Money Questions and Answers

The Importance of Talking About Money (Even When It’s Hard)

The following is a guest post by Rachel Cruze, who you may know also as Dave Ramsey’s daughter. An incredible speaker and author in her own right, Rachel has a new book coming out in October, “Love Your Life, Not Theirs“. If you’d like to submit a guest post on Money Q&A, please check out the site’s guest posting guidelines.

Some of the most difficult conversations you’ll ever have will probably involve money. For example, consider these statements:

“How much did you spend on that dress? You didn’t even tell me about it!”

“Retirement is only five years away, Dad. Do you think you’ll be ready?”

“Josh, I can’t keep loaning you money if you aren’t going to pay me back. Sorry, I know you’re my brother, but I can’t do it again.”

Ouch. Those are probably going to be difficult discussions, right? But even though they’re difficult, those money conversations are absolutely necessary.

The Importance of Talking About Money

In my upcoming book, “Love Your Life, Not Theirs“, I discuss the seven money habits you need to live the life you want. One of them is simply this: Talk about money, even when it’s hard.

What should you do when . . .

Your husband won’t stick to the budget? Talk about it.

Your parents aren’t prepared to live a comfortable retirement? Talk about it.

Your brother won’t stop asking you for money? Talk about it.

Yes, it won’t be easy. You may even have “words” or shed a few tears. But, ultimately, it’s one of the habits you have to practice to have a healthy relationship with money.

4 Problems You Might Face as a First Time Renter (and How to Overcome Them)

by Hank Coleman

Moving out from the family home as a first time renter is an incredibly exciting, yet exhausting and stressful process for many people. Whether you’re a young college student or a professional who’s been living with their parents to save money, eventually leaving the nest and finding a place of your own is pretty much inevitable. However, taking out a mortgage right after leaving the parents’ home would be financially unfeasible for most people, which means your first independent living experience will probably be renting a room or apartment. Renting is becoming the “new normal” in America, according to a June 2015 story from The New York Times, and statistics compiled by the Joint Center for Housing Studies of Harvard University … Read more

Book Review – The Recovering Spender by Lauren Greutman

by Hank Coleman

Lauren Greutman is everywoman. And her tale of coming back from a life of debt is inspiring. In her new book, The Recovering Spender, Lauren Greutman lays out her mistakes (like many of us), how she overcame them, and then how you can too. The Recovering Spender by Lauren Greutman is half memoir and half “how to” book on taking back control over your finances and control over your spending. I’ve often been critical of my fellow personal finance bloggers. Most of them fall into two camps. They typically are: #1 – fall along as I chronicle my life getting out of the massive credit card and student loan debt that I’ve created. #2 – financial experts with the degrees … Read more

Why I’m Upgrading To an iPhone 7 and You Should Too

by Hank Coleman

Why I'm Using My Apple iPhone Upgrade Eligibility for the iPhone 7

I’m usually not an early adopter of new technology and gadgets. But this time is different. This time, I am trading in my old iPhone 5 and taking advantage of my Apple iPhone upgrade eligibility to purchase a new iPhone 7. Last week, after months of rumors, Apple finally unveiled the new iPhone 7 to the public and started taking preorders. So, I went to my local Verizon store and preordered one. There are many reasons why I took the plunge despite not being an early adopter type of person. See my rationale below. This week, customers can start receiving their pre-ordered phones. And you can also start purchasing new iPhone 7 smartphones this week if they are available. Lock … Read more

When To Start Investing In Dividends to Replace Income In Retirement

by Hank Coleman

Should You Use Dividends as Income Replacement In Retirement?

Here is the next installment in our Reader’s Questions Series, which highlight questions emailed to me by you, the readers of Money Q&A. This time we’re talking about income replacement with dividends when you retire.

Be sure to find out at the end of this article how you can receive a free copy of Dave Ramsey’s book, The Total Money Makeover. If you’re not familiar with Dave Ramsey’s book, you should run right out and get it. It is one of the best personal finance books that everyone should read. Now….on to our reader’s question. This week’s Reader Question is from Ralph who writes…

“I am 54 and planning on retiring in another 10 years. I recently read a book about income investing where you buy stocks that distribute income through dividends. And, you use that for any monthly shortfalls between what you receive in social security, 401k, etc. and what you need to live on. But, the book never said at what time to start doing this. Is it when you are retired, couple years before you retire?”

The short answer to Ralph’s question is that you should probably start investing in dividend paying stocks as early as you can in life. Like most investments, the best thing young investors have is time on their side.

I personally wouldn’t wait until you retire to start investing in dividend paying stocks, although you certainly can do that if you choose. It would take a lot of cash to buy enough shares of stock to generate the dividends needed for income replacement in one shot though. Buying a little along until retirement would be more feasible for most investors. Below are the details of what it would take.

Income Replacement with Dividend Stocks

For most people, it will take a lot of shares of stock to generate the replacement income needed in retirement from dividends. Assuming that most investors won’t have piles of cash available invest in a lot of stock when they hit retirement age, it’s best to start buying dividend paying stock as early as possible.

“Earlier is better than later to start moving money into dividend paying stocks,” says Blake, publisher and blogger at the popular personal finance site, The Dividend Pig. “Or, if you have a large amount of cash and want wait, you can purchase shares as you get closer to retirement age.”

In that case, Blake recommends at least starting to research which companies you’ll want to own, at what price per share, and exactly how much income you will need to replace with dividends.

Should You Buy Travel Insurance for Your Next Trip Abroad?

by Hank Coleman

International travel can be expensive, but the one cost many people forget about in the midst of scheduling flights and packing luggage is a travel insurance plan. Unless you have phenomenal health care coverage here in the U.S. that also guarantees a decent level of coverage while you’re overseas, you may be required to purchase a supplemental travel insurance plan to use during your next trip abroad. Search, Compare & Book a Flight today with Airfarewatchdog and Save Big! If you’re traveling with a tour company, then they can probably guide you through the ins and outs of travel insurance recommendations and requirements for your destination country. However, if you’re planning your own trip and debating whether to buy travel insurance, … Read more