Credit Cards, Spending Habits and Kids
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by: barrywaters
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Teaching your children about financial responsibility is one of the most important financial tasks you can take on. In these difficult financial times, there is no time like the present to provide your children with a foundation of frugality and wise spending behaviors. The best way to teach your children financial responsibility is to lead by example. If you regularly purchase things you cannot afford and continue to carry large balances on your credit cards, those practices will be modeled by your children. Likewise, if you pay your bills on time and take time to work on your budget, your kids will be more likely to mirror those practices.
Many financial advisors tell parents to let kids hear their conversations regarding money decisions. Let them listen to you and your spouse or partner come up with a game plan to save for a vacation or a new car, for example. Let them participate in ways to help save or cut costs when your family needs to do so. With age appropriate explanations, help them understand how much things cost and where the money to pay for them comes from. Also set up an allowance system with your kids. Give them opportunities to earn their allowance through completion of tasks or chores, rather than just giving them money. By working for an allowance, kids learn the concepts of spending, earning and saving. Many parents help their kids start a bank account, so they can help them learn how to set their own financial goals and save. By beginning to teach your children about money and budgets once they are old enough to count, you lay the foundation for financial responsibility.
By far, teaching older kids about responsible behaviors with credit cards is the most daunting of all financial lessons. It is wise to provide your kids with lessons about credit cards before they can obtain a credit card themselves. Kids often start receiving solicitations for credit cards, while they are still in high school. And when your kids head to college, they will be inundated with ads for credit cards catering to students. Providing your kids with a healthy respect for and responsible spending attitudes regarding credit cards will give them the confidence to manage the allure of spending more than they should. A debit card is a fantastic way to begin any hands on lesson about credit cards. Since a debit card deducts the payment immediately from a bank account, it reinforces the idea that every person is accountable for what they spend. Some parents give their teenagers credit cards with the caveat that all statements be reviewed together each month. The purchases made on those credit cards must be paid in full each month. Providing your child with hands on lessons about credit cards requires some supervision. Teach your children about them early to protect their financial futures. See more Secured credit cards Credit cards Student credit cards Secured credit cards
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More information regarding credit card applications, review getsmart.com/credit-cards.
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