Here are five tips to help parents separate fact from fiction regarding credit score myths and financial behaviours that could be passed down to future generations.
• Practice what you preach. Becoming dependable when paying your bills with keep your credit in good standing which will help you down the road when it comes time for a major purchase such as a home, or car. It will give you the best possible chance to receive a loan with better interest rates. Lead by example.
• Start early. When your kids start asking for money, that's the time to sit them down for a "money talk". They need to be aware that "credit" is not free money and there are consequences to treating it that way. Explain interest rates, and how to make credit work for them, not against them.
• Make credit a family affair. Letting the children become a part of the budget and bill paying sessions will help them understand the true cost of necessities. Allow them in on the financial discussions. Explain the unfortunate results of poor financial planning.
• Set family financial goals. Teach children that money does not just fall out of the sky, that they need to save for the things they want rather than using credit to spend money they don't have. This helps them learn how to set financial goals. Letting them purchase the things they want with their own hard earned money will help them be more respectful of and appreciate the value of a dollar.
• Explain the difference. Children need to understand the difference between needing something and just wanting it. Especially when times are tight.
For more information on making learning fun with interactive web sites check out these links: Planet Orange; $avingsman's Choose To Save; Smart About Money; Credit When Credit Is Due; Fool Proof Me and MyMoney
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