Your children see you whip out your card, often emblazoned with a Visa or Mastercard logo and swipe it at the store. The items you had in your cart are now free and clear for you to take home without concern that someone will stop you at the door for not paying your bill. Your children also see you use the same card at an ATM and pull out actual cash money to give them their allowance or to purchase an item you were planning for. The only problem with this scenario is that we have a tendency to not to see for ourselves how these actions can be so very confusing to a younger person who does not clearly understand the difference between debit cards and credit cards, a difference that for some can mean a life spent in bondage to the Visa company if one is not careful.
Can Your Child Tell the Difference?
If you really stop to think about it, the two cards (debit and credit) are on the surface almost indistinguishable. They both carry the same logos, they both can be used at the same places, they both can pay for items, and offer you cash in hand. The difference, of course, is that one will charge you LOTS of interest for the convenience of its use, while the other requires diligent bookkeeping to be sure you don’t spend more than you have. Are you beginning to see how this can confuse young people? This is an area we have to be diligent in teaching so that, as they get older, our children have a solid understanding of the differences and pitfalls of each of these two cards.
How to Teach Financial Literacy
So, when do you teach this distinguishing difference? How old is too old and at what point is too young? Each family is different. However, it goes without saying that this is an area that needs to be taught when we are thinking about financial literacy and good choices. In fact, did you know that the Skill Trek program teaches a number of lessons on financial literacy? Everything from checkbook record keeping to budgeting, filing and so much more. The best part is that this program can help fill in the gaps that you may have not even thought of when it comes to teaching your children some very necessary life skills.