Jacob Merkley is the CEO/Founder of Power Over Life, a website that teaches others about important life skills to help them gain power over their life. We had a chance to speak with Jacob about the importance of learning how to manage money wisely, and he gave us a few tips on how to accomplish that.
Tell us a little about yourself. Why did you decide to start a blog?
While I enjoy working with others personally, I wanted to let my voice reach more than just those around me. I liked the idea of people across the world finding my website and hearing what I have to say.
Given that your father helped you begin investing in mutual funds at the age of 12, what advice would you give to other parents about introducing their children to money management and personal finance (especially now that you’re a parent yourself)?
First, parents need to understand that it’s never too early to start. I was investing at 12, but I could have grasped investing concepts earlier than that. My father may have had to walk me by the hand a bit more than he did when I was 12, but it could have happened!
Second, educate to the level of the child. Each child understands to a certain degree. If you can teach them based on their understanding, you’ll have a student for life.
Lastly, make sure you take teaching opportunities and use them to your advantage. Whether it’s at the bank teller, while you’re checking out at the grocery store, or when your kids walk in on you doing the budget, all of these instances are perfect opportunities to naturally teach your kids about budgeting, saving, etc.
What are some of the most important aspects of a personal savings plan?
The most important aspects are looking at the expenses and avoiding unnecessary spending. The first step is to analyze what exactly you are spending money on. Next, it’s all about removing or reducing certain items from your budget that you are spending money on unnecessarily. Those two steps make up the biggest part of creating a personal savings plan.
What do you say to someone who is intimidated by setting or following a budget?
I would say that it doesn’t need to be as difficult as you think it is. You can make it hard, or simple – it’s your choice. You don’t have to keep track of every single penny if you think it’s going to give you a heart attack! Just take it easy and ease into it over the span of a few months.
What are some of the biggest misconceptions about credit cards and credit card debt?
I think the biggest misconception is that credit cards are a great thing. Sure, they are convenient; and yes, they provide some “bonuses” back to you in the end. But if you aren’t careful, they can bite you in the butt like a snake. The biggest problem with credit cards is that it’s just too easy to use them.
For someone who is concerned about amassing too much credit card debt, how can a prepaid debit card help them?
Prepaid debit cards are perfect for this group of people because they aren’t amassing debt at all; instead, they are using money that has been prepaid by them. It’s your money and your money alone that will drop if you use it. It isn’t a card that you need to pay off down the road.
When might it be prudent for a person to use a prepaid debit card for everyday expenses instead of a credit card or a traditional (bank-issued) debit card?
I think all of us should consider using a prepaid debit card. Debit cards are more like cash; it’s painful to see the checking account drop after each purchase. If you are struggling with having a credit card and overspending (or not paying it off), then switching to a prepaid card is definitely a great option.
Finally, tell us one thing that people can start doing today that will help them save money or reduce household spending.
One thing I would suggest doing is paying yourself before you pay for anything else. Once you get your paycheck, automatically put 5% or 10% away into a savings account that you never touch unless it’s an absolute emergency.
Then with the other 90%, you can decide what to do with it. If you pay yourself first, then you just have to live with the last 90%. Sure, it might mean you don’t get the new pants this month that you wanted, but you will have saved a healthy chunk of extra money at the end of the year.
Experience the convenience of a prepaid debit card. Get one today!
Disclaimer : “The views and opinions expressed here are those of the author and do not necessarily represent the views of Green Dot Corporation.”
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