Why should we send the next generation out into the world to make the same money mistakes when we can teach them to be more financially secure and credit savvy long before they leave the nest? Parents are the key influencers on a child's financial future, so we're reaching out to help them prepare their children to navigate the often confusing world of consumer finance.
Baltimore, MD (PRWEB) July 28, 2008
A new school year is quickly approaching which means many parents are preparing to send their children to college - away from home for the first time. Will they be prepared to handle their newfound financial independence? Will they face the common college credit troubles? In order to help them raise more financially-savvy kids with the best shot at a debt-free future, providers of CareOne Credit Counseling Services offer parents some free, educational tips.
"Many Americans are currently buried in credit card debt or suffering from other financial woes," says CareOne Credit Counseling Services Spokesperson Clarky Davis. "Why should we send the next generation out into the world to make the same money mistakes when we can teach them to be more financially secure and credit savvy long before they leave the nest? Parents are the key influencers on a child's financial future, so we're reaching out to help them prepare their children to navigate the often confusing world of consumer finance."
Agencies that provide CareOne Credit Counseling Services suggest the following tools and tactics to help those parents interested in raising more financially responsible children:
1. Set the example. Parents are role models. If they seem content to live in debt, over-extend their lines of credit and pay bills late, their children are more likely to follow suit. Even if it isn't possible to drastically change your financial situation, by taking the initiative to improve your finances you'll show your kids the right practices for financial management. Finally, to further embed the information in their minds, explain why these lessons are important and how they affect everyone's monetary future.
2. Start kids saving early. Whether using a piggy bank or savings account, show kids the value of saving money. To begin with, have your children make a list of things they want to save up for, so that they have a tangible goal from the onset. This will boost their excitement level as they watch their savings grow. In addition, by paying for all or a portion of a large ticket item with their savings, they are more likely to value it knowing they worked hard to save up for it. When kids grow up saving money, they'll have less of a need to rely on credit when they're away from home.
3. Have kids earn money rather than bestowing gifts on them constantly. You can do this by adopting a weekly or monthly allowance system in which children are given money for performing their regular chores. You can even provide additional incentives by assigning set values for performing certain "specialty" chores. This is a great way to teach your children the concept of overtime and the value of hard work. When children spend their own, hard-earned paycheck, they're more likely to develop an appreciation for the value of money than when mom and dad buy them gifts on a whim.
4. When kids get older, consider giving them a prepaid credit card with a set budget. This introduces them to the convenience of credit cards but still forces them to focus on what they're actually spending because once it's depleted, it's gone.
5. Teach children about credit. Don't wait until a child is about to move out or go away to school to start teaching them about credit. Help them understand the concept of credit ratings, what factors affect your credit score and how a poor credit rating could negatively impact their financial future. Teach them about interest rates, and how they can affect the amount of time it takes to pay off a credit card balance or loan. Educate them on the many disadvantages of making credit card purchases such as late fees, monthly account fees, or anything else adding to their total balance. This way, they can make wiser decisions about what something really will cost if bought on credit, or whether buying with cash is a more responsible choice for that item.
About CareOne Credit Counseling Services:
CareOne Credit Counseling Services is a service mark of 3C Incorporated. CareOne agencies are industry leaders committed to providing consumers with education and debt management services related to improving and maintaining their financial health. CareOne agencies have helped over 4.5 million people pay down debts through their solid relationships with over 220,000 creditors.
For more information about CareOne Credit Counseling Services, please visit http://www.CareOneCredit.com, or contact Clarky Davis at (410) 925-9769.
CareOne Credit Counseling Services
8930 Stanford Blvd.
Columbia, MD 21045
Phone: (410) 925-9769