GMR 146: Answers to Common Money Questions
Financial education and inspiring you toward financial freedom is a big part of why Getting Money Right exists. In this episode, we’re answering your most common money questions to help you make better decisions, and reach your money goals.
Show Notes
Common Money Questions
How much do I need in an emergency fund?
3 to 6 months of a bare-bones budget.
The purpose of the emergency fund is to support your normal budget.
For self-employed and commission type incomes, have a minimum of 6 months of a bare-bones budget, but 12 months is better.
In addition to the emergency fund, save for anything that is coming up in the next 2-5 years that you will need to replace. This will prevent you from draining your emergency fund.
How many credit cards should I have?
There’s not a one size fits all option
You must be in control and not take on more than you can safely and easily manage.
Things to consider:
Multiple credit cards may cause you to overspend if you don’t have the discipline to only use them for budgeted items.
Having multiple cards will take a long time to manage and can become overwhelming, causing you to miss a payment or get into trouble.
You’ll spend less if you use cash and you’re using a budget to make spending decisions.
How can I build credit fast?
There is no fast way to building your credit.
The process of building credit will take time and that’s a good thing.
The best way to build your credit and have a good credit score is to:
Pay all payments on time and more than the minimum payments.
Keep borrowing to less than 30% or your available credit.
If you’re just starting out and you’re young, start with a secured credit card that allows a smaller borrowing limit. This will help you develop discipline and keep you from getting into trouble.