As parents, we want to give our kids the best shot at a successful future. For me, that includes teaching them how money works—not just how to spend it, but how to think about it. I recently opened a Revolut Junior account for my son, and it’s been an eye-opening experience—for both of us.

A Better Way to Learn About Money

When I was growing up, money was a limitation. We didn’t have much, and that naturally shaped our values. For many in my generation, “No, we can’t afford that” was a daily reality. That’s no longer the case for a lot of families in Europe today—including mine.

That’s a good thing—but it also means our children may grow up with no understanding of what things are worth. They might hear “yes” more often than “no,” simply because we can now afford what our parents couldn’t.

This is why I wanted to introduce financial literacy early, before habits form and before money becomes just something that “comes out of the card.”

Weekly Allowance: No Strings Attached

Right now, my son receives €10 per week. It’s not tied to chores. It’s not a reward system. It’s a tool. The goal is to help him learn to make small decisions, evaluate trade-offs, and feel the impact of running out of money.

One friend in our GLC community joked: “a kind of universal basic income, then?” I get the humor—but the point is to separate money from obedience. I’m not paying him to exist. I’m helping him build a relationship with money.

We’ll probably introduce earning opportunities in the future, but they won’t be the usual “take the trash out” jobs. Instead, we’ll look for creative or productive projects where he can add real value and learn the power of entrepreneurial thinking.

The Fun Side: Customizing the Card

One of the unexpected highlights was customizing the card together. We picked the design, added his name, and made it feel uniquely his. That small interaction gave him ownership and pride.

When the card arrived in the mail, it was a big moment. Kids almost never receive traditional post anymore, so that envelope with his name on it made the whole thing tangible and memorable. It gave him a sense of responsibility and excitement about using it.

What Revolut Junior Gets Right

• ✅ A prepaid card linked to your Revolut account
• ✅ Full parental control with instant notifications
• ✅ A fun, simple app interface designed for kids
• ✅ Built-in tools for savings goals, tasks, and allowance
• ✅ Card customization that makes it feel personal

It’s also ideal for travel and online purchases—no more sharing your own card or handing over cash in unfamiliar currencies.

Looking Ahead: Financial Confidence

At the moment, my son is already curious about investing. He can read a stock chart and tell me what’s happening—though of course it’s too early for him to invest responsibly. But that curiosity is the seed that leads to long-term understanding.

Many of us were never taught the difference between an object’s price and its value. With tools like Revolut Junior, we can help our kids build that distinction from the start and grow into financially confident adults.

Want to Get Started?

Revolut makes it easy to open a Junior account—even on the free Standard plan, you can create one child account and start introducing financial education right away.

If you want access to additional features like savings goals, tasks, multiple child accounts, and priority support, you can always upgrade to a Premium or Metal plan later on.

👉 Click here to sign up for Revolut using my affiliate link.

It’s free to get started, and helps support the blog. Thanks!

Fiscal and monetary policy are the two primary tools governments and central banks use to influence a nation’s economy. While they have distinct mechanisms and objectives, their interplay can significantly affect economic stability, growth, inflation, and employment. Understanding how these policies function is essential to grasp the broader economic picture.

What Is Fiscal Policy?

Fiscal policy refers to the decisions made by a government regarding its spending and taxation. These decisions directly influence the economy by altering the level of aggregate demand, which is the total demand for goods and services within an economy.

Key Components of Fiscal Policy

1. Government Spending:
   • Increased spending on infrastructure, education, and healthcare can stimulate economic growth by creating jobs and boosting demand.
   • Conversely, reducing spending can help control inflation or reduce national debt but may slow economic growth.
2. Taxation:
   • Lowering taxes increases disposable income for consumers and businesses, encouraging spending and investment.
   • Raising taxes can reduce demand and slow down an overheating economy.

Types of Fiscal Policy

• Expansionary Fiscal Policy:
  • Involves increased government spending or tax cuts to stimulate economic growth, often used during a recession.
• Contractionary Fiscal Policy:
  • Entails reducing government spending or increasing taxes to control inflation, typically employed during periods of economic overheating.

What Is Monetary Policy?

Monetary policy is the process by which a central bank, such as the Federal Reserve in the U.S., controls the money supply and interest rates to achieve specific economic objectives, such as controlling inflation or promoting employment.

Key Tools of Monetary Policy

1. Interest Rates:
   • Central banks adjust benchmark interest rates to influence borrowing and lending. Lower rates encourage borrowing and spending, while higher rates aim to reduce inflation by slowing down economic activity.
2. Open Market Operations:
   • Central banks buy or sell government securities to influence liquidity and interest rates in the economy.
3. Quantitative Easing (QE):
   • Involves creating money to purchase long-term securities, injecting liquidity into the financial system.
4. Reserve Requirements:
   • Central banks can change the amount of reserves banks must hold, impacting how much money they can lend.

Types of Monetary Policy

• Expansionary Monetary Policy:
  • Involves lowering interest rates or increasing the money supply to boost economic activity, often used in a recession.
• Contractionary Monetary Policy:
  • Entails raising interest rates or reducing the money supply to combat inflation.

How Fiscal and Monetary Policy Interact

Fiscal and monetary policies often work together to influence economic outcomes. However, their effectiveness depends on coordination and timing.

1. Complementary Policies:
   • For example, during a recession, expansionary fiscal policy (increased government spending) and expansionary monetary policy (lower interest rates) can jointly stimulate demand and economic growth.
2. Conflicting Policies:
   • When fiscal policy is expansionary (e.g., increased government spending), but monetary policy is contractionary (e.g., higher interest rates), the two can offset each other, leading to mixed economic results.
3. The Role of Expectations:
   • Economic agents, such as businesses and consumers, often base their decisions on expectations of future policies. Mixed signals from fiscal and monetary authorities can create uncertainty, reducing the effectiveness of both policies.

Case Study: December 2024 Market Reaction

The recent market crash following Federal Reserve Chair Jerome Powell’s December 2024 announcement highlights the delicate balance between fiscal and monetary policy. The announcement included a modest interest rate cut but signaled caution regarding inflation, setting the stage for potential tensions with anticipated fiscal policies under the incoming Trump administration.

1. Powell’s Announcement:
   • The Federal Reserve reduced its benchmark interest rate by 25 basis points but projected a slower pace of rate cuts in 2025. Powell emphasized that inflation remained above the Fed’s 2% target, warranting a conservative approach.
2. Trump’s Fiscal Policy Expectations:
   • The incoming administration’s proposed tax cuts, deregulation, and increased government spending are expected to boost demand. However, such expansionary fiscal policies could further exacerbate inflationary pressures.
3. Market Reaction:
   • Investors interpreted the Fed’s cautious stance as a sign of potential conflict between fiscal expansion and monetary tightening. This uncertainty led to a sharp sell-off in equities, with major indices experiencing significant declines.
4. Long-Term Implications:
   • If fiscal policies under Trump lead to inflation while the Fed maintains a conservative monetary stance, the economy could face challenges such as higher borrowing costs, reduced investment, and slower growth.

The Balance of Power: Who Drives the Economy?

The relative influence of fiscal and monetary policy depends on the economic context:

• During recessions, fiscal policy often takes the lead by directly stimulating demand through government spending and tax cuts.
• In periods of inflation or economic overheating, monetary policy plays a more prominent role by controlling money supply and credit availability.

However, mismatches between fiscal and monetary policies can create economic instability. For instance, excessive government spending during a period of high inflation can undermine the central bank’s efforts to stabilize prices.

Conclusion

Fiscal and monetary policies are powerful tools for managing an economy, each addressing different aspects of economic health. While fiscal policy directly impacts demand through government spending and taxation, monetary policy influences credit, liquidity, and inflation through the money supply and interest rates.

The success of these policies often hinges on coordination and timing. When aligned, they can foster economic growth and stability. However, conflicts between the two—such as expansionary fiscal policy paired with contractionary monetary policy—can lead to uncertainty and mixed outcomes. Understanding how these tools work together is key to navigating economic fluctuations and achieving long-term financial stability.

Interest rates are among the most influential tools in the financial world, wielded by central banks to regulate economic activity and maintain stability. But how do they work, and why do they matter so much? Moreover, how do decisions by the U.S. Federal Reserve (Fed) ripple beyond the United States, impacting currencies like the euro and the lives of people in other economic zones? Let’s break it down.

What Are Interest Rates?

At their core, interest rates represent the cost of borrowing money or the reward for saving it. For borrowers, they determine how much must be repaid in addition to the principal amount. For savers, they reflect the return on their deposits.

Central banks, like the Federal Reserve in the U.S. or the European Central Bank (ECB) in the Eurozone, set a benchmark interest rate. This rate acts as a reference for banks when lending money to one another and influences the rates offered to businesses and consumers.

Why Do Interest Rates Matter?

Interest rates are a critical lever in managing economic activity:

1. Encouraging or Discouraging Spending:
   • When rates are low, borrowing becomes cheaper, encouraging individuals and businesses to take loans for spending or investment. This boosts economic activity.
   • Conversely, higher rates make borrowing more expensive, discouraging spending and investment, which can cool an overheating economy.
2. Controlling Inflation:
   • Inflation occurs when prices rise too quickly, eroding purchasing power. Central banks may raise interest rates to reduce spending and slow inflation.
   • When inflation is too low or the economy is sluggish, central banks may lower rates to stimulate growth.
3. Influencing Employment and Growth:
   • Lower rates generally lead to more business investments and job creation, while higher rates may slow growth and potentially increase unemployment.

Money Printing and Its Role in the Economy

Money printing, or quantitative easing (QE), is another powerful tool used by central banks, often in conjunction with interest rate policies. To understand this, we must first explore how money is created in the modern financial system.

How Money is Created

1. Central Bank Creation:
   • Central banks create money electronically. For example, the Federal Reserve doesn’t physically print dollars but adds reserves to banks’ accounts in the central banking system.
   • This newly created money is typically used to purchase financial assets, such as government bonds, injecting liquidity into the economy.
2. Fractional Reserve Banking:
   • Commercial banks play a significant role in money creation through lending. When you deposit money in a bank, only a portion of it is held in reserve; the rest is loaned out.
   • For example, if a bank holds $1,000 in reserves and has a reserve requirement of 10%, it can lend out $900. The borrower spends this money, which is then deposited in another bank, allowing further lending. This process effectively multiplies the initial deposit, expanding the money supply.
3. Quantitative Easing (QE):
   • In QE, the central bank creates money to purchase long-term financial assets like government bonds or mortgage-backed securities.
   • This increases the balance sheets of financial institutions, encouraging them to lend more to businesses and consumers, which stimulates economic activity.

Impact of Money Printing

1. Lowering Long-Term Interest Rates:
   • By buying large quantities of bonds, central banks increase their prices and reduce their yields, which are a proxy for long-term interest rates.
2. Stimulating Borrowing and Spending:
   • The increased liquidity and lower borrowing costs encourage businesses and consumers to take loans and spend, boosting economic activity.
3. Preventing Deflation:
   • In times of economic downturn, money printing helps prevent deflation by maintaining liquidity and ensuring there’s enough money circulating in the economy.
4. Boosting Asset Prices:
   • QE often leads to higher stock and real estate prices as investors seek returns in riskier assets due to the abundance of cheap money.

Risks of Excessive Money Printing

While money printing can help stabilize economies during crises, excessive use can lead to problems such as:

• Inflation:
  • When too much money chases too few goods, prices rise, eroding purchasing power.
• Currency Depreciation:
  • Over-reliance on money printing can weaken a currency’s value compared to others, making imports more expensive.
• Asset Bubbles:
  • Excess liquidity can inflate the prices of assets like stocks and real estate, leading to unsustainable bubbles that may burst.

During the COVID-19 pandemic, for example, significant money printing by central banks worldwide helped economies recover but also contributed to inflationary pressures in subsequent years.

The Fed’s Role in the Global Economy

The Federal Reserve’s decisions have a far-reaching impact, given the U.S. dollar’s status as the world’s primary reserve currency. Changes in the Fed’s interest rates can:

1. Strengthen or Weaken the Dollar:
   • Higher U.S. rates attract foreign investors seeking better returns, increasing demand for the dollar and strengthening its value.
   • A stronger dollar can make U.S. exports more expensive and less competitive globally but reduces the cost of imports, benefiting U.S. consumers.
2. Affect Capital Flows:
   • When the Fed raises rates, investors may pull money out of other economies to invest in the U.S., leading to capital outflows from emerging markets and potentially weakening their currencies.
3. Set a Global Benchmark:
   • Many countries’ currencies and economic policies are tied, either directly or indirectly, to the dollar. A change in U.S. rates can force other central banks, like the ECB, to adjust their policies to maintain competitiveness or economic stability.

Impact on the Euro and the Eurozone

When the Fed changes rates, it can create significant ripple effects in the Eurozone:

1. Exchange Rate Dynamics:
   • A stronger dollar often means a weaker euro. This can make European exports more competitive globally but increases the cost of importing goods priced in dollars, such as oil.
2. Economic Policy Pressure:
   • If the Fed raises rates and the ECB keeps them low, the euro’s value may drop further. To counterbalance, the ECB might need to adjust its policies, even if it conflicts with domestic economic goals.
3. Consumer Impact:
   • A weaker euro can lead to higher prices for imported goods, contributing to inflation in the Eurozone and reducing the purchasing power of consumers.

How It Affects People in the Eurozone

The decisions by the Fed can influence daily life in the Eurozone in several ways:

• Cost of Living: Changes in exchange rates can affect the prices of imported goods, energy, and travel.
• Savings and Loans: If the ECB adjusts its rates in response to the Fed, it can impact mortgage rates, savings returns, and credit availability for European citizens.
• Job Markets: Currency fluctuations and capital flows can affect industries reliant on exports or foreign investments, influencing job opportunities.

When the Fed Announces Interest Rate Changes

The Federal Reserve’s Federal Open Market Committee (FOMC) typically meets eight times a year to discuss and decide on interest rate policy. These meetings are closely watched by investors, economists, and policymakers worldwide. The dates are pre-scheduled and publicly available, providing a regular cadence for market anticipation.

When the Fed announces a change in interest rates:

1. Immediate Market Reaction:
   • Asset valuations, such as stocks, bonds, and real estate, can experience swift shifts. For instance, higher rates often lead to a drop in stock prices as borrowing costs rise and future cash flows are discounted more heavily.
   • Bond prices typically fall when rates increase because existing bonds with lower yields become less attractive compared to newly issued bonds.
2. Impact on Risk Appetite:
   • Higher interest rates can reduce the appeal of riskier assets, such as equities and emerging market investments, as safer options like U.S. Treasury bonds offer better returns.
   • Conversely, lower rates can push investors toward riskier assets in search of higher yields.
3. Real Estate Valuations:
   • Changes in rates directly influence mortgage costs. Higher rates often lead to cooling housing markets as borrowing becomes more expensive, while lower rates can spur demand and drive up property prices.
4. Currency Movements:
   • The dollar’s value can rise following a rate hike as global investors seek higher returns, further impacting international trade and financial markets.

Understanding the timing and impact of these announcements is crucial for investors and policymakers, as they provide insight into the Fed’s assessment of the economy and its future trajectory.

The Interconnected World of Interest Rates

In our interconnected global economy, no country operates in isolation. Central bank policies, especially from major economies like the U.S. and the Eurozone, have far-reaching effects. For individuals and businesses, understanding these dynamics is essential for making informed financial decisions, whether it’s about investing, borrowing, or planning for the future.

Interest rates are more than just numbers; they are a reflection of economic health and a tool for shaping the path forward. As the Fed and other central banks navigate complex challenges, their decisions will continue to shape not only their domestic economies but also the global financial landscape.

Malta, a small island nation in the Mediterranean, has long been a popular destination for businesses seeking a favorable tax environment and robust regulatory framework. However, opening a bank account in Malta as a business entity has become increasingly challenging in recent years due to the country’s low-risk policies. In this article, I will explore the banking options available to businesses in Malta and discuss how to navigate these challenges.

The Big Players: Bank of Valletta and HSBC

The largest banks in Malta are Bank of Valletta and HSBC. While these institutions offer a wide range of banking services and have a strong presence in the country, they have adopted low-risk policies that make it difficult for many businesses to open accounts. This is due in part to Malta’s unfortunate greylisting a few years ago. Although the country is no longer grey-listed, the financial sector has tightened up significantly to curb any abuses.

The chances of opening a bank account with these two banks are slim, especially if it’s for a non-traditional business. They are simply not willing to take any chances and are not very interested in attracting new business.

Alternative Banking Options: Agribank and Sparkasse

For businesses that encounter difficulties opening accounts with Bank of Valletta and HSBC, there are alternative banks that may prove more amenable. Agribank, an agricultural and commercial bank, has had some success in accommodating businesses unable to establish accounts with larger banks. Similarly, Sparkasse Bank Malta, a subsidiary of the German Sparkassen Group, has been known to provide banking services to companies facing challenges with the larger institutions.

Other banks that operate in Malta and could potentially serve as alternatives include APS Bank, Lombard Bank, and FIMBank. These banks may be more accommodating to foreign businesses, but it is essential to research their specific requirements and policies to determine whether they are a good fit for your company.

It is quite common for these alternative banks to charge an application fee, in order to cover their costs of processing the application and determine if your business would be a good fit. They will also typically charge extra fees on a yearly basis when compared to the larger banks that don’t have any fees beyond the usual card fees and currency conversion fees.

The Hassle-Free Option: Wise (formerly TransferWise)

For businesses seeking a more straightforward solution, Wise (formerly known as TransferWise) is an excellent option. This fintech company provides borderless accounts, allowing businesses to receive and make payments in multiple currencies with minimal fees. While Wise is not a traditional bank, it offers many of the core banking services that businesses need, such as a debit card and currency conversion.

Wise’s borderless accounts are especially useful for businesses with international transactions and make it easier to manage finances without dealing with the stringent requirements of Maltese banks.

Open a business account with Wise

Conclusion

While opening a bank account in Malta as a business entity can be challenging due to the country’s risk-averse banking policies, there are options available for those who persevere. By considering alternative banks like Agribank and Sparkasse or using innovative financial solutions like Wise, businesses can successfully establish their banking presence in Malta and reap the tax benefits of operating in this country.