Here is a double edge sword. In this article, I am introducing a new idea of converting your credit card using habit as a very good money source of your kid to
save with her piggy bank as well as limit the use of the dangerous habit of credit card to help you to escape from huge debts that can trash your financial planning for life in a huge way. Practicing this method will give you multiple benefits. Firstly, you can build a money saving habit with your kid. Secondly, this will help you to build a hidden savings over long period of time. Finally, it will help you to reduce the habit of using credit cards all the time and escape from huge debts. Have a look and practice if you are a credit card animal with less self control to prevent using the same.
With a regular practice of starting such article with my own experience, I personally hate credit cards and don’t have a habit of using any kind of credit cards. I am not keeping or interested to keep one as my own. I don’t believe or never interested to keep a credit card for any ‘Emergency purpose’. As I wrote with my various articles earlier, if you have a stable, enough “emergency fund” or any parallel arrangements to meet all the critical money required situations that happening to you and dependents then, what is the importance of keeping a credit card as your ‘emergency purpose’ friend?
I hate using any credit cards because of various reasons. It is a plastic piece that can lead you to control less spending and transform to a victim of huge debt. As a person totally dedicated to create a well structured and foolproof financial planning for life and adviser of the same to my readers, I am totally against to this plastic piece. In my previous articles on financial planning, I have clearly mentioned the requirement of paying off the debts that largely coming from control less credit card usage and personal loans.
I have personal fear on any possible misuse of my lost credit cards, if such happens. Like any other facilities, credit cards are very open and anyone can use without producing any ownership proof or security pin. You have a facility to inform the same to the customer care to block, but a short time between losing your credit card and reporting it to block is enough to drag you to huge debt if it is reaching to a wrong place. Why should I take such risks? Better don’t own and be safe and relax.
We are coming back to our points. I am well aware the requirements of keeping a credit card instead of keeping bulk money in your pocket. Let me introduce you some well studied, practical methods to convert your credit card usage as a source of money for your kid to save with her piggy bank.
To practice this strategy, present a piggy bank to your kid and have proper mind-set yourself with promptness in action with punctuality.
• Whenever using a credit card to purchase, immediately calculate 5 percentage of the total purchase value and contribute an amount same to that value, to your kid’s piggy bank. OR• Whenever purchasing anything using credit card, give 5% of each 100 bucks that you are spending, to kid’s piggy bank.• If you are repaying credit card debt as EMI’s, calculate the interest you are paying with each EMI. Give an equal sum of such interest amount to your kid for piggy bank.• If you ever repay your credit debt late with interest, give an equal amount of such acquired interest to you kid.• Whenever you buy an item that is not for the common purpose of your home members, contribute 15% of the value of such item to your kid’s piggy bank.There are several methods available in such kind, if you put little thoughts. I am sure if you follow this method, it will automatically add control to your credit card using habits and any unnecessary spending occurred due to such habit. Also, this will give an opportunity to your kid to save money as well as getting a huge savings in the end of each year to use for good purposes like investing for your kids or buying things like gold, that have growing resale value. Think practically.Hope you have liked the article and I wish to hear from you frequently. Any comments on any missing points or additions to this article highly appreciated.