Can You Teach Financial Management Through Financial Rewards?
March 23, 2009
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- Image by Mike Tigas via Flickr
How do you reward someone for learning a new subject? Usually it’s the satisfaction of knowing you learned something new, or in the case of financial management, it’s the knowledge of knowing that you have a strong foundation to keep you financially healthy for years to come. But not everyone thinks this way, and sometimes there are new ideas out there.
I was recently reading about how Citibank is offering a new card called the Citi Forward Credit Card, which rewards cardholders for paying your bill on time and staying within your credit limit. The card is being marketed towards teenagers and Gen Y’ers and offers benefits such as:
100 points for paying on time and staying within your credit limit each month, 5 points for each $1 spent in “responsible” categories such as books, movies, music, and restaurants, 1 point per $1 for all other purchases, and 5,000 bonus points for signing up for paperless statements.
Citi decided to pursue this new credit card offering after conducting a survey and finding out that:
76% of [survey respondents] said they would rather learn by being rewarded for the right things they do, rather than learning from their mistakes.
Interesting concept, but is it really teaching you sound financial management, or is it giving you a false sense of learning? The rewards program doesn’t advocate paying off your credit card bill in full, and there are hefty interest fees (29.9%). It’s a good start, but I’d like to see something which teaches you how to set financial goals and create budgets to meet those goals!
Have you bought your copy of Following The Goods? Buy it today!
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Adam Goodman is the author of Following The Goods Financial Management for the Young and Ambitious. Throughout his life, Adam never took ownership of his financial knowledge and no one ever sat down with him to explain what it meant to plan for his financial future. Luckily, while at business school, Adam finally learned how to be smart about financial management and he is here to share what he has learned along his journey with you.
Adam's past experience includes owning and operating his own consulting firm, as well as working as a Consultant with Deloitte & Touche. Adam is currently in a sales and marketing role in the telecom industry.
