Michelle Singletary is all about cash.

“Cash is king,” Singletary said. “In this recession, if you have cash, you’ll be OK.”

During a lecture in the Joyce Hergenhan Auditorium Thursday, Singletary, a Washington Post financial columnist, emphasized frugality and explained how to save, spend and get the most out of money.

“Every dollar I get, I probably only spend 70 cents of it,” she said.

The presentation focused on the five steps of lasting wealth: saving, taking advantage of time, eliminating debt, diversifying investments and spending less. Throughout these topics, she weaved in her own life story of early economic hardship, which convinced her of the necessity of financial security.

Singletary’s grandmother, who she calls “Big Mama,” also taught her about the need for financial security, she said.

“The basics of what I know did not come from the financial wizards,” she said. “The person who influenced how I handle my money the most was that little old lady, ‘Big Mama.’ She taught me the basics of everything I know. ‘Big Mama’ taught me one thing … My grandma said it’s not what you make that matters, it’s making do with what you have.”

Singletary’s Washington Post column, “The Color of Money,” appears in more than 120 newspapers. Singletary also hosts a live online chat at washingtonpost.com, produces a successful e-newsletter and hosts a half-hour personal finance reality show.

Singletary stressed the importance of not using credit cards without the funds to pay the bill. She said there is a disconnect people face when they use their credit cards instead of cash.
People spend 30 to 50 percent more when they use credit cards rather than spend cash, Singletary said.

If someone does not have a job, he or she should not be shopping, Singletary said. The people most commonly applying for bankruptcy are college students and seniors, she said.

“We buy cars we’re not sure we’re going to pay for. We buy college educations we’re not sure how we’re going to pay for,” Singletary said. “We live out life on a monthly installment payment. That is why we are so mired in debt. We buy stuff and hope we can pay for it.”

Singletary is saving money so her kids don’t start off in financial bondage, she said.

“I have a plan for my money. I have a purpose for my money,” she said. “I know what it’s like to be hungry… every penny ought to have a purpose. I’m not going to wear my wealth away. If you Google me, I have on the same four outfits.”

During the question and answer session, Singletary fielded questions from the audience that challenged her frugal methodology. But she challenged the audience members back to examine the nature of their purchases.

“Is it a need or a want,” she asked the audience.

Dontre L. Conerly, a graduate student in the S.I. Newhouse School of Public Communications, traded quips with the speaker over the difficulty of applying some of her methods of saving, specifically the 21 day shopping fast wherein the only purchases made are necessities like rent and food, as opposed to wants, like clothes. It takes 21 days just to develop a habit, he said.

“She has certain ideas in mind about consumers, but to college students those are well above our means,” Conerly said after the lecture. “Her points were valid, but they need to be tailored to people with different values.”

Taryn Simmons, a graduate student in Newhouse, said she agreed with Conerly about the blanket frugality and its challenges.

“For a person like me, it’s not in my behavior,” Simmons said.

Though Singletary acknowledged the difficulty of committing to this challenge, she highlighted the benefits, including having emergency money and the ability to build a college fund.

“I’m cheap on the stuff that doesn’t matter,” she said. “I’m extreme, because I’m trying to move you to a center.”

Published on April 21, 2010 at 12:00 pm