The New Financial Management Teaching System

Teaching Financial Management to young people seems a formidable task, but better start young than later.  The book, "Rich Dad, Poor Dad" indicates the need to inculcate learning about financial management among young people the earliest opportunity possible.  It always pays off.

There's a new concept on financial management services for students. Parents are loving it, and so are students. It's helping families teach their children  to become financially literate. Not an easy task, but something that can be done.

This new development is a pre-paid card that is much like a debit card. It's PIN-based, and when endorsed by and bearing the logo of a major credit card carrier, such as MasterCard or VISA, it can be accepted by  myriad businesses, restaurants and shops around the globe that accept those cards.

Can there still be an exercise of control?

Parents decide how much money is put on the card each month, and then the children manage it from there. They know how much they've got, and it's up to them to budget for their needs. There's no chance with one of these that a student will rack up thousands of dollars in debts.

Parents could just give their children cash each month. Or send them a check if they're away at school. But having the ability to credit a card that's already in your child's hands has the advantage of convenience and that makes it easy for financial management.

For security purposes, there's no chance for the credit card to get lost in transit, but if it happens, the card becomes useless without the PIN.  As for cash, when it is stolen, it's really gone.

Where parents may draw the line:

It is also possible for parents to set parameters for the cards in terms of where they can and cannot be used. That way if there are certain types of establishments where you don't want your son or daughter to spend the money you're giving them for living expenses, they can be blocked. This is done by business categories though, not by individual establishments. This feature is part of what makes this type of card a financial management learning tool. It's ideal for youths who aren't quite ready to have an actual debit card or credit card.

How much does it cost?

These cards usually have a modest activation fee and a minimal monthly use fee. People in the financial industry who sell these cards love them too. A sales agent receives a commission for each card issued as well as a portion of the monthly fee for as long as the card is active. This makes is a win/win for families and for the bank card industry.

Also in the works are websites that focus on teaching financial management skills and fiscal responsibility to youths through interactive games and other lessons geared towards youths. These features combined with parental input ought to help many a young person get off to a financially sound start.