Debit Cards V Credit Cards
When you’re under 18, you’re lucky! You can’t get into trouble with credit cards as you are under the legal age! But a lot of young people are encouraged to get credit cards when they turn 18! Beware as misuse of a credit card is one of the easiest ways to get into debt.
Let’s first look at the differences between the two. A debit card gives you access to your own money, so you are limited to withdraw or spend only as much as is in your account. When you turn 18...
Weighing up the Options
To make a good decision you need to start with the facts in front of you. The two worksheets you have prepared will come in very handy in exploring all of the possible ways to allocate your money.
Say you have 3 goals. Goal 1 is next year's school ski trip that we mentioned earlier. Goal 2 is the cool pair of shoes you saw at Tred last week – you want them for James' party in 4 weeks. Goal 3 is to buy Kylie's latest CD – it's on sale in Kmart for the next two weeks, otherwise you'll pay full price.
Let's take a look at each goal in more detail.
|
Detail
|
Cost
|
Time left to reach goal
|
Goal Time Frame
|
|
|---|---|---|---|---|
| Goal 1 |
Ski Trip
|
$600
|
10 months
|
Medium term
|
| Goal 2 |
Shoes
|
$50
|
4 weeks
|
Short term
|
| Goal 3 |
CD
|
$20 (sale price)
|
2 weeks
|
Very short-term
|
Pretend that you've recorded your expenses, looked at your cashflow and come up with a left over amount of $20/week that you can put toward your goals. How are you going to allocate the money to reach all of your goals? There are a few ways you can go.
Strategy 1 – Work on one thing at a time, in order of urgency.
Strategy 2 – Work on the short-term ones together, and put off the medium-term goal for now.
Strategy 3 – Work on them all together.
Which strategy is the best? Which one would you choose?
