When it comes to money, parents usually have somewhat vague advice for their children. This “wisdom” may be all your child needs, however, to learn good financial habits.

Getting Started

The first part of teaching your child good habits is to engage their interests. One good way to do this is to start giving your child an allowance; they should put part of it toward spending and part toward savings. Let your child use their own judgment on where he or she wants to spend the money. By doing this, you will give your child a sense of responsibility toward the allowance.

Lesson No. 1: Saving

The part of your child’s allowance that he or she needs to save should go into a savings account that earns interest. Take your child to the bank to open the account and involve your child in the process. Make sure your child understands why the account is there, and understands what interest means.

Your child’s involvement shouldn’t stop when that first visit to the bank is over. You should set up the bank account so the statements and the account are in your child’s name. Let your child open the envelop when the statement arrives in the mail. Go over the account balance with your child, and help him or her understand why the balance is growing. Have your child put the monthly statements in a binder; this will teach your child to be organized.

Take your child to the bank when you give him or her the allowance. Have your child deposit the money. The point of this lesson is to teach your child about saving, rather than spending, money. This will lay the basis for a lifetime habit.

Lesson No. 2: Investing

Start talking about how to make money grow faster when your child becomes older. Many teenagers are able to understand the basics of how stocks work. You should spend some time explaining to them about risk, and talking about the potential risks and rewards of investing in the stock market. If it is feasible for your family, give your child a few hundred dollars and let them invest in the stock market. Help your child research companies that are interesting to him or her, and take our child through the process of conducting research about those companies.

Help your child buy shares in the stocks they would like after completing the research. Remember: The purpose of this is not to create a stock portfolio that will fund your child for life. The purpose is to allow your child to learn about money, risk, and reward by making his or her own choices. If you truly are concerned about your child’s choices, limit investments to one or two companies for $100 each.

Don’t forget that losing money is part of the process of learning about stocks. This is a learning experience. You are not giving your 13-year-old child all of his or her savings and letting them invest in the market. You are teaching your child about the investing and the consequences of investment decisions.

Statements for the brokerage account should go to the child. Your child should put these statements in the same binder or folder he or she is using for the savings accounts. You and your child can use these statements to compare the fluctuations in each account, and talk about the differences between brokerage accounts and savings accounts.

Looking toward the Future

As your child gets older, you will be able to talk about more complex investing ideas, like diversification and different methods for savings. You may want to explain that as people accumulate money, certain types of fixed-income investments may be an appropriate item to put in a portfolio. If possible, you can use your portfolio to show your child how the portfolio changes over time based on personal needs and desires.

Things to Remember

Remember that knowledge is power. It’s important to remember that your child needs to learn about money, and that you can give them this gift and this power. You will teach your child how to become a self-sufficient adult who has confident in the ever changing financial marketplace.

Teaching your child about how to saving and handle his or her own financial situations is just as important as your saving money for your child’s college education and other activities. Teaching your children about how to handle money may in fact be even more valuable than just giving them cash or a fixed rate credit card and letting them go free. You should start early and give them these tools to last them a lifetime.

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Credit card debt is something that most all people have. Very few people in the nation have no credit cards, and even fewer pay off their credit cards every month. Credit cards are becoming a method of getting through another day when there is no money to get gas, groceries and other staples of life. What is happening is that credit card debt is mounting fast, and no one can keep up with the payments.

The interest rates on the credit cards will vary from holder to holder, and it is important that you are aware of how much interest you are being charged every month on that credit card debt.

Credit card debt consolidation is something that is not new in the world, but that many people are fast learning about because the situations with credit cards and interest rates are fast getting out of control.

How did the money that you owe on that credit card get to be so high? Often times it is because of making purchases for items that you used to or should have paid for with cash. Credit cards are meant to be paid off every month or you are going to pay the credit card companies interest on those purchases you made.

People across the US have a problem with credit cards, or at least most people do. The average household has at least five credit cards, and is carrying at least $10.000 in debt on those credit cards. So if you are paying interest and all of your neighbors are paying interest, who is making all the money? The credit card companies are making money every day off people just like you and I who are using our credit cards for purchasing food, gas and so much more.

In order to get a head of all the credit card debt and the interest payments there are a few things that you need to make a habit in your everyday life. If you can eat it, drink it, or if you are using your credit card for the staples of life you should be paying cash instead. When you are eating out, try using cash. If you are at the grocery store, use cash. If you are getting gas, use cash. Credit card debt adds up fast even if you have a low apr credit card. If you were to pay $100 for groceries and you didn’t pay off those groceries for three months, you could have paid an extra $50 or more on those same groceries depending on your interest rate, and if you had any late payments on your credit card. Try doing credit card debt consolidation procedures or balance transfer options, as well.

Financial problems are everywhere. No one is going to be able to help you make the decisions for a healthier financial future but you and your family. In order to get out of debt and put debt problems behind you, you first are going to need to cut the credit card debt, lower those balances, transfer and pay off balances, and search for lower interest rates where ever possible.

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Many people don’t have the basics of financial education. The average school student usually doesn’t learn much beyond basic accounting and how to write a check. You can’t assume that basic math will be enough to prepare a person for “real world” personal finance and investing. If schools don’t provide this financial education, who will?

How about Indiana Jones?

Look Out for You

Whether Indiana Jones is negotiating buyers’ fees or trying to get off of a conveyor belt going to a rock crusher, Indiana Jones is a guy who knows how to take care of himself. You’ll have to learn to do the same thing if you want to take control of your finances.

The first step toward having a comfortable retirement is to put the 10 percent rule into place. This is one of the oldest and most efficient ways to figure out your finances. You should pay yourself 10 percent of your paycheck before doing anything else. This is the money you will use for investments.

This rule is popular for several reasons. First of all, taking 10 percent from your monthly income won’t have a major effect on your lifestyle. This is a goal that everyone can accomplish. Secondly, this is a percentage so it can adjust to any change in income that you might have. This eliminates the popular excuse of putting the money away when you have it. This also is a step that you can do immediately.

Take on the Biggest Enemy First

Indiana Jones always follows the rules of any bar brawl: He takes out the biggest guy first and works his way down from there. The general idea is to take on the most dangerous person when you still have the energy to take him down.

You should have the same approach for your debts: Prioritize them and eliminate them one by one. Here are the steps to decide which debt should go first.

1. Take on the highest interest debt first. This could include your credit card debt or any other high-interest loans.

2. Pay off your debts that don’t give you a tax deduction. These debts include lines of credit, bank loans, and car loans. They are any debt where you can’t write off the interest on your tax returns.

3. Tackle the debts that have tax write offs. Student loans would be an example of this type of debt.

4. Get rid of your mortgage. A paid-off house has more advantages than a mortgage.

You should not invest before you have gotten rid of your high-interest debt. Let’s look at this basic example.

When you pay yourself 10 percent of your monthly income, you have $200. You owe $400 on your credit card. What should you do with this money?

You can either invest it in an index fund or in a bond and receive between 6 and 12 percent interest by the end of the year. Your credit card debt, however, has a 13-percent interest rate. That interest costs you $52 a month. You will not make more in your investment that you are losing in your credit card interest.

Debt also puts pressure on your investments. If your debt is at 8 percent, you will need to have an investment that brings more than 8 percent. It can be difficult to find an investment that pays that much. Therefore, your first and second priority debts can be a major challenge when you are investing. Tax-deductible debts and mortgages should not stand in your way to investing.

Dodging Boulders and Ducking Arrows

You could wonder why Indiana Jones is as nervous facing an arrow as he is facing a gun or a boulder. After all, you probably could handle a few arrows without getting killed. You can’t say the same for getting shot or being crushed by a rock.

When you have more arrows sticking in you, however, you’ll get slower and your enemies can catch up to you. That makes it logical to fear all of these dangers. Why do people ignore this logic when thinking about saving money?

People often make two major finance mistakes. Buying debt is the first mistake. People buy things that will cost them dear, and continue to prove expensive for years. Unfortunately, people are not as skilled at getting assets as they are at getting debts. Cars are a primary example of this. Not only do cars depreciate in value, but the cost of the car directly influences your monthly insurance premiums.

It isn’t just the big expenses that can bring people down. The second biggest mistake that people make is that they don’t control their finances. The small expenses add up evn on 0% balance transfer cards: People buy lunch instead of pack one, go to the latest movies, drink fancy coffees, and rack up other expenses. People who receive bonuses don’t always invest, or do balance transfer on their credit cards, or save more than they did before they had the added income. Small expenses can be like Indiana Jones’ arrows that try to bring him down.

These two mistakes can be a fatal combination. The rolling boulder is the more expensive lifestyle and the debts that you buy. How much you make doesn’t matter if you don’t save any money. You need to get out of the boulder’s way and start minimizing your expenses.

Walk Off like Indy

If you’ve talked your debt, started minimizing your expenses, and been paying yourself every month, you may believe you’ve earned the right to walk away. Life isn’t like the movies, though, and you can’t just end your journey at this moment. You’re just at the beginning of your great adventure of saving and investing. The challenges don’t go away as your journey goes on - it just becomes easier to find the challenges.

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Carders are a group of criminals who buy and sell credit card information on forums. You can google “carders forum” to see what I mean. you will see that thousands of cards are bought and sold every day.

The fraudsters use these cards to buy goods and services from online merchants because it’s very easy and they never get caught. In 2007 they ripped merchants off for $3.6 Billion. Jusat how much of that was yours?

Most people do not realise the following, but it’s dead set true. In a online credit card transaction there are 4 parties. There are the banks, the card company, the card holder and the merchant. The merchant is the ONLY one out of those parties that has any risk in a fraudulent transaction. Not only will the merchant lose the profit and costs for the sale, the card company will also fine the merchant $20. That just adds insult to injury.

One big problem online merchants have is they cannot get the cardholders signature on the order. Without a signature by the cardholder, the merchant is the only party at risk. This is because there is no proof the cardholder authorized the transaction.

One other problem for online merchants is real cardholders who buy goods and services and then later claim they never authorized the transaction. This is a rapidly increasing problem and one I have found some solutions which merchants can use.

Merchants can fight back and prevent fraud if they know what to look for. Most don’t and no one tells them what to look for..that is until now. In my brand new book called “Merchants Beware” I reveal the telltale signs of a fraudster at work. I give merchants an easy step by step approach to detecting fraudsters and stopping them BEFORE they become a problem

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