10 Everyday Money Questions and Answers

What questions do you have about money? I've had my share through the years—like the time I bought a sports car on impulse that turned out to be a money pit, and I had to figure out what to do with it. Or at the start of my career, when I wondered if I could afford to put 10% of my annual salary into my employer's 401(k) plan. (Now I'm thanking myself.)

Today's financial choices can make things seem even more complicated. And while you may think you're the only one dealing with specific money concerns, I've found throughout my career that there are a lot of money questions that many people face. So today, I want to talk about some common money questions and ideas to help answer them.

It's hard to think about retirement when you're just starting out, so consider this. Don't look at a 401(k) as a retirement plan, but rather as an employer savings plan that makes it easy and automatic to save more now. All you have to do is enroll in the plan and decide how much of your salary you want to contribute each year. Let's say you make $40,000 and contribute 10%. That's $4,000 a year you've saved automatically. Plus, your employer may offer a company match, Uncle Sam gives you a tax break, and you can invest the money to keep it growing. The earlier you start, the longer you have to grow your savings—giving you potentially more flexibility and discretionary funds later on. There's a lot to like here.

Read more: Making the Most of Your 401(k) in Your 20s.

Buy Now Pay Later, commonly known as BNPL, is quick, easy, and growing in popularity. Generally, you put 25% down, then pay off your purchase in three future payments with no interest or fees. But it does raise a red flag because the easier it is to put off paying for things, the easier it could be to end up in debt. While BNPL could be helpful in the right circumstances, be careful how you use these products and understand the terms of what you're agreeing to.

Read more: 5 Risks of Buy Now, Pay Later.

I like cars. What I don't like is the process of buying a car. There are a lot of car buying mistakes you can make. Buying on emotion is just one of them. You also have to be careful not to send your budget into a tailspin or lose sight of your other goals. Plus, you have to think about financing, monthly payments, maintenance, and more.

Read more: 7 Car Buying Mistakes That Could Cost You and How Much Car Can I Afford? Five Things to Consider.

Credit is convenient and almost a necessity these days, but credit card debt can grow faster than we realize. To help reverse the situation, consider this strategy. First, calculate what you owe. A spreadsheet or simple list can help you tally up balances, interest rates, minimum payments, and annual fees—all important parts of the equation. Then, develop a payoff plan. You've got a couple of choices to consider, including the "avalanche" approach, which focuses on paying high-interest-rate balances first or the "snowball" approach which focuses on paying off lowest balances first. Once you pay off your debt, focus on how to stay debt-free.

Read more: How to Create a Credit Card Debt Exit Plan.

For most people, deciding to buy a house is a huge decision. And when home prices and mortgage rates are high, it can be daunting. It's not only about how much house you can afford, but also about saving for a down payment, how good your credit is, and what type of mortgage could be best for you. Owning a home is both a financial and emotional responsibility. There's a lot to consider before you go to that first open house.

Read more: Should You Buy a Home? 5 Things to Do First.

To maximize credit card rewards, be strategic and start with a plan. Consider your spending patterns—what do you spend most on each month (groceries, gas etc.)—and the type of rewards you want, such as miles for travel or cash back. Be honest about your budget, know what you can spend, and what you can pay off each month. And stay on top of your debt. You could come out on top with credit card rewards, but you need to pay close attention to the credit card rewards rules.

Read more: Playing the Points Game: 5 Credit Card Mistakes.

Money conversations with parents could feel uncomfortable, but once you have them, both you and your parents will likely feel relieved. If you can get your parents to open up and share their financial picture with you, it could help you determine whether they are in good shape or if you're going to need to help.

One way to start the conversation is to share information and offer to partner on a strategy they want to take. You might suggest these documents to them: revocable living trust, financial and medical powers of attorney, advance directive, and HIPAA authorization. These documents can clarify your parents' wishes ahead of time and allow you to manage their affairs if that becomes necessary. Check to see if you have pre-paid family legal services through your employee benefits. Meeting with an attorney can make a tough conversation easier. But there's more to discuss with them, from potential scams to long-term care, so once you start talking, keep the conversation going.

Read more: Aging Parents? Five Money Topics to Discuss.

The internet can be a great resource. Having ready access to financial information can help give you more confidence in your money decisions. But when it comes to social media you have to be cautious. Don't take anything at face value. Check people's credentials. Consider that financial decisions should be based on your goals and not a hot tip from an uncredentialed finfluencer. Dig deeper and evaluate financial information on social media before making any money moves. Think for yourself, verify what you see and hear, and consider what's right for you.

Read more: Social Media and Your Money: Follow with Caution.

When you receive an inheritance, it's easy to think of all the fun things you could do with the money. But it's important to create a thoughtful plan. Hit the pause button before you start spending and prioritize your goals. If you have a partner, have a conversation with them to align on your financial priorities. Do you want to pay off debt? Add to your emergency fund? Save for a down payment on a home or a child's education?  You could hold the inheritance in a high-yield savings account as you take some time to develop a plan of action. Consider consulting with a professional.

Read more: Dos and Don'ts When You Get an Inheritance.

What would you like your life to look like in the future? How will the financial decisions you make now impact that vision? To get the answers, it's best to zoom out and look at the big picture. To do that, you need a financial plan. If you're just starting out, having a plan will help give you a sense of direction, similar to a roadmap. When you're confronted with fork-in-the road decisions like a job change or what to do with a 401(k), you'll have more context to help you decide. A financial plan doesn't have to cost a lot. Depending on your situation, you could even create one on your own.

Read more: 9 Steps to a DIY Financial Plan.

These are my top 10 ten money questions and answers. For more ideas to help you make the most of your money, subscribe to the Money Talk newsletter on LinkedIn.