Teaching Kids Financial Responsibility

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					                   Teaching Kids Financial Responsibility


When you begin at an early age to teach your kids the value of money and the importance
of financial responsibility, you are fostering a healthy development that will help them in
their future endeavors. It's more important than ever to teach your teen how to be credit
card savvy in today's economy. Good credit means a lot and helping your child
understand this at a young age will prepare them for when they go off on their own. Here
are some tips on how to reveal the importance of financial responsibility and encourage
good credit card habits.

Tip 1- Start talking to your teen about what it means to live in the constraints of their
financial realities. Discuss the difference between needs and wants since many teens feel
the need for instant gratification. Explain that it's more important to live within your
means and earn what you spend, as that is the reality for most American families.

Tip 2- Part-Time jobs have been proven to increase a teen's financial literacy, so it's a
good idea to encourage a job that will not interfere with education while still providing
them with a means of earning money that is all their own. Even if they earn an allowance
for you, they should need to perform tasks before they are given any payments. This will
help them learn that they need to earn their money, and once they earn it, they typically
think twice about what they will spend it on after they see how much work it takes to
acquire.

Tip 3- Start them out with a prepaid credit card. Much like a credit card with training
wheels, a prepaid credit card will allow a teen to get an understanding of how credit cards
are used, and the financial concepts behind them without all of the risks involved with a
real credit card. It will also help them learn to track their spending habits and give them
valuable lessons on managing their money.

It's so important for the parents to be good role models for their teens. In light of today's
current economic crisis, children have been witness to parents' poor spending habits,
mortgages that the family can't afford, and a number of individuals with more debt than
they can handle. The best thing a parent can do for their children is to set good financial
habits for themselves too. In the end, your child will gain invaluable tips and habits from
learning early on.

				
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