If you have kids and they’re about that age where they can start applying for credit, then now’s the time to start talking to them about the downside of credit and debt. Who knows, if you’re lucky you might be able to throw in the safe sex conversation and get all of your parenting done in one sitting.
They can be building a positive credit profile in their late teens and be well on their way to owning a home by their mid-twenties. That’s got to seem like a better option than having Junior still living your basement through his 30’s because he ruined his credit just as fast as he got it.
No matter how young your kids are, it’s never too early to get them started on the right path.
You Live and You Learn
Your children shouldn’t have to learn through trial and error, especially if you’ve gone through the same mistakes when you were younger. There probably isn’t going to be a high school class about the dangers of credit card debt. The burden falls to you to make sure they know what they’re getting themselves into.
Millions of teenagers and young adults fall victim to overwhelming credit card debt every year. Right out of the gate youngsters are in need of debt relief and credit repair during a time in their lives when they should be building up strong credit profiles.
The Need to Save Greater than Ever
This morning, financial planner and radio host, Ray Lucia discussed why it’s more important than ever for the younger generations to figure out how to properly budget and save.
“A little baby born today, the actuaries tell us, might live until age 104. So when we talk about teaching them the value of money … our kids and grandkids have got to be thinking about 40 years in retirement. That’s a lot.”
Hell yeah, that’s a lot. While that may not seem like such a huge difference from our latest life expectancy estimates of 78 years old, the amount of time seniors spend in retirement could more than triple.
Currently, people retiring at the “full retirement age” of 66 have, on average, 12 years to budget for. Once you up that age to 104, you’re budgeting for 38 years. That’s more than 3 times as long as people are budgeting for right now. Think about that: could you start putting away 3 times more for your retirement than you are right now? (If you’re not saving any money for retirement then you’re in even more trouble.)
Kids Don’t Care About Money
Kids just want. That’s it … they want everything. But kids do learn by example. Teach them at a young age that when they want something, they need to save up the money for it, and it’ll stay with them. Growing up in an environment where everything was paid for at a later date causes children to downplay the troubles that come with buying on credit. Teach your kids to save and pay cash whenever possible.
It’s even feasible to get your children into investing. You just need to find a product that they’re interested in. Whether it’s Disney or Apple, if they have a vested interest in the company and their products, then they’re much more likely to relate to the financial aspects.
The bottom line is that, just like everything else, learning begins at home. If you’re not letting your kids know about the downfalls of credit and debt, then you’re not properly preparing them for what lies ahead in life. This is especially true if you’ve gone through the trials and tribulations yourself. You owe it to your children to get them ready for a productive, favorable financial future.
