Perhaps you’ve heard the quote, “If you want the answer, ask the question.” Seems so simple and straightforward, right? And yet, how often do you resist asking questions — especially when it pertains to money?
How often do you feel that having a money-based question means that you are lacking in some capacity?
Often, when people do ask me money and money-related questions it is done rather sheepishly. This is true whether the question is because the person wants or needs information; to get an opinion or advice; or to ask for help or permission.
What always amazes me is that to my ears their question is very common. Perhaps it is because I hear their questions all the time due to the nature of my work.
But to them, it feels very personal. For starters, they feel like they are the only one without an important answer. Other times, they feel like they should know the answer (this is usually driven by expectations related to education, profession and family background).
Everybody, and I do mean everybody, regardless of where they fall on the income and wealth spectrums has money and money- related questions. This is true despite a culture that seemingly awards “know-it-alls” who operate as if having a question represents a personal weakness.
Can a question make you feel vulnerable? Absolutely!
Can a question be difficult to ask because it makes you feel awkward? Yet bet!
But never, ever, is having a question indicative of a character flaw.
I believe we need to feel less self-conscious, individually and collectively, about the questions we have – especially where money is concerned.
That’s why I’m dedicating the next few posts to the power of questions and the courage it takes to ask them. I want us to embrace the vulnerability of questions and use them to make our lives – and the lives of those we care about – better.
Let’s start with the questions I tend to get asked the most – listed in no particular order. Though I’ve clustered together questions of a similar nature:
Should I pay off debt or save?
I know my position on this is not popular in some circles. But debt in and of itself isn’t bad. It is what allows people to buy homes, cars, go to college (or send children to college), start businesses, etc. Heck, much of capitalism relies on debt.
But, many people are drowning in debt and feel overwhelmed by both the total balance they are carrying, as well as the monthly payments – especially with their credit cards and student loans.
Consumer debt reached almost $13.5 trillion dollars in 2018 (for all types of debt), according to the New York Federal Reserve. So, I get this question.
However, my answer is always the same: Do both! My suggestion is to shift from thinking of it as an “either/or” proposition. Instead, take a “both/ and” stance. Even if it means it will take longer to get to a zero balance and the amount you’re saving is “small.”
How should I pay off my debt?
Again, my suggestion may not be popular: It’s tempting to want to tackle the debt with the highest APR. But, you efforts will actually gain more momentum if you apply the snowball method. This is when you prioritize the debt with the lowest outstanding balance (regardless of the APR). Once that is paid in full, you apply that payment to the next credit card (or other loan) – until everything is fully paid.
How can I improve my credit score?
Despite what some would have you believe, there’s no magic solution here. You improve your score by paying your bills on time and lowering your credit utilization ratio.
Should I refinance my student loan?
Whenever you can lower the interest rate you’re paying, by all means do so! But don’t lower your monthly payment, keep it as is so that your monthly payments makes a larger dent in what you owe!
How much should I save for my emergency fund?
You’ve likely heard the common wisdom: save 3-6 months of your living expenses. That’s a good guideline. However, so much depends upon your particular situation. For example: are you single or married; are you in a single-income or dual-income household; are you the breadwinner; do you have children and what are their ages; is your employment or business generating consistent and steady income or does it fluctuate?
The more your household depends on you, the more months you may want to be able to cover in the event of an unexpected change in your income. And that may be greater than 3-6 months.
How much money will I need to retire?
This is always so challenging because there are so, so many variables. Like how much have you saved already; do you plan to work after you “officially” retire; who else will you be financially responsible for when you initially retire; how long will your money need to last after you retire?
I don’t want to invest because I am afraid of losing money.
Okay, this isn’t a question. The statement, however, stems from a fear about investing and not wanting to make a mistake and/or not knowing whom to trust. The statement is their way of asking: “What do you recommend that will give me certainty and make me feel safe?”
Can I afford my lifestyle?
It may surprise you to learn that I get this question mostly from high-earners. Sure, sometimes the solution is a pretty straightforward “spend less.” What is less straightforward is this: “Spend less on what?” Because usually the expenses aren’t extravagant; they are often related to taking care of children and/or parents. Therefore, the answer to this frequently involves having to navigate and negotiate uncomfortable trade-offs.
How can I change my mindset about money?
By the time prospects and my coaching clients come to me, I’m not their first stop. Whatever the situation, they’ve tried to answer their questions before – perhaps on their own or with someone else. But, they aren’t satisfied with their results.
This will often spark an aha–an awareness that part of getting the answer that is right for them involves exploring their relationship with money. As open-ended as this question is, I love it. And I am so glad they see fit to ask it!
Same Question; Different Answers
One person could ask because they are seeking more data (information). Another could ask because they want an opinion or advice. And yet another is asking because they need guidance in making a decision or taking action.
Not understanding this distinction is one of the reasons some people resist asking questions that span the mundane to the significant.
Have you asked any of the above questions? If yes, where did you go to get answers?
Do people come to you looking for answers to money and money-related questions? If yes, what are the most common ones you get asked? How are they similar or dissimilar to the list above?
Even though money is something you and I use everyday, there’s something about it that makes it ripe for never-ending questions.
Today I focused on the questions I get asked the most. Up next: the questions I wished people asked me!