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Teaching kids financial responsibility

Valued Member

Re: Teaching kids financial responsibility

I wish I had been taught financial responsibility at a young age.  Or... any age, really.  Haha!  School of hard knocks here.

 

IMO, it's really never too early.

Message 11 of 15
Valued Member

Re: Teaching kids financial responsibility

Same here, all I got from my parents was "Pay your bills on time, stay away from credit cards and loans -  except for mortgages, don't ever get into debt" Gee thanks! No cards or loans means no credit score, no score means no mortgage, especially these days. No cards or savings when you're young and living just outside of hand to mouth means no safety net. Then any financial emergency can wipe out what little you've managed to put away and put you behind on your bills and in debt. Before you know it, instead of no credit, you have bad credit. All too common. rant/ The way I see it the worst part is it's not not like financial education is an akward topic, I think the hard part for a lot of parents is the idea of giving the kid some money to manage and then NOT stepping in to rescue them when they make a poor decision with it. Kids need to learn that if they can't afford something now, they need they need to save for it or use some kind of credit. If they need credit it needs to have interest. Interest is the real life penalty for not saving. Credit not paid off = no more loans until it is. If you never let them fail they never learn to recover. IMHO would be nice if this was a required middle school or freshman class, but it is really the responsiblity of the parents to prepare kids for the everyday tasks and decisions of adult life. /rant

He may work to make the money, but I work the money to make our lives better.

My Cards: Home Depot, Blue Cash Preferred, Sapphire Preferred, USAA Cash Back Rewards AMEX --- Total CL: 19.7k --- FICO 8 EXP Score 03/18: 744

DH Cards: USAA Rewards Sig Visa, NFCU Platinum, Lowe's, Sam's Club MC ---Total CL: 19.3k --- FICO 8 EXP Score 03/18: 746

Message 12 of 15
Established Contributor

Re: Teaching kids financial responsibility

We discuss budgets to our kids and tell them limits they have if I let them have a toy or snacks at the store. Also, I gave them a challenge to save $100 in a year: from birthday money and cash from xmas and from allowances. To my surprise, they are 60% there in several months. Also, I discuss what credit is and even took them in when my wife replaced her SUV. It was cool for them to see their mom staying in budget and having her financing before hand. I know I have a long way to go and the goal is for my children not make past mistakes like myself.

Message 13 of 15
Valued Contributor

Re: Teaching kids financial responsibility

Amex and Disco allow AUs at age 14; Chase, Cap1, Synchrony at any age. My kids are AUs on three of my cards for aging. Older ones were allowed to use their AU cards for gas when they started driving or allowed to take with them when on a school trip and needed money to eat. I can see what they spent and don’t have to worry about cash.
They all have savings and membership with the CUs I am a part of.
I have two that are 14 or older. They have a checking account as well and NFCU allows their own login at this age. They can see what they have in their accounts, and checking is tied to savings
State Farm Rewards (3,000) ~ Marvel MC (8,000) ~ PenFed Power Cash (10,000) ~ PenFed Promise (1,000) ~ PenFed OLOC (500) ~ Discover ($1,100) ~ Citi DC (2,200) ~ NFCU cashRewards (6,200) ~ NFCU Platinum (2,700) ~ NFCU CLOC (15,000) ~ Venture (10,300) ~ DCU Visa (5,000) ~ Chase Freedom (3,000) ~ Amex Hilton Honors (5,000) ~ Amex SPG (1,000) ~ Amex BCE (1,000) ~ Care Credit (15,000)
Current Scores (6/6/18): 697 Transunion, 659 Equifax, 674 Experian
Message 14 of 15
Senior Contributor

Re: Teaching kids financial responsibility

All of the kids were required to put half of the money received (earned, found, or gifted) into long terms savings.

 

Of the remaining money, half had to go into short term savings for things that might come up, like spending money on a school field trip or that pair of jeans they just had to have, or gifts for the holidays/birthday.

 

The remaining funds (25% of the money received) could be spent immediately.  The majoirty of the time, that little bit that was in their hands was saved.  There was nothing they wanted to spend it on right away or it wasn't enough money to buy what they wanted right away.  Smiley Happy  

Message 15 of 15