Smart Money Podcast: ‘The Color of Wealth’: Overcoming Structural Challenges

Welcome to NerdWallet’s Smart Money podcast, where we answer your real-world money questions.

This week’s episode is dedicated to a conversation about the structural and financial challenges Black women face and how to overcome them.

Check out this episode on any of these platforms:

• Apple Podcasts

• Spotify

Our take

The numbers behind the racial wealth gap in America are staggering. For example, there’s a $200 billion annual gap between Black and white recipients of inheritances, according to a 2021 McKinsey Global Institute report. For many Black women, this wealth gap makes it more difficult to build wealth and also build enough for future generations.

Some of the structural issues that prevent Black women and Black moms from building wealth include structural racism, redlining, the gender pay gap and a lack of access to financial education. However, learning about these issues and how to manage money can help Black moms navigate challenging circumstances to build wealth for themselves and their children.

There are several ways Black moms can actively work toward closing the wealth gap, including investing and owning homes. For moms who are apprehensive about starting on their wealth-building journey or don’t feel they have enough to start, it’s OK to start where you are. That could look like putting away small amounts regularly or improving your financial literacy so you can share that knowledge with your kids.

More about managing money on NerdWallet:

How to Set Financial Goals

7 Black Financial Influencers to Follow

Why Financial Advisors of Color Matter

Other episodes in the "Color of Wealth" series:

‘The Color of Wealth’: Investing for Your Family’s Future

‘The Color of Wealth’: Emotional Trade-Offs of Wealth Building

Have a money question? Text or call us at 901-730-6373. Or you can email us at [email protected]. To hear previous episodes, go to the podcast homepage.

Episode transcript

Sean Pyles: Welcome to the NerdWallet Smart Money podcast, where we typically answer your personal finance questions and help you feel a little smarter about what you do with your money. I'm Sean Pyles. We have a special episode in store for you today. Personal finance Nerd Elizabeth Ayoola is kicking off our new series called "The Color of Wealth," where she'll talk with money experts about how Black women can build wealth, including the challenges they face in how to balance motherhood and money goals. Welcome to Smart Money, Elizabeth.

Elizabeth Ayoola: I'm happy to be here, Sean, even happier to be talking about this topic. It's one that gets my wheels turning and something I think is relevant as I am a Black mama myself and I'm on a journey to building wealth.

Sean Pyles: So, Elizabeth, since this is your first time on Smart Money, can you please tell us a little bit about yourself and why you wanted to talk about these topics on the podcast?

Elizabeth Ayoola: Of course. So I'm a writer at NerdWallet, and as I mentioned earlier, I'm also a mom to a rambunctious 5-year-old. I wanted to discuss these topics on the podcast because I'm a late bloomer when it comes to investing, and one reason is a lack of access to financial information and just general information about how to build wealth. So I want to share the love with other Black moms now that I've been able to map out a clear path to building wealth for my son and I.

Sean Pyles: Love it. So who are you talking with this episode?

Elizabeth Ayoola: Today, I'm going to be speaking with Michelle Singletary. She's a journalist and personal finance columnist at The Washington Post. Very fancy. Michelle won a 2021 Gerald Loeb Award for commentary for her series, "Sincerely, Michelle," in The Washington Post, and it essentially discusses misconceptions around racial inequity. So today Michelle is going to help us shed light on structural issues around race and wealth-building for Black families, and hopefully she's going to share some of her personal experiences in the process.

Sean Pyles: Great. Well, I will let you get to it.

Elizabeth Ayoola: Michelle, welcome back to Smart Money.

Michelle Singletary: Oh, I'm so glad to be here again. Thank you for having me.

Elizabeth Ayoola: You're welcome. For those listening, Michelle has been here before. In 2021, she sat down with us to discuss getting ahead of your next money crisis. So how are you enjoying 2023 so far, Michelle?

Michelle Singletary: Well, I don't know. I'm probably like a lot of people. I'm very apprehensive, worried about inflation, worried whether or not we're going to get into a recession officially. So I am cautiously optimistic, I would say.

Elizabeth Ayoola: I know, these are very, very uncertain times, so I find myself constantly checking the news, seeing what's going on with the economy, trying not to buy the things in my Amazon and Zara cart to save money, but we really don't know which way it's going to go.

Michelle Singletary: 2022, the word for the year was inflation. And I think for 2023, it's also going to be inflation, and inflation erodes your ability to save, to build wealth because you're spending more money on the things that you need like housing and food and transportation. Since so many people are living at the financial edge or paycheck to paycheck, having to spend more of that for the necessities leaves you with less to build your wealth.

Elizabeth Ayoola: I think that's a great segue into the topic of today because a lot of the times people who tend to suffer the most are sometimes people of color because of where we are financially and our socioeconomic situations. So that leads me into my first question, which is, what made you gravitate towards discussing topics around race and inequality?

Michelle Singletary: I'm going to be really honest; I try to stay away from the whole issue of race a lot because it is so fraught with criticism and people accusing you of whining. I wanted to just talk about money because everybody needs money, but then George Floyd happened and the riots and more folks being shot. It just hit me that I need to not run away from this issue of race. When you're a woman of color and you're climbing up the ladder wherever you are, you want to be there because of who you are and not the color of your skin, and so you don't want to "play the race card." So you tend not to want to lead with that.

But when I did the series for "Sincerely, Michelle," one of the reasons why I did it is because I wanted to say, "You know what? This stuff is happening. It's real; it's current." I mean, I think that was what led the series because we often think that we are post-racial, that discrimination is just not as bad as it is. "Can't you all stop talking about slavery?" Those kinds of phrases. The fact of the matter is there is still a wealth gap that is directly linked to policies both by corporations and the government that has kept women and minorities and people of color behind financially.

So when we talk about wealth gaps and how much white Americans have as opposed to Black Americans, especially Hispanics, it's almost as if we're saying, "Well, what did they do wrong? Why don't they have much in savings? Why don't they own homes?" People want to overlook the fact that there were systemic policies, racisms that were in place that kept these folks behind. So for me, I walked that line between personal responsibility and society responsibility, and both have to be working to help people create wealth.

Elizabeth Ayoola: Oh, I love that. I can especially relate with what you said about the whining and people feeling like, "Oh, it's just something we need to move on with because it happened so long ago." But people who tend to say that don't seem to know what you just said, which is it's a structural issue, and these laws and policies are still in place and still keeping people oppressed. So it's not something we can stop talking about until those things are reversed. But I love how you add the touch of the importance of personal responsibility because, like you said, I think both need to work together for things to change.

Michelle Singletary: That's exactly right. I mean, listen, in 2020, women, no matter the race, earn on average 84% of what their male counterparts earned. This is according to Pew Research group. So when you drill down with the numbers, Black women earn on average 58% of what their white male counterparts earn. A lot of that is appointment discrimination. When we know that when Black women have the same qualifications as their white male counterpart, they're paid less.

Now, having said that, so what do you do if you're that woman? You are paying less. You are waiting for things to catch up. You're waiting for the corporations and companies to do the right thing. You're waiting for the government to enforce anti-discrimination laws. But while you are waiting, you have to do what you can to make that 58% less work. That means making better financial decisions. Listen, I love NerdWallet and what you guys do because that's what you're doing. You're providing people with information so that on a personal level, whatever they're earning, even if you're earning so much less than what you deserve, how do you make that work for you?

Elizabeth Ayoola: Absolutely. But it's almost impossible to do that without the education, right?

Michelle Singletary: That's right.

Elizabeth Ayoola: So I definitely think it's important.

Michelle Singletary: You have to inform yourself. Listen, I was raised by my grandmother. She took in five of us total, my siblings and myself. The one thing I loved about my grandmother, Big Mama, even though she never made more than about $13,000 a year as a nursing assistant at a hospital, she never apologized for what she couldn't give us. She never made herself feel bad that she couldn't get us the latest shoes or clothes. She's like, "Whatever you make, you make that do for you." I love that. And guess what? She was a homeowner. Guess what? When she retired, her home was paid off. Guess what? She lived 20 years in retirement on Social Security, a very small pension and $20,000 in the bank. When she died, she had that same $20,000 in the bank.

So I use her as inspiration. I mean, this is a woman whose grandparents were enslaved. This is a woman who was right in the middle of the civil rights era. She said, "You know what? They are discriminating against me, but I'm going to take this little bit of money that I'm making and I'm going to make it work. I am not going to crush myself with debt." She hated debt. She's like, "I am not going to go out there and be a consumer when I need to be a saver." And despite all the things that she went through, she's like, "OK, I got this little bit of money, I'm going to make it work." That's what you have to do. I just think that that is … for 2023 and forward, as we wait for policies to catch up to do the right thing, that's what you have to do with your money.

Elizabeth Ayoola: Thank you so much for sharing that. That is so beautiful and so inspirational. I love that. I also love that you say she didn't apologize for not being able to give you the things that she did because I think that helps to cultivate a positive money mindset. Because it's not her fault that she was discriminated against, but she didn't victimize herself and did the best with what she had, and I love, love that.

Michelle Singletary: This is particularly a good lesson for those who are maybe single parents because oftentimes you feel like you have to do more for your children. Even in two-parent households, you try to do so much for your children. Sometimes that's a detriment of your financial wealth-building. They don't need all that stuff. I'll have people say, "Well, I need to move to a bigger house." "Why?" "Well, my kid needs more backyard space." "Well, you know what? Take them to the park."

Don't sink all your money in a mortgage that barely helps you get by. Now, I'm a big homeownership believer, but if you buy too much home, if you stretch yourself too much, there is not enough left over to invest for your retirement, to invest for your kids' college education to build that emergency fund. So if your kids have to double or triple up in the room, they're going to be OK. If they don't have as much yard as you'd like, they're going to be OK. If they don't have a closet that's big enough to put all the stuff that you would've put in there, they're going to be OK.

What's not OK is carving out enough, even as little as you can to offset say, student loans, to be able to save for your retirement so that you aren't living fully on Social Security, which is not enough for a lot of folks. So that's what my grandmother taught me, that even at her low, low salary, by teaching me to be OK where I was, to not look to see what everybody else has, that you can build wealth for yourself, and really what it is is financial security.

Elizabeth Ayoola: Absolutely. Love what you said there as well about single moms. I'm a single mom myself. I have one child, which I did mention earlier, and maybe three years ago I wasn't in the financial position that I am now, and it was just that. When I started out, when I moved back to the States, we were living in a room in someone's house because while I did have enough to rent a one-bedroom apartment, like you said, it was going to spread me thin. So I was like, "Well, what's the smarter thing to do here? Share a room with him in someone's house, which was a lot cheaper until I have enough to comfortably move into an apartment." And like you said, he was fine. The most important thing to kids is usually that they have love, a sense of security and that you're there for them.

So I think a lot of the times, sometimes, us Black people as well, who grew up with trauma, especially financial traumas, are afraid of re-traumatizing our kids. So as you said, we stretch ourselves too thin. But I think it's important to remember that, like you said, they'll be fine.

Michelle Singletary: And they will be. I love that you did that, but it is a hard sell for a lot of people. "I can't live in somebody's house." "The kid needs their own room." They put all that out. So now you get this apartment or you get this house and you are struggling, and then you got to take on another job. So guess what? Then you're not there for your child. So what do children need is your presence, and that is what is going to help them stay secure. My grandmother loved on us, and she loved us with force. "No” was her favorite word, and it was my favorite word for my children. Even though my husband and I were well positioned financially, by the time we had our children, we still denied them a lot of stuff.

They thought they were straight off; they did not understand where we were economically because they're like, "What is these shoes I'm wearing?" But guess what? When they walked across the stage and graduated from college, they had no debt. When my oldest went to graduate school and got her master's in social work so that she could be a therapist, understanding that she wasn't going to make a whole bunch of money, she had no debt. So in reflection, she appreciated that even though we could have given them more stuff, we decided intentionally to use that money to save for their college over 20 years so that they could have a life and do what they were God-gifted to do.

One kid is a teacher; one, as I said, my daughter is a therapist; my son, he is on the autism spectrum. He's still making his way as a young adult, but he now at 24 is still trying to make his way. He doesn't have the pressure of having debt and being out there on his own. He can take his time because he needs the time. That's what we have taught them about making intentional decisions about your money even when there's not a lot there.

Elizabeth Ayoola: Yes, love, love, love, love these lessons. So I'm going to quickly bounce back to what you mentioned about homeownership because it actually happens to be one of the questions I have for you. So in 2022, 74.6% of white households own their homes compared with just 45.3% of Black households, which is a huge gap. So we're still far behind when it comes to building wealth that way. Now I'm sure the current market doesn't help considering interest rates and home costs are high. I can attest to that because I feel like right now I was thinking about buying a home, but it's just not looking very like the best time to buy. So with that said, what are some common barriers that you feel like Black families face in terms of homeownership?

Michelle Singletary: Well, you really need to start with some of the barriers is credit history. We sort of think of credit as an equalizer. "So you pay your bills on time, everybody should pay their bills on time. How could that impact your credit?" But baked into the credit-scoring system — the one that most lenders use — is the fact that you've got to have credit and use it and homes that you've maybe traded up to or traded down to. So because people of color tend to rent more, that information, on-time rent payments, isn't factored into the credit system. So even though you may be paying your rent on time, that's not in the credit score. So you may have a depressed credit score simply by the fact that you're renting or perhaps you pay a lot of your bills with cash. That's not reflected because in order to have good credit, you got to use credit, and then you got to use it wisely to get a good credit score. So that's been a barrier.

Then also the income is a barrier. If we are already making less, that means you have less ability to save, and less income means you can't qualify for maybe a house in where you live. We tend to be concentrated in areas where housing is very expensive. So you package all of that together, it contributes to the lack of homeownership, and there's still redlining going on. We see studies where two applicants, same sort of information, maybe the African American will get a loan, but it won't be at the same terms as the other family, which has the same income and same credit history. We know for example, during the Great Recession that Black homeowners got worse loans, predatory loans even when they had a credit history, a credit profile that was similar to a white borrower. That's baked into the system. So all of that contributes to the lack of homeownership.

Then again, we're in areas where homes cost a lot. Then if you're African American, you live in a community, let's say you bought a home and you want to trade up. Well, your home is going to be appraised at a lesser amount than a similarly situated home in a white neighborhood. So you might buy your home for $150,000. Ten years later, it's worth $160,000. But that same home, that same quality neighborhood in a white neighborhood, that $150,000 might have appreciated to $300,000. So you can see that you can't move because you don't have the equity to maybe put into the next home. All of that contributes to a lower homeownership rate.

So hopefully we are working on ways to bridge that gap because homeownership is a way to build wealth, but it's not the only way, I have to say. And I think you're doing the right smart thing about holding off until it's right for you because, again, the banks will qualify you for a loan using your gross income and how much debt you have, but you don't bring all that money home. So you need to really seriously think about whether homeownership is right for you at that time, and it's not right if there's no cushion in your budget to do the other things. You can build wealth as a renter because anybody who owns a home knows it's a money pit.

I've been a homeowner since I was about 22. I only rented one year in my life. So I've been a homeowner. But every home, I mean the money that you sink in for maintenance and improvements more than offsets what you might have been able to save. If you are a renter or you don't own a home, you can build wealth, just take that money that you would've put in a home, the down payment and all and put it in the market, build a diversified portfolio, low-cost index funds, and you will find in years to come that you have built just as much wealth as a homeowner and wealth that you actually can reach and touch and get that you can sell much more easily than having all of that money tied up in a home.

Elizabeth Ayoola: Absolutely. So I love that you mentioned that homeownership is not the only way to build wealth. We know that investing is one way for people to build wealth as well. So what are some structural issues that may keep Black moms from investing or kind of starting that journey?

Michelle Singletary: I think right now, in this time period, I think because African Americans were denied the ability to invest, there is this fear of investing that is legitimate. However, because of that, we follow bad advice. So "only buy a home." Well, that's just one way to build your wealth. You should be investing in the market. The one thing that has concerned me was this sort of rhetoric about, "Oh, well, Black should be in cryptocurrency. We were denied investing, but now we need to catch up because this is the future." But cryptocurrency is very speculative. So I would just caution you not to listen to people who think that you can jump ahead and build wealth quickly by these very speculative investing vehicles. Sound investing is boring.

It's boring, and boring is OK. You buy a low-cost index fund, you do something called dollar-cost averaging, you invest a certain amount of money on a regular interval every month. For example, $100, $200. That's basically what you do with your retirement plan, and you buy it no matter what the market's doing. So you put in $100 no matter what the market's doing. So when the market is down, you are buying more shares. When it's high, you're buying less, but it eventually evens out. So that's the key. I am a boring investor, and guess what? I got a lot of money. I am not a speculative investor. Perhaps there are people who win at speculative investing because that's what you focus on. "Well, so-and-so made X amount of money." But to me that would be the same as you're going into a casino and you see winners, but the vast majority of people are losers.

Because you think about this when you have the slot machines, for example, and somebody wins — all these bells and stuff go off. I always wonder, "Well, but why would I want other people to know that I won?" Well, the casino owners want you to listen and think that you can win, too. That's why it's loud and flashy. Same thing with cryptocurrency. It's flashy. They want you to think … Sure, with certain schemes, the top people will make money, but the vast majority of people lose money. Be a boring investor, regular money, low-cost index funds, you'll do well, you'll be wealthy and you won't have taken on extra risk.

Elizabeth Ayoola: Yes, and you have more free mental space.

Michelle Singletary: That's right.

Elizabeth Ayoola: All my investments are automated, and I do not worry about all the ruckus going on in the market. So I'm with you on that one.

Michelle Singletary: Absolutely. That's the way to do it.

Elizabeth Ayoola: So I want to ask, how can Black families overcome the challenges that you mentioned of issues with their credit and also redlining, if possible, what are some ways that they can kind of overcome that?

Michelle Singletary: So with redlining, let's talk about housing. The one thing that you can do is to be a smart home shopper. You want to be very intentional about getting the best loan that you possibly can. So that means shopping around. Just don't go with the first lender who reaches out, and make sure that you're getting a really good loan. Get a couple appraisals if you're looking at a home to make sure that you are buying a house at the right value. These are all things that you got to sort of put work into to make sure that your package, once you do decide to get a home, is on point.

Here's one thing I would say: Redlining is still in place and active, but the other thing is appraisal bias. We've seen studies now where Black family appraisal comes in, appraises the house at a certain price, and then they changed the look of the house. They took down the pictures of Black family and had a white person come in, and the house appraised for higher. So you want to watch out for those kinds of things.

So one of the major factors in buying a home and getting the best loan deal is having a high credit score. All you have to do to get that is to pay your bills on time and have little debt. You want to pay down a debt as much as possible before you have the house. I try to tell people to walk into the whole process with absolutely no debt — no car loan, no student loan debt, no credit card debt. So I've had three houses in my lifetime, and each time I went into the loan process with no debt. It's really funny when you do that because they see your application and they go, "You don't have no debt?" And I was like, "No." So if you can position yourself that way, you make yourself a better loan applicant and you hopefully decrease the opportunity for them to discriminate against you. You've got a good solid job. You've made sure that you are buying a house well within your affordability, and your credit is good. I pay my credit card bills off every single month.

Here's also a little bit of a tip. Even within the month — so I pay off my credit card debt every month — but even within the month, I don't carry a lot. So people probably heard, "Oh, you shouldn't have more than 30%." So they use it as a target. But even for those who pay their credit card bill within the month, they only use about 8% of their available credit balance. Then I pay my credit card bills off before the due date, so it doesn't even have a chance to even register that I even have debt for that month. This is sort of like a little tip. And so that's sort of how you reach that. But it really doesn't matter once you get over the high 700s, like 750 or higher, it's all the same. So it's just like bragging rights.

Elizabeth Ayoola: Bragging rights are allowed.

Michelle Singletary: Yeah. Then the last piece of advice I say for homeowners is that the bank will qualify you for a certain amount based on your gross income and how much debt you're carrying. But I need you to qualify yourself on a different measure. I need you to qualify yourself based on how much you need to save.

So when my husband and I were looking for our first home as a couple and then we moved up, we factored in our own qualification — the fact that we wanted to save aggressively for retirement. We factored in the fact that we were saving for the kids' college fund. At the time that I had my first home, I was helping take care of my disabled brother. I factored in the monthly amount that I gave him to help for his living expenses. We also made sure that one of us could carry the mortgage if one of us lost our job and we had beautiful homes. Maybe we didn't have the $1.5 million home that the banks might have said we would've qualified for, but we had nice, comfortable homes with a little bit of backyard, took the kids to the park. That allowed us the freedom to de-stress of having to worry about if one of us lost our jobs.

Elizabeth Ayoola: That is so clever, and I think it can be hard. I don't know about past generations, but it can be hard for this generation to do with so much social media influence and feeling like you need to show and tell everything. You feel like you want to have the biggest and best of everything. So I think having that restraint to say "Financial freedom is more important than looking the part" can be really difficult for people. So I commend you guys for doing that.

Michelle Singletary: Yeah. It's very hard to do that. And think the younger generation are doing a lot of things right. They're getting it right. They're saying, “I don't want to work till I'm 70." They're hopping from job to job as opportunities present themselves. When I was growing up, it's like, "You work for the company for your life." They're like, "Mm-mm. You're not treating me right. I'm finding a job that will." They have it right.

The one thing I will say is, don't listen to the “they” who tell you things that you should have or how you should look. Dress for success, and your shoes have to be this. That's a bunch of bunk because none of these people are paying your bills. None of these people are going to bail you out if you lose your job. Or maybe you have to stay home with the sick child for some time, or maybe you become ill. So you've got to stop this whole idea that you have to look the part. Just look neat and nice, that's all that is required.

Elizabeth Ayoola: Absolutely. I second that. So I have two more questions for you. The second to last one I have is, do you have one or two money management tips that you can share with Black moms based on your personal experiences as a Black mom? Black moms who are trying to build wealth, more specifically.

Michelle Singletary: Yeah. So the first one we've kind of talked about it a little bit is, and I'm taking this straight from my grandmother, Big Mama, "Don't apologize for what you can't get those kids." I felt no guilt when my kids are looking at me with those pie eyes, "Why can't you get me this?" Or "Why can't I have this video game?" No guilt whatsoever. Christmastime coming, they didn't get a whole bunch of stuff because I got to look down the road. What is going to be more advantageous for them financially? Putting money in a college fund for them or having savings so that if you lose your job or you have a disruption in your income, you can keep things going. Or that temporary, momentary pleasure of seeing them go, "Oh, thank you, mom." And then completely forget it after that. And I would say that's one thing.

Then, I think secondly is that you really need to be intentional about how you handle your money. No matter where you are financially, I would say, read as much as you possibly can. Understand it. Take classes. I have a financial ministry at my church. Find one in your community and stay in there continually to inform yourselves. I mean, I've got a column in The Washington Post, you should be reading. You should be reading NerdWallet. It should be bookmarked on your phone or your computer. Even if you're not looking for something.

You know what my pastime is when I'm sitting around? I can't say. This is probably TMI, but I'm in my bathroom, I'm looking at websites about money, I'm reading about money. I'm reading Consumer Reports. You might be watching "Housewives." That's not going to help you build your wealth. Make sure that the time that you spend in some of your leisure time is spent informing yourselves. If you don't understand something, making sure that you read enough that you do understand it. I think that's the sort of the key to building wealth is just having good information based on your own personal situation and stop listening to people who say, "You should have this or you should do this or that." Make sure that whatever you do is appropriate financially for you. If I can add a third piece of advice, remember what I said about my grandmother, about not feeling guilty about what you can't do?

Elizabeth Ayoola: Yeah.

Michelle Singletary: That has been revolutionary for me in my personal financial life as a Black mom of three kids. My husband, I practice it. And I'm telling you, it's so freeing. It's soul freeing not to feel guilty. At the time, our kids weren't happy always, but we knew — my husband and I — that at the end of the day, they would be better off having less. The key word in our house was, "No." I love the word "No." It's a complete sentence.

Elizabeth Ayoola: Yes. Excellent, excellent, excellent. I definitely feel guilty when I say "No" sometimes to my son, but I remember that he has to learn that everything's not always going to be a "Yes." Also I heard something the other day that said, "We underestimate humans' ability to be able to deal with disappointment." That was profound for me. Disappointment is not going to kill them. It's a normal thing in life, and it's something they have to learn to deal with.

Michelle Singletary: That's right, and it builds character. Oh, my gosh, as a Black mom, I learned to say "No." I learned to say "No" with humor, and I learned to say "No" with no guilt.

Elizabeth Ayoola: Love it. Three pointers, three ways to say "No." Taking all of those on board. I hope everyone else is, too, who's listening. So my last question for you, or maybe just a contribution that you can make is, are there any resources that you'd like to share that can help Black moms who are just getting started or maybe facing challenges around some of the structural issues that we've mentioned?

Michelle Singletary: The one thing you don't want to do as a Black mom or any mom or dad is take your advice from the person who's selling you whatever it is that you're trying to buy. So when you go get a house, don't just listen to the real estate person or the lender, do some research on your own. When you go buy that car, you should not be getting the most of your information from the car dealer. You should have already walked in there knowing what it costs, what features you want. All they need to do is process the paperwork, and then hopefully you buy with cash.

Personal finance is very intimidating. It's very complicated. And I understand why people just, their eyes glaze over. I get it. But you got to punch through that, investigate everything. I'm going to be truthful to you. I don't even buy a pencil without like, "Is that the right pencil?" I research everything, even while I'm in the store. If I see something, I'm on my phone. "OK, is this the right thing? Who said this is good?" I'm researching, looking at reviews and calculating and pausing. See, when you pause, you have more money.

The reason why that point is important is because the lenders, financial institutions have decreased the amount of time it takes you to purchase something. That's why credit is so successful and why you've got Apple Pay, you've got all these things. I can now take credit card and tap the machine. I don't have to put in any number or pin or anything. That means that you are not spending enough time thinking about that purchase. So the more you pause before you purchase, you will have more wealth.

Elizabeth Ayoola: Wow. I can count on two hands the amount of times I've been in a line or something wanting to pay for something and they take too long and thank God they took too long because I put it back down. Because I had a minute to pause and be like, "You don't need these things, Elizabeth. They can stay at the store."

Michelle Singletary: That's exactly right.

Elizabeth Ayoola: Michelle, this has been such an engaging and enlightening conversation. I appreciate all of the knowledge you shared, your personal experiences, telling us about how you are teaching your kids to be financially savvy. I'm sure all of this information is going to be so helpful to Black moms and also to anybody that's listening who's a parent or even not a parent. So I really appreciate your time, your contributions, your wisdom. Thank you so much for coming today.

Michelle Singletary: Oh, thank you so much for having me.

Elizabeth Ayoola: That's all we have for this episode, guys. To share your thoughts on how to budget, pay off debt or manage finances as a parent, shoot us an email at [email protected]. Also visit nerdwallet.com/podcast for more info on this episode. Remember to subscribe, rate and review us wherever you're getting this podcast.

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This episode was produced by Sean Pyles and myself. Liz Weston helped with the editing. Kaely Monahan mixed our audio. And a big thank you to the NerdWallet copy desk for all of their help. With that said, until next time, turn to the Nerds.