Teaching Your Teen About the Risk of Credit Cards
Teaching your kids about money management is a very important lesson, but that lesson becomes even more necessary when your kids are ready to leave the nest and to go to college. College is usually the first time people are exposed to managing their own finances and the way they deal with them at this important time can be a benchmark on how they will manage their finances throughout their lives. If you’d like to teach your teen about money and credit, keep reading to get some good tips.
Good money management is key to knowing how to manage a credit card. Kids learn by example so by keeping track of your own money, saving and doing other good financial practices, you will be teaching your children. But if you’re not so good at that whole money thing it would be good to just talk to them about money. A personal experience can really drive the point home, so share that your are $40k in debt. Instead of being embarrassed, tell your teen the truth. A personal story told from a parent will always work better than stories about strangers they don’t know.
Talk to them sooner, rather than later. Today it’s not unusual for parents to talk about about credit cards and money with children as young as ten. Kids are exposed to much more these days and they may already have questions. You can help them out by answering them. And don’t let it become a one-sided conversation. Keeping it open will promote feedback and learning, on both sides.
Let them know the facts about credit cards. Once they start college, credit cards companies will put a bullseye on your kids. They will most likely be bombarded daily with card applications and free swag to lure them into getting a card. Make sure they know what a credit card can lead too. Instead of just facts, watch a movie together. Maxed Out, is an eye-opening documentary about debt in America. It presents some great statistics, never bores and is a great way to connect and educate your kids without becoming an expert yourself.
Take the initiative and talk with your kids about the dangers of credit cards and money management. This conversation will probably need to be repeated more than once. Definitely keep the lines of communication open when it comes to credit. Use any opportunity you can to educate your teen. Did you get your monthly statement yet? Sit down with your teen and show them how it all works. A talk now may save them from costly debt in the future.
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I completely agree. As with any lessons, it’s best to teach kids before it’s too late and they’ve gotten themselves into trouble. Good post!!
[...] And of course, it’s not just checkbooks we have to worry about. For high school kids it’s also important to teach them about credit cards. [...]