WEALTH on WIRE

While credit cards and debit cards may look almost identical, not all plastic is the same. Debit cards have different protections and uses.

It’s important to understand the difference between a debit card and a credit card. There’s a difference in how the transactions are processed and the protections offered to consumers when they use them.

While debit cards and credit cards each have advantages, each is also better suited to certain situations. And since a debit card is a direct line to your bank account, there are places where it can be wise to avoid handing it over — if for no other reason than complete peace of mind. 

Credit card offers better dispute rights, buyers protection, renters insurance etc..  So it sounds good to use credit card for large purchase of electronics goods and renting a car.

Criminals are getting better with skimmers and planting them in places you’d never suspect — like ATM machines on bank property. So take a good look at the machine or card reader the next time you use an ATM or self-check lane. Does the machine fit together well or does something look off, different or like it doesn’t quite belong?  “Make sure it doesn’t look like it’s been tampered with.”

How, and when to communicate money values to children is, however, one of the toughest challenges that parents face.

Educating, motivating, and empowering children to become regular savers and investors will enable them to keep more of the money they earn and do more with the money they spend.

So many parents do not discuss finances within the family either because it’s considered inappropriate, or personal. Consider this: if you don’t actively provide the correct information to your child, how is he/ she to know, understand and inculcate your values?

Therefore, as soon as your child can count, introduce him/ her to money. Observation and repetition are two important ways in which children learn.
As they grow older, have frank discussions about how to save it, how to make it grow, and how to spend it wisely.

If they can differentiate between need-to-have and nice-to-have, then they’re halfway to a solid and secure future.

Better still, help your child set his/ her own goals. If it’s a toy that they must have, then regard this as a good opportunity to teach your child how to be responsible with money, and prioritize between what they want, and mindless spending.

Allow your child to make spending decisions, which means that they will learn from the choices they make.

And learn that it’s to their advantage to do a little homework before buying, waiting for the right time to buy, and actually deciding if the product selected is what they really want.

Begin simply, as your parents might have done, with a piggy bank. If you do give your child an allowance, get them to set aside a small portion of it every time.

Explain and demonstrate the concept of earning interest income on savings. Incentives it; offer to match what your child saves on his/ her own.

To make it easy, use 12 envelopes, 1 for each month, with a larger envelope to hold all the envelopes for the year.

Encourage your child to save receipts from all purchases in the envelopes and keep notes on what he/ she does with his/ her money.

Learning by observing and doing is the most powerful tool. Such as when you go grocery shopping, and can use the opportunity to showcase planned spending, or how to recognize value for money.

Or if you decide to use a credit card at a restaurant, you could show your child how a credit card works, when it can be used, and how to calculate a tip!

Finally, your child needs to understand that spending money can be fun and very productive when spending is well-planned, and that a penny saved is, indeed, a penny earned!