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The Most Asked Financial Questions And Answers

No matter where you are in life, you’ll have questions about your money; it’s an important factor in the world.

Not having the answers to these questions can cause undue stress. In fact, a 2022 survey by Bankrate and Psych Central found that 42% of adults had negative impacts on their mental health due to money concerns.

Everything from managing money to dealing with debt were factors causing worry, stress, trouble sleeping, anxiety, and depression. In order to alleviate a portion of that concern, these are the answers to some of the most asked financial questions.

Cartoon man with question mark and piggy bank: Title: The most asked financial questions and answers

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Why Can’t I Save Money?

If you can’t save money, you’re most likely spending more than you earn. This could be due to misplaced priorities, debt, or not earning enough money.

The first step to being able to start saving money is tracking your spending habits. What are you spending money on? Where does your money go each month?

Read More: Why It Is So Hard to Save Money and What to Change

If you don’t know where your money is going, you can’t accurately manage it. With this groundwork started, you can begin to make the steps needed to save.

To save money, you need to prioritize it.

Related: 10 Things to stop buying that can help you save money.

How Do I Save Money?

To start saving money you’ll need to change your mindset and/or create a budget.

When I first started earning money, it was easy to save it as well because I had the mindset of spending frugally. No matter how little or how much you earn, it’s easy to overspend if you don’t have the right mindset. 

Related: 6 Best Ways To Save Money For The Future

Creating a budget is also important. A budget is a tool to track how much money is coming in and where it is going. 

It allows you to make a plan for how much should be spent instead of wondering where your money went at the end of the day. However, a budget only works if you stick to it.

How Can I Make Money Fast?

If you need to make quick cash, here are a few things that could work for you:

  • Joining a rideshare company or grocery delivery.
  • Find a gig job you’re able to do on sites such as Fiverr, Upwork, or TaskRabbit.
  • Sell unused items around your home such as clothes, electronics, furniture, etc.
  • Rent an extra room in your home. I would also advertise it as having breakfast available (which could simply be eggs, toast, and oatmeal).
  • Sell cold drinks or snacks in a busy or touristy area. Be sure to check the legality of this in your location first.
  • Try out babysitting, house-sitting, or dog-walking.

How Do I Budget My Money?

I create a simple budget by dividing my income into three categories: savings, needs, and wants.

The first step is to calculate your total after-tax income from all sources.

Next, set a savings goal. Decide how much you would like to save every month and take out that amount first.

Then, list all of your expenses. Start with the needed items such as housing, utilities, etc. Then move on to the items that you can adjust your spending on easily such as food, entertainment, and so on.

Make the adjustments needed to your budget if it doesn’t cover your expenses. This may mean cutting some out or finding ways to increase your income

Stick to the plan. As you go through every month, track your spending to avoid going over your budget.

How Do I Improve My Credit Score?

Having a good credit score is important because it represents your trustworthiness and reliability when it comes to financial matters. If yours needs improvement, there are several steps you can take to do that.

  • Check your credit report and dispute any errors that could be the cause of your low score.
  • Lower your credit utilization rate by paying down debt or raising your credit limit.
  • If you don’t have one, get a credit card and pay it off on time every month.
  • Maintain good habits that help build your credit.

For more detailed information, take a look at my post on improving your credit score quickly.

What Happens If I Only Pay The Minimum Payment?

Making only the minimum payment is great in itself to avoid any penalties and help improve your credit score by being responsible. However, you will end up paying more in interest.

Financial institutions don’t make money by letting you borrow money with no conditions attached. The interest rates are how they collect extra fees on top of the balance you borrowed.

By paying over the minimum amount you’ll get rid of the debt faster and lessen the interest incurred.

I like to make everyday purchases on my credit card and then pay them off each month. This way, I still build up my credit but avoid any debt.

Where Can I Check My Credit Score For Free?

There are several ways to check your credit score for free such as using:

  • Experian.com: (FICO® Score 8)
  • Equifax.com: (VantageScore® 3.0)
  • CreditKarma.com: (VantageScore® 3.0 using TransUnion and Equifax credit report data)
  • NerdWallet.com: (VantageScore® 3.0 using TransUnion credit report data)
  • Discover.com: (FICO® Score 8 using Experian data) Having an account is not required
  • It may also be possible for free through your credit card or financial institution

By law, you are also able to obtain a copy of your credit report every 12 months. You can receive your credit report free yearly from:

  • TransUnion.com
  • Experian.com
  • Equifax.com
  • AnnualCreditReport.com (Created by the credit bureaus to check all three.)

Why Is My Credit Score A Question Mark?

If you cannot see a credit score, that means you do not have a credit history to give you one. You can start building your credit by opening a credit card and using it responsibly.

One of the best options to open a credit card for the first time is to get a secured card at your bank. If the possibility is available to you, getting a card on a family members line can also give you a great boost if the have a long and positive credit history.

How Can I Get Out Of Debt?

Getting out of debt takes focus and determination. As with everything regarding money, it starts with creating a budget to track the money coming in, going out, and where adjustments need to be made.

From there you will need to reduce your monthly bills and/or find ways to make more money that you can put towards the debt. Creating an emergency fund is also important to avoid anything popping up that can send you further into debt.

While paying the minimum on all your debts, pick one to pay extra on and get rid of it quickly. Once you get rid of one debt, you can use the money from that to get rid of the next debt quicker.

There are two popular types of payment methods. One is to pay down the debt with the highest interest rate first, this is the debt avalanche. Without accumulating so many fees every month, you end up paying less money in the long run.

The other method is the debt snowball which pays the lowest balance first and then moves on to a higher one. This method gives you more motivation because it feels like the debts are being repaid faster.

Can I Do My Taxes Myself?

You can do your own taxes by using a tax preparation software or for free through the IRS website.

If your tax situation is simple, it can be cheaper to file it yourself. The software I have tried goes step-by-step with you to input the details from your W-2 and other personal information.

When you have a complicated or atypical tax situation (such as itemized deductions, a business, or investments) it is better to consider hiring a tax professional.

How Much Should You Have In An Emergency Fund?

An emergency fund gives financial security by providing a safety net for times when the unexpected happens. Unexpected situations include car repairs, home repairs, medical emergencies, job loss, unexpected travel, moving expenses, and family emergencies.

Emergency funds should not be used to cover any planned expenses.

Your emergency fund is ideally supposed to cover a few months of your expenses (this does not include things such as entertainment and unneeded subscription services). It is generally recommended to be 3 to 6 months’ worth of your expenses and can be different for everyone based on their family size, lifestyle, and daily living costs.

For example: If your monthly bills are $2,500 per month, a 3-month fund would be $7,500 and 6 months would be $15,000.