You are probably trying to start learning about some aspect of personal finance, whether it is personal finance itself, retirement, banking, or budgeting. I created a list of some of the most Googled financial questions in 2020 to help you learn all about your money!
Personal Finance Questions
1st financial questions: What is personal finance?
Personal finance is a term that is used to describe any aspect of managing your money. Some of the biggest parts include creating financial goals, budgeting, banking, investing, and retirement.
This is certainly not a complete list of things that the term personal finance covers, but these are the main aspects.
In personal finance, what is considered a need?
So many people ask me what the difference between a need and a want is. To be straight-forward, a need is anything that you cannot live without, while wants are things that just make you happy.
So now you are probably asking for some examples of what a need is. Needs include your mortgage/rent payment, basic food, basic clothing, transportation, insurance, and utilities.
Why is personal finance important?
Personal finance is super important to understand but for some reason many schools in America don’t teach it. Understanding personal finance is important because it will help you to become successful with money.
You don’t want to become a slave to your money. Getting out of debt, investing, and retiring early are made possible when you understand personal finance. But if they don’t teach us how to do it in school, how do you learn personal finance?
According to Credit Ninja, people under 35 years old have an average debt of $67,400. This is crazy because it alters these people’s future dramatically!
How to learn personal finance?
If you are looking for a way to learn personal finance, then you came to the right place. Searching for personal finance blogs on the internet is one of the best ways to get started. Money Tree Network is here to help beginners learn how to manage their money.
The next big step would be to start listening to some personal finance podcasts like Dave Ramsey, Clark Howard, and Living Fi. These 3 podcasts will give you different perspectives on the same topic. They all have different strategies, but their goal is help you learn about your personal finances.
What are the best personal finance apps?
Personal finance apps can help you save so much money! There are apps for creating a budget, apps for helping you learn about personal finance, and apps for helping you project your retirement.
Some of my favorite apps for creating a budget include YNAB, EveryDollar, Mint, Personal Capital, and HoneyMoney. Not all of these apps are free but they are all worth downloading and giving a shot. I suggest starting with Every Dollar as it is the simplest to learn.
Mint, Personal Capital, and YNAB are all very similar in that they will help you learn about personal finance and project your retirement age based on your goals.
How to save for a house?
If you are looking to start saving for a house, you came to the right place. First, you want to consider your net monthly income. When you figure out how much you bring in every month, you should figure out what 25% of that is. That number is how much of a mortgage payment you can afford.
Since I am a Dave Ramsey fanatic, I believe that you should get a 15 year fixed rate mortgage and base your 25% on that.
This will stop you from becoming house poor. You should also put at least 20% down on your house to help you avoid PMI or private mortgage insurance. PMI is an amount of money that the bank will charge you in addition to your mortgage payment. It ensures that the bank gets their money if you default.
How to save for a car?
A car is the 2nd biggest expense that you will ever buy. It is the largest expense that goes down in value every year. This is why I believe you should pay for your car with cash. I know, this can be difficult, but it will be worth it when you save $300+ every month.
To save for a car, consider that all of your car’s combined value should not be more than 50% of your net income. This means that if you have 2 cars worth a total of $30,000, your income should be at least $60,000.
If this means that you need to get a 2nd job to help save some money it will be worth it! I have leased cars in the past and it truly is the most expensive way to have a car. You are basically renting a car for 3 years.
How to save for retirement?
Retirement may seem like a goal that is so far off that you do not need to worry about it quite yet but that is not the case. As soon as you become debt-free, you should start saving for retirement. Many workplaces offer a 401K or a Roth 401K. Many even match your contribution.
A 401k is a group of mutual funds that you can put money into through your workplace. They typically grow at a rate of 8 – 10% every year. Imagine what a $5,000 contribution would be in 40 years.
RocketHQ goes into way more detail about how to save for retirement.
How do I retire early?
If you have been following the FIRE community, you are probably asking how you can become financially independent and retire early. I am here to answer that! The difference between Money Tree Network and FIRE is that I don’t believe in relying on credit card points to help me retire early. I believe hard work is the key.
If you are willing to work your butt off for a while, you WILL be able to retire early. The more you earn now, the earlier you will be able to retire.
I don’t think I will personally, ever be able to completely retire because I would get bored so quickly. I want to work a part-time job when I can afford to, and just travel as much as possible.
How much do I need to retire?
I love the way that RocketHQ talks about how much you need in order to retire early. They say that you should have at least 15% of your gross salary by the time you turn 25 and 50% by 30. This will put you on track to start retirement right at 65. Anything over these amounts will help you to retire early!
What is the retirement age?
As of 2020, the retirement age in the United States is 65. Statistics say that only 58% of Americans are currently saving for retirement. You are probably not one of them since you are Googling things like, “What is the retirement age?” or “How much do I need to retire?”.
How do I open a bank account?
To make it simple here are the steps to opening a bank account:
- Find a bank or credit union that has the features that you want
- Visit the branch or website of the bank or credit union that you want to open an account with
- Have your driver’s license and social security number ready and available
- Decide if you want a savings or checking account or both
- Follow the prompts on the screen or paper – provide your information
- Consent to the final terms
- Wait for your debit card and checks to come
- Start funding your account
These are the 8 steps to opening a bank account. Below, I talk about the different parts of a bank account.
What is a high-yield savings account?
A high-yield savings account is a savings account that gives you greater than normal returns on your money. The average savings rate in America is about .02%. That means that if you put $1,000 into your savings account, you would earn 20 cents.
A high-yield savings account offers greater returns on your money. While they do vary greatly, a really good savings account will offer you 2% on your savings. During economic downturns, these rates will decrease.
Ally, CapitalOne360, SOFI, and Citi are some of the best high-yield savings account I have seen, but websites such as Bankrate will help you see the best options for your needs.
Why do I need a checking and savings account?
If you are asking for the difference between a check and savings account then you came to the right place. To make it simple, a checking account is the account that you take money out of, while a savings account is where you leave money to earn small amounts of interest.
Almost every person should have both a checking and savings account because they will allow you to better manage your money. I suggest moving any money that you do not think you will spend, over to your savings. This will force you to take one extra step before you can spend it.
Be careful, some banks limit the number of times you can transfer money between your checking and savings.
What is online banking?
Online banking is when somebody is able to manage their money on the internet. Most banks in the world offer an online banking option where you can open and close accounts, transfer money, and even check their FICO score.
What is mobile banking?
Mobile banking is very similar to online banking, but it is when there is an app in addition to the website. Most banks offer a mobile app that allows their users to manage their money.
What is a budget?
A budget is something that people use to help them manage their money. They list out their monthly income at the top of the sheet and then list ALL of their expenses, any amount of money they have left over goes to savings.
There are a few different budget categories such as entertainment, home and transportation. These are just a few of the many budget categories. Check out this post where I talk more about how to create a budget.
Who should budget?
The simple answer to the question of who should budget is EVERYBODY. Whether you are a thousandaire or a billionaire, you should use a budget.
A budget is simply a way to manage your money. If you are a billionaire, you might have more budget lines because you can spread your money out, but it is important no matter what.
How do I start budgeting?
If you want to start budgeting you have to be dedicated to it for the first few months. It will be hard at first, but it will become second nature by month 4 or 5.
The reason it is hard at first is because you don’t know how much you are spending on things, so you may underbudget or overbudget for certain things like food or entertainment.
Why is budgeting important?
A budget is important because it is the only way to be successful with money. By understanding where your money is going, you will be able to better manage it. If you realize you are spending too much on entertainment, maybe you will find a way to cut down on it.
A budget does not need to be restrictive. It is really just freeing because it allows you to understand your money.
How do I save money?
Saving money is easy when you have a budget in place. You simply check to see where your money is going and then figure out where you can cut down on your expenses. Let’s say you are budgeting $50 for entertainment each month but then you really spend $75, try to cut that extra $25 down.
If you are looking to save for a car, house, or retirement, just try to work it into your budget.
Which payment type is best if you are trying to stick to a budget?
The best payment type if you are trying to stick to a budget is a debit card. The reason the debit card is best is because it takes the money right out of your bank account and is usable almost everywhere.
Credit cards are really bad if you are trying to stick to a budget because the money doesn’t come right out of your account. Cash is difficult to use on larger expenses such as mortgage payments or rent. It is also not as secure as a debit card.
What are the 4 types of budgets?
The 4 types of budgets include the envelope system, 50/30/20 budget, pay yourself first, and the zero-based budget. All 4 of these budgeting methods ultimately just help you manage your money.
I go into detail about each of these budgeting methods right here. Check out my ultimate guide to budgeting.
To sum it up…
If you are looking for some of the most Googled financial questions, then you came to the right place. We review some of the biggest personal finance questions, retirement questions, banking questions, and of course budgeting questions. Money Tree Network is here to help!