There has been a lot of commotion in the media over the past decade about speaking with your kids when it comes to drugs. The media attention is definitely not without merit – such topics should be discussed in families in order to encourage a healthy understanding of the topic at hand and encourage children to make good decisions.
The truth of the matter is that at some point as parents you need to acknowledge the fact that your kids are going to make their own decisions - and the best thing that you can do to prepare them for such decisions is to give them the tools ahead of time to choose wisely. The same concerns finances. Many parents raise their kids and never talk to them about how to use credit cards or how bank accounts work in general or even how to write checks. Failure to do this as a parent could mean potentially setting up your child for financial failure at a later date in time.
Many people complain about how kids are no good with money these days – but how many can say that their parents actually took the time to sit down and explain how money really works? Many kids who end up getting in trouble with either creditors or banks are running into the financial game blind – they see a credit card and understand that using it can get them the items that they desire, but not understand the mechanics of paying it back or what a credit report is and why it’s so important. In order to avoid this and equip your kids for the “real world” as efficiently as possible, be sure to speak with your kids about saving.
Make sure that they understand what credit cards actually do, and what the difference is between a checking and a savings account is. There are thousands of teenagers out there who don’t know this very important information – and, again, many don’t even know how to write checks. Being able to understand how money works is one of the most important skills that a budding adult can possess, and it can save them (and you!) thousands of dollars in debt and headaches.
Most teenagers are not inherently stupid – but many do enter into the financial game without knowing all of the rules. It helps to have a “financial night” with your family every so often when the kids are young. Try to educate them about how bank accounts work and why it’s important to be able to pay off your credit cards and keep a solid financial record. You can even make it fun – try playing Monopoly or other money-related games in order to get everybody into the mood and set the stage for money talks. You’ll be glad you did when your kids are off to a solid financial start when they get their independence!