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Sending your children out the door to college or their first apartment without a proper appreciation of budgeting can be a death sentence to their future financial freedom.
Giving your children an education about credit cards and the impending interest rates that accompany them is crucial. With their own mailbox, you are no longer the watchdog for the offers that come in the mail promising financial freedom. These credit cards promise financial freedom, but kids don’t always read the fine print and the repercussions that come from maxing out said credit cards.
Much like the beginners at a casino gain a no deposit bonus, it’s important for your kids to learn to stay within their means. As tough as it might seem to turn them down when they are requesting money, you are doing them a favor in the long run by helping them stick to their budgeting means. Of course there are exceptions, but if they want to borrow money, ask them to show you their current budget and explain what went wrong and where they came up short before you open up the purse strings.
There should be a class that teaches youth about the reasons for keeping a clean credit report. If your child maxes out a credit card and fails to make payments, they are going to find blemishes on their credit report. Teach your kids the importance of paying their bills on time and staying away from such failure to make payments showing up on their credit reports.
Budgeting in the college years can be crucial for those post-college expenditures, and keeping a clean credit report is paramount to obtaining cars and new homes a few years down the road.
