Michelle Singletary learned everything she knows about money from her grandmother.
Michelle Singletary writes a personal finance column, The Color of Money, for The Washington Post. Her column is syndicated in more than 100 newspapers nationwide. She’s the author of three finance books, holds an MBA from Johns Hopkins University and is the winner of the prestigious Gerald Loeb Award for commentary.
Michelle has been learning, thinking, writing, researching and speaking about money management for decades. Yet the most important education she received, she says, came from the lessons her grandmother taught her.
Her grandmother raised five grandchildren while working full-time with a meager wage. Michelle remembers looking in the refrigerator and realizing that there was nothing to eat before she went to live with her grandmother. Yet her grandmother was never ashamed of their situation. She was resourceful. She made the best of the situation. She was humble. She worked hard. She taught her grandchildren to become independent, successful and contributing humans.
Today, Michelle joins us on the Afford Anything podcast to talk about what she learned about financial independence, and her views on the FIRE movement.
Here are a few takeaways from our conversation.
#1: Spending is emotional.
If you grew up poor, you may not want to buy thrift-store clothes and drive beater cars in your adulthood. You may crave buying the fancy things that you never thought were within your grasp. Yet you can’t enjoy that lifestyle while also building wealth and saving for retirement. There’s a tradeoff between living like you’re rich vs. actually becoming rich.
At a mathematical and logical level, we understand this idea. Yet spending is emotional, and often when people are spending, they’re expressing deep-rooted emotional factors. We should keep this in mind as we talk about finances.
#2: FIRE is not a rejection of work, it’s an acceptance of life.
#3: FIRE is fueled by modern social structures.
The resurgence of FIRE may be, in part, a social and cultural reflection of the fact that workers no longer spend their careers with one employer, as people did in the 1950s. Our workforce is more mobile and transient today, and this allows people to exit the workforce if their finances permit.
#4: The FIRE movement is a rejection of consumerism.
The essence of the movement is a rejection of consumerism.
FIRE is not about frugality, it is about anticonsumerism and the joy of production.
Frugality is a fixation on spending; sure, you’re trying to consume for less, but you’re still spending. You’re thinking about thrift stores and yard sales and coupons.
Anticonsumerism asks the question, “do we need all this stuff in the first place?” Do we need the stuff that we find at thrift stores and yard sales and coupons? Or can we skip that by buying less in the first place?
The best discount is to save 100 percent by not buying anything.
#5: Appreciate that many people in our communities are the working poor.
Many people in FIRE movement are flippant about the experience of earning a low income. They’ll make broad, sweeping statements like “it’s not what you earn, it’s what you save.”
It is what you earn. Your income matters.
To claim otherwise denies the reality that if a worker earns $11 an hour, an unexpected $50 expense is stressful.
The only people who claim that “it’s not what you earn, it’s what you save” are people with discretionary income. Let’s never forget that there are millions of people in our cities and towns who are the working poor, because when we forget this reality, we as a collective start appearing out-of-touch.
#6: Put the most important things first.
Michelle mentioned that her line-item for “giving” is at the top of her budget, even above paying for her mortgage.
If you want to find the money for something, make it the first thing that you put your money towards.
If you list it at the bottom, then there’s never enough money for it. If you want to make sure it happens, put it at the top.
Those are some lessons from today’s episode. Enjoy!
- Michelle’s Website
- Michelle’s articles on The Washington Post
- Michelle’s latest book – The 21 Day Financial Fast
- Elon Musk’s mom’s Instagram account — @mayemusk
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