• Financially Fit Children

  Filed under Economy, Finances, Payday Loans
  Apr 16

  The public anger that our economy is suffering because the government allowed millions of Americans to obtain massive amounts of debt is causing government officials to propose new laws to prevent this from happening again.  Senator Dodd, for example is proposing new laws for younger people, with one of the requirements being that a parent or guardian most co-sign for loans given to people younger than 21.  While this could be seen as a great idea or another sign of government tyranny, everyone would agree that United States citizens as a whole need a crash course in financial literacy.  And as Senator Dodd rightfully targeted, our children need this crash course the most.

  It is far too easy to get into debt as a teenager.  This isn’t to say that credit cards or car loans or payday loans are bad things even for teenagers; they all serve their purpose and can be extremely helpful.  But young people especially need to understand the dangers of debt.  Here are a few of my recommendations:

  • Get them a credit card – “What!?” you say, “you just said we want to keep them out of debt not get them into it.”  Exactly.  They need to understand how to handle a credit card.  Get them one with an extremely low limit and let them buy gas, groceries, etc with it and teach them to PAY OFF THE ENTIRE BALANCE each month.  It will build their credit and teach them of the dangers of credit card debt.
  • If you’re going to get them a car, get them a crappy used one – Many young people get into debt because of a sense of entitlement, i.e. “My parents had a nice car and house and I want one too.”  They don’t understand that it took you 15-20 years to what what you have now.  They need to get used to living with less, and later, when they’re more financially stable and independent, they can buy themselves a nice car.
  • Have them take a financial literacy course – Many school’s don’t have a financial literacy course (the lack of which is hugely idiotic; it should be required to graduate high-school), but there are simple and free online courses.

  Those are just a few tips to get your children on the right track.  Odds are, if you’re reading this your already teaching them to live life with a sound financial footing, so good job.  Soon enough they’ll be 40, rich, and lending money out to much less financially stable friends.

  No Comments

Leave a Reply

Name (required)

Mail (will not be published) (required)

Website

CAPTCHA Code