USA Today included a good article in today’s paper that offers a strategy for how college students can start building a good credit history and score. I thought this was pretty good advice, so I thought I’d pass it along to you as well. College is an excellent time for young adults to use credit carefully and wisely and in a manner that will serve them well after they graduate. Here’s the article:
Helping Kids Get Smart About Money
Archive for the ‘Credit Cards’ Category
Here’s the third of four key money phrases your children need know – and should feel comfortable using – when faced with making financial decisions:
3. I made a mistake
Mistakes are tough to admit and even harder to live with. Money mistakes that get buried become compounded disasters. Teach your child that it is only human to make a mistake and that by admitting to the mistake, you can fix it and learn from it.
Often our kids hide money mistakes. In college, they are eager to prove they are worthy of the independence. Chances are that will translate into them living beyond their means via credit.
Before they leave for college, tell them that while you believe in them, you anticipate they will make some money mistakes and that you understand that managing money on their own is a learning process – one that will include mistakes. (more…)
When you think about money phrases your children need know, what comes to mind? Adjustable rate mortgage? Compound interest? Minimum payment? Certainly, all of those are things your kids will need to understand at some point. But first they need to learn some others:
1. I don’t know.
2. I need help.
3. I made a mistake.
4. I’m sorry.
And they need to do more than just learn those phrases. They need to become so comfortable using them that they become instinctive responses when they are faced with financial decisions, such as whether to choose an adjustable rate mortgage. I’ll take them one at a time and show you what I mean:
1. I don’t know. (more…)
Having the (Money) Talk Before College happening at your house? No? Well it’s time and should take place before your student leaves. Consider the tips I offer in my guest column on Jean Chatzky’s blog this week!
Here’s the link: http://bit.ly/17Nv9r5
No. No. No. Are we really having this conversation AGAIN?!? I read last week that Justin Bieber is now promoting a prepaid debit card. Seriously?!?
Parents – step up here if this conversation comes up. Run from products like these. They only benefit Mr. Beiber – not you, not your child.
Here’s the article for those who are interested:
Justin Bieber Promotes Prepaid Debit Card - By Renee Morad,Yahoo Finance
Suze Orman – thank you. Your prepaid card is a good thing for the millions of unbanked adults out there who have no other palatable financial options. Your fee is low and you give them an option to only using cash, and having to pay to have checks cashed. You are also doing a good thing by getting Transunion to gather data on these prepaid cards in the hopes that one day, this data could help get these cardholders some kind of credit score that could bridge them to the traditional world of credit.
BUT, Orman claims that her prepaid card is a good way to teach kids about money. I disagree. It is not the best option for our kids. Nope, not by a long shot. (more…)
This week a teacher in North Dakota reached out to me regarding a question that was raised in her classroom about how someone builds a credit rating if they don’t apply/use a credit card. A great question that not only teens have, but also many adults. Here’s my response:
Establishing credit does not take a long time- so there is no real emergency to do so.
More important is to get it right – to use it wisely and understand it’s purpose and role in your life. My suggested approach would be for students (teens) to get a checking account and tie a debit card to the account. Manage that wisely for a period of time – don’t spend more than you have. (That will not establish credit – but it will give you some practice managing cash flow – and learning to live within your means.) Next would be to apply for a student credit card with a $500 limit and manage that wisely. Choose the card wisely – all cards are not equal. Increase your limit when you NEED to only for things you NEED.
This will help you and your students.
I thought the following story from The Wall Street Journal might be of interest as well:
Last month I had the opportunity to be a guest expert on the Martha Stewart Living Today Radio Show (Sirius XM Radio channel 110) to talk about kids and money. There were some terrific questions that we got from callers during the show, so we have made videos from various segments in case you may have missed the show. The first video I posted a few weeks ago covered the many reasons why it is important to start young when talking about money with kids. (Click here to watch that first video.) Below is the second video in the series where I fielded a caller’s questions about how to handle the topic of money and budgets with kids during divorce, how to approach an allowance, wants vs. needs, etc.
Have you had a similar situation? If so, how did you handle it and what worked best for you and your kids? Or do you do you need some advice for you and your family? Please add your comments/questions below or send me an email: Susan@msgen.com
It is amazing what mimics children are. Even as babies, they learn to smile and say their first words from our example. So it shouldn’t come as a surprise that our children’s money management will generally reflect our behavior. From Day One we are teaching our children our attitudes about money through our actions—as well as through the influences we allow in their lives.
Toys teach lessons, too. As parents, we are the teacher who will most impact our child’s life. But watch out for interlopers—such as toys and advertisements—that will try to teach our children bad money habits.
Years ago, I was in our basement with my girls and spied two “Shopping Barbie” dolls. Each doll came with all the shopping essentials, including a Barbie-size credit card. It was a tiny—but very realistic—MasterCard. Each time Barbie swiped her card through the cash register, you would hear: “Cha-ching. Credit approved.” (I guess credit cards are never rejected in Barbie’s world.) It still gives me chills thinking about the message this “shop til you drop” doll portrayed. I used one of these Barbies in a keynote I did a few years ago to make the point that marketers aren’t waiting to reach our kids with a message about spending, demonstrating how essential it is that parents begin a conversation about money early so the right message gets through.
Let me know if this message resonates with you and your family too.
Have a great weekend!
All credit cards are not alike and first time credit users need basic information before they sign up. Take a look at this for more information about the pros and cons of what is available for the first-time credit card user in your household. http://www.chicagotribune.com/business/sc-cons-0414-started-20110415,0,237885.story