Remember that very first time you were on your own. That day of college or university when you thought “Yup, this is it! I’m a full fledged adult now, on my own, making adult decisions.” You were then summoned over to a table giving away free swag! “Free Stuff!” you thought, “Alright!”. As a broke college kid, free stuff is always a great thing, even if it is just a frisbee or a t-shirt or pen. You’re gonna go for it! Besides, how bad can it be to have a newly found credit card? You need stuff, your an adult, heck you need to get yourself some credit! WOOHOO I have MONEY!!
At least that’s how I was walking around my college campus, and heading to one of those tables the very first time, and boy, was that a mistake!
At a young age like that, do we really know much about financial responsibility? Then, I thought I did, then, I thought a credit card would be great, then i thought I would use it only in an emergency situation. Which became a night out at the club and I needed a new outfit, I ran out of alcohol, and for some things that actually did help out with school, but these credit card companies prey on the young kids like I was to not think responsibly. They did the same thing to my husband when he was in University too. This is why, we as parents need to encourage our kids, at a young age what financial responsibility is!
I don’t want my kids to grow up in debt. Going to college or university is enough debt in itself, but trying to start up your credit then with loans, a credit card, it’s just too much. Over 10 years later (OK more than that but shh) I’m still swimming in debt and trying to repair my credit as a grown married woman with kids. Not school loans (well those too) but just my credit in general from the stupid un-responsible mistakes that I made as a young adult. What we don’t realize then, is credit is something we NEED. When you get out of school, have your own family, you need credit to get a new car, buy a home, sometimes to even get a job.
What we’re trying to do now is clean up our credit, get out of our debts now as a married couple because of the stupid cards we got as kids. We’re working on it, it’s working, but it’s a slow process, and that’s what we’re already trying to pound into my 7 and 9 year old’s heads. Money isn’t free, money is earned, credit cards still have to be paid!
My 9 year old thinks if she asks for something, or wants to do something, we just have to use our card. We had to explain to her that’s not exactly how it works. She wasn’t even sure that we had to actually have the money in an account at the bank, what she thought was that we used that shiny card, put it into the machine and got whatever money we wanted, no matter what. Then came the explanation to her about what exactly a job is, how you make money and how you put money into the bank account. If you didn’t make $500 and put it into your bank account, you couldn’t take out $500 just because you wanted to.
“What about your credit card?” she asked.
“Credit cards are for emergencies” we told her. The bank is basically giving you a loan, but you have to pay it back, and you always have to pay back more than what you’ve been loaned. Say we lend you $2 and you tell us you’ll pay us back in 1 week. If you don’t pay us back in 1 week, we’re going to add 25 cents to every week you miss paying us back that $2. So, if you miss 4 weeks of paying us back, that means you’ll now owe us $3. Trying to get a 9 year old to understand was kind of hard, but I think we got it.
Credit isn’t something that you get for free, it’s something that has to be earned, and responsibly. We’ve got the girls piggy banks and they have learned the consequences of spending all their money. My oldest would get mad when her sister still had $10 to spend at the store, but she no longer did because she spent her’s all at once on Pokemon cards instead of saving it and waiting to get something she really wanted. Did I just reach into my purse when she asked if she could borrow money? Nope, it’s a lesson learned!
We hope to keep pounding financial responsibility into our kids heads as they get older, as we clean ourselves up, we do have 1 credit card, we keep it at a low limit, and something we can use in an emergency yet pay off quickly. No longer do we use it just to use it because we want something.
Lesson Learned, and Lessons being given! I don’t want my kids to fall into the same trap we did!
Check out this audio clip called Drunk on Credit by Dennis Miller and check out My Job Chart to help you find ways to talk to your kids and help them learn about financial responsibility.
August 15, 2013 – 1:25 PM - | Posted in daily life | 3 Comments »