How did your parents successfully teach you about credit? Or how are you teaching your kids?

[Anonymous]

This thread is inspired by the guy who went from "hood" to "good" credit. I laughed, but I totally understood where he was coming from. We didn't grow up in the hood but we definitely had hood mentality about money. My parents were concerned with keeping the lights on and if that meant borrowing from Peter to pay Paul then that's what they did. I don't ever remember them having credit cards, but I do remember they used to have to make the "Beneficial" payments which I came to realize as an adult was a finance company that gave them a loan they had a hard time repaying. 

I got credit cards as an adult and ruined my credit two ways. The first way was thinking if I had a credit card that was actually $500 I could spend. Like it was just sitting in my pocket and I could buy what I wanted and pay it back next month (which always seemed like much further away than 30 days).  The second way my credit was ruined was by just not paying attention to bill due dates and letting multiple bills go to collections.  We lived (are still living to an extent) paycheck to paycheck around here and for many years things like the mortgage, car payments, medical bills etc were paid in order of which situation was the most dire at the moment, not which one is due.  If the lights are off, you pay the electric bill and the mortgage will get caught up later.

I'm taking steps to repair my credit. I've started using YNAB which will repair my mentality about finances, but I don't know how to teach my kids.  They are 14 and 12. They don't have jobs and I really don't have allowence money in my budget to start giving them money. So what financial lessons can I teach them even though they don't really have money?

Even if they did have money, what financial lessons do upper middle class financially independent people teach their children? Having not grown up, or ever lived in that situation, I wouldn't know where to begin. But I want better for my kids, so I'm trying to learn.  

[Anonymous]

My parents didn't teach me jack.  We were relatively comfortable when I was a kid.  When I was in my twenties my parents got divorced.  Turns out my dad had them in a huge amount of debt.  No late payments, just cards maxxed out, 2nd and 3rd mortgages, etc.  I guess I learned from them (once I crashed and burned with my credit twice), not to be like them.  BTW, I'm not sure about YNAB, but I use Mint.com and it's awesome and free.

[vanillabean]

Being rich is like being ten feet tall. Good for some things, bad for others. That's what Mama Hanson taught me!

[Kenny]

They taught me how not to do things.. which is more valuable at times.

[Anonymous]

My parents taught me very well. That is one thing I will give them on. I rarely remember them using credit cars, but they always used cash and always were able to buy us whatever we wanted and take us on vacations.

I have a lot of siblings and only 3 us are good with money/credit. I just it just didn't stick to all of us. I

[MissMoni223]

My parents taught me what NOT to do concerning credit. My parents divorced when I was 3, therefore I was raised by my mom. I never saw her use a credit card, but I do remember her writing checks. I found out later that some of those checks BOUNCED! She never had any heart to heart with me about saving, balancing a checkbook, credit cards, or anything of the like.  Around 17 my godfather got involved and shared bits & pieces of financial wisdom. He was the first person that I knew personally with an 800 credit score, LOL!!! Everything else I learned from experience and the internet.  In this day & age kids can find out whatever they want via GOOGLE!!!

[Gunnar419]

My parents taught me very little about finances and nothing about loans or credit cards. I still learned a lot from them, though, just by example.

They were a mismatched pair who fought constantly about money. Mom was inherently sensible, responsible, and a saver. She also worked in a bank so I got at least a glimpse of the credit world (though her job didn't involve finance at all, just backoffice work). Dad was the classic penny wise pound foolish. He was obsessed with petty amounts of money and always looking for "bargains" that turned out to be very costly in the long run. He thought my mother was spending him into his grave and constantly complained about her "spendthrift" ways to anyone who would listen.

She finally turned the household finances over to him and within a year he had damn near ruined us. After Mom kept us debt free, he managed to get us both behind in all the bills and in serious debt to some storefront finance company. He handed the finances back over to her, but he still kept hunting for useless "bargains" and never quit complaining about Mom and money until the day he died.

Everything they taught me about money was by just by their examples, what to do and what not to do. Fortunately I also inhereted or learned from Mom's everyday good sense, which carried over into both my spending and my credit management. Unfortunately, strife over money left lifelong scars and emotional issues about spending that I've always had to cope with.

[Anonymous]

My parents went from upper middle class to extremely lower middle class when I was 9. Mom lost her career with a large insurance company and a conartist caught 'em with their pants down (metaphorically speaking). This taught me to be terrified of credit, but very diligent with savings.

My ex-husband was absolutely horrible with finances and I ended up with worse than bad credit and used it even less. A roommate convinced me that I needed a little, so I took out a personal loan that I now know was an absolutely horrid idea. Grand ideas of paying it off early died a horrible death. :\

My husband (the good one) isn't/wasn't so wary about credit; put internship living expenses on credit. Not a great idea, but we were doing okay getting everything paid down. Than... we just got caught in the same recession as everyone else. Lived off savings for almost 9 months, after we both lost jobs after the '08 crash... but ended up in BK anyway.

I learned a TON as we went from post-BK to almost home owners *knock on wood* and am going to absolutely pass on what I've learned via the School of Hard Knocks to my kids.

My eldest is only 5, but is already learning the 3 jar method of Save / Give / Spend and spent weeks saving her (earned) allowance to buy a specific toy. We'll get into the world of credit a little later.

[DevotionToU]

I never got a ton of advice on finances/credit from my parents growing up, and I have been paying for it for a while.  I have a reasonably solid credit profile, but I wasn't taught well enough to keep balances in check, so I have had a lot of revolving credit for years and years.  Thankfully I never spent way beyond my means and have never missed a payment, but I am in a worse situation than I should be in.  There should be classes taught in High School preparing young people for the world of credit (as it is an important thing to be aware of at that important age of stepping out into the world on your own).  

[Anonymous]

My parent taught me nada on credit. My parent aren't bright with finance either. Actually my mom told me to steer clear away from cedit card, because of her bad history of using credit cards. Ironically, all the debt she had acculimanted from her cards that had eventualy been paid off when I was young, she ended up with a better credit score than my dad. LOL