Our Readers' Top 2020 Money Questions, Answered
See what our experts had to say about the recession, investing, ethical banking, and more.
2020 shook up our lives and our finances, causing people to ask new questions about themselves and their choices. Some of those questions brought them to The Ascent to learn how they could better manage their money and ride out this chaotic year.
Below, we'll look at our five most-searched questions from 2020 and show you where to find more information on each of them.
What is a recession?
The official definition of a recession is when the U.S. gross domestic product (GDP) -- the total value of goods and services in the country -- is in decline for six months or more. But most of us know a recession more by its effects than its formal definition. Recessions usually bring higher unemployment rates and drops in the stock market, which can leave many feeling financially insecure.
Several things can cause recessions, and their lengths and severity can vary. This makes them difficult to prepare for, but we must do the best we can to avoid derailing our long-term goals. To learn more about recessions and how to prepare for them, check out our article explaining what recessions are.
How do I buy stock?
You'll need a brokerage account to buy shares of a company's stock. A broker is a middleman that facilitates the buying and selling of stocks and other types of investments, like bonds, mutual funds, and exchange-traded funds (ETFs).
There are plenty of different brokers, each with their own resources, fees, and balance requirements, and just like there's no single stock that's right for every portfolio, there's no single broker that's best for everyone either. Take a look at our list of the best online stock brokers to figure out which one is the best choice for you.
Is now a good time to buy or refinance a home?
Now could be an affordable time to buy or refinance a home. The COVID-19 pandemic triggered the Federal Reserve to slash interest rates, which means mortgages today are a lot more affordable than they were at the start of 2020. That could make now a great time to borrow if you were already looking to buy a new home. It's also a great opportunity for those trying to lower their monthly expenses during these difficult times.
But every person's situation is unique and there are several factors you should weigh before making any major decisions about your home. Check out our expert advice to learn if now's a good time for you to buy a new home or refinance your existing mortgage.
How can I get an 800 credit score?
The keys to getting an 800 credit score are to always make your payments on time, to limit how much you charge and how often you apply for new credit, and to be patient. Longer credit histories provide lenders with more insight into how you handle borrowed money, so sometimes all you need to improve your credit is time.
It isn't possible to raise your credit score significantly overnight because these scores are designed to provide a long-term view of your credit management. You must adopt good habits and stick with them if you want to see any real change. Here's a comprehensive guide to raising your credit score if you'd like to learn more.
Where can I find ethical banks?
The best way to find ethical banks is to look for those that are members of certain organizations, like the Global Alliance for Banking on Values, or those that have made the Ethisphere Institute's World's Most Ethical Companies Honorees List. You can also look for B Corporations. These are for-profit businesses that are routinely reviewed and certified to ensure they meet a range of ethical criteria.
If you're interested in learning more about how to choose an ethical bank and why it matters, read our article on ethical banking.
Of course, these aren't the only money topics we addressed in 2020. Check out all of our expert articles to find answers to your questions about credit cards, banking, mortgages, investing, personal loans, and more.
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