Below is an infographic showing you the ten most asked money questions that readers of Money Q&A have had over the past two years and their answers!
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Just a Few of the Top 10 Money Questions Asked on Money Q&A
1. Should I Pay Off My Highest Interest Debt Or Debt With The Smallest Balance First?
I can understand both feelings and arguments for each of these debt reduction tactics. I’m a huge fan of Dave Ramsey and The Total Money Makeover where he recommends paying off your debts using the debt snowball method eliminating your debts with the smallest balances first and then progressing to the ones with the largest balances. This gives you some psychological affirmation to continue with the hard task at hand.
2. Which Is Better Term Life Insurance Or Whole Life Insurance?
In almost every case, term life insurance is a better option for people than a whole life insurance policy or a cash value insurance policy that builds money in a cash account for the insured to use.
There are very few reasons that you would have a permanent need for insurance. Insurance is a protection against the sudden loss of a person’s income to protect those in the family who depend on that income.
After your children have graduated from college and left the house and after you have paid off your mortgage, there is very little need for life insurance. Term life insurance provides a very low-cost insurance policy for the specific amount of time that you need coverage.
3. Should I Pay Off All My Debts First Before I Start Investing?
This is one place where I diverge from Dave Ramsey’s teachings. I personally think that you should start investing in a Roth IRA as soon as you can regardless if you have debt or not. Waiting will only delay the power of compounding interest.
Paying off debt is very important and should be at the top of everyone’s personal finance to-do list, but I personally have a hard time stopping investing completely to throw all available income at debt reduction. I like to continue investing even if it is just a little bit while paying off debts.
Did I miss any money questions that you are just dying for me to answer? Is there a better one that you think should be in the top ten? Shoot me an email Hank [at] MoneyQandA.com. I’d love to hear from you.