this will never end unless you end it right now.
Q: What is the best way to learn to budget and get your finances in order? I do not budget and when I try it seems confusing and overwhelming. Please help. I want to manage my money better.
A: I know a lot of folks would agree with writer Mason Cooley when he said, ''A budget takes the fun out of money.''
Get what I recommended a while back in my Color of Money Book Club, ''Quick & Easy Budget Kit'' by Jennifer Openshaw. (For now it's just $4.95 for shipping/handling at The kit includes a CD and workbook that can be used together or separately. A budget puts more fun in your life. A budget is just a road map of what you are doing with your money. Don't fear it.
Write to Michelle Singletary at The Washington Post, 1150 15th St. NW, Washington, D.C. 20071, or

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