10 Answers To The Most Embarrassing Money Questions

It’s rare that someone is born financially savvy, which is why it’s important to ask a lot of questions when learning how to properly manage your money. However, discussing financial issues is often considered taboo, making people feel embarrassed to inquire about important topics that need to be addressed.

Many people are eager to find the answers to the ten money questions below, but feel uncomfortable asking them. While hesitance is understandable, you should never feel embarrassed to ask questions that impact your financial health. Review the following responses and read on about these subjects if you need further clarification.

1. Why was my debit card declined?
It’s beyond embarrassing to know there’s money in your account but for one reason or another your bank has blocked access to it. Large purchases and those made far from your home are sometimes seen as red flags and declined as a security measure. Some banks also place a daily spending limits on customer accounts to decrease the damage done if debit cards are stolen. If this happens to you, simply call your bank and authorize the transaction and you should be back in business.

2. As a stay-at-home parent, am I eligible for Social Security benefits?
If you worked for at least 10 years and earned a minimum of 40 work credits, you’re eligible to receive your own Social Security benefits at age 62, according to SocialSecurity.gov. If not and you’re married, you might be eligible to receive Social Security benefits from your spouse’s work. When your spouse retires, or if he becomes disabled, you might be able to receive benefits beginning at age 62.

3. Will I be responsible for paying off my parents’ debt when they die?
In most cases, no. All unpaid debts will come out of your parents’ estate, according to the Federal Trade Commission. If there isn’t enough money to settle the debts, they will go unpaid unless you co-signed a loan, live in a community property state or were the executor of the estate and failed to comply with state probate laws. In some states, widows are obligated to front specific debts, like some health care expenses.

4. What is a charge-off?
A charge-off is placed on a credit report when a creditor has given up on receiving payment according to the original terms of the loan, explains Experian. This can have a negative impact on your credit score and will stay on your credit report for seven years. If you see this on your credit report, expect to be hearing from a collection agency to repay this debt.

5. Is it a good idea to borrow from my 401(k)?
No. Generally, you’re allowed to borrow up to 50 percent of your vested account balance, up to a maximum of $50,000, according to the IRS. You have to repay the loan within five years unless the money is used to purchase your primary residence. If you don’t follow the repayment schedule, the loan might be deemed a distribution, causing you to have to pay income tax on the loan and a 10 percent early withdrawal penalty.

Additionally, if you lose your job, you’re often required to pay the loan back immediately or within 60 days, which can be a challenge when money becomes tight.

6. How do I pay off my credit card debt?
When you’re faced with a mountain of credit card debt, paying off the balance can seem impossible. However, you can tackle your debt by creating a budget and cutting out unnecessary expenses. Consider ceasing your use of credit cards altogether, as new purchases only get you deeper into debt.

Put as much extra money as you can toward your balance each month and enjoy the satisfaction of watching your debt steadily decrease.

7. What is an emergency fund?
An emergency fund is a cash reserve you can rely on if you lose your job or are faced with a major unexpected expense, such as needing to purchase a new hot water heater for your home. Rather than go into debt, you can turn to your emergency fund for the money you need. Experts recommend having approximately three to six months of post-tax income in your emergency fund.

8. Should I pay off debt or save for retirement?
It depends on your age and your financial goals. If you’re nearing retirement or your employer has a 401(k) match program, it might make more sense to focus on retirement. Conversely, if you’re a long way from retirement and trying to boost your credit score, it might be a good idea to focus your efforts on paying down debt now and worrying about saving for retirement when you’re debt free.

It is important to note, however, that the sooner you begin saving for retirement the easier it is to grow your funds over the course of your working years.

9. How do I tell my fiancé about my debt?
It can be very nerve-wracking to tell your fiancé about your debt, but you simply must. Schedule a time to sit down with your beloved to discuss the situation. Explain what caused you to get in over your head and what you’ve learned from your mistakes. Create a plan to tackle your debt and review it with your fiancé to show that you’re serious about paying it off and making it a thing of the past.

10. If I can’t afford to pay all my bills, what should I pay first?
It’s important to pay all your bills, but late payments on some have more severe consequences than others. Focus on basic needs like food, shelter and transportation first. Contact creditors to explain your situation and try to work out an adjusted payment plan. Remember, always pay secured debts first, as you don’t want to lose the collateral used to guarantee the debt.

Photo credit: Matt Armstrong

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