Financial concepts usually aren't as complicated as you might think, but a lot of us just pretend to understand them because we think we should. As personal finance expert Carl Richards says, "when it comes to our money, there are no dumb questions." Photo by Sutha Kamal.
This is especially true when it comes to applying for a mortgage, car loan or any other type of financial product, really. The dealer or lender will often throw a bunch of jargon at you, assuming you either know what they're talking about or you're too embarrassed to ask. When you don't ask, though, you could agree to something that puts your finances at risk. Recalling his own experience, Richards writes:
Not long ago, my wife and I met with a lawyer to get some basic estate planning done. As he rolled through the plan, we just sat there nodding along, pretending that we understood everything he said. We signed a few papers, shook hands and walked out of the building.
When we got back to the car, we turned to each other and said in unison, "Did you understand that?" Neither of us had a clue what we had just done. The mistake of failing to admit we didn't understand cost us valuable time in circling back and asking the obvious questions we should have asked in the first place.
The bottom line is, don't be afraid to ask the other person to explain things — asking questions is one of the best things you can do for your finances. For more detail, head to Richards' full post at the link below.
One of the Smartest Money Strategies Is Asking When You Don't Know [The New York Times]