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Talk to Your Kids About Credit Card Debt

Created: On July 27, 2009 @ 6:33 pm In

Don’t want to see your kids end up deep in credit card debt like you? Maybe it’s time to discuss your [1] debt reduction strategy with your kids to teach them some valuable lessons about credit and debt. Here are some tips to guide you when tackling this topic, no matter how uncomfortable it may be.

  1. Kids are like sponges. They soak up the best and worst habits of their parents. That’s why even if you’ve made mistakes with money in the past, it can be a good learning experience for junior to discuss how you’ve changed your tune and put together a debt reduction plan.
  2. Use age appropriate terms. Young children in elementary school can understand concepts related to saving, shopping for bargains, and only buying what’s needed.  Teens may be more interested in some of the specifics of how credit cards work and how to apply for one. Let your kids know that credit card debt piles up when you buy things without actually have cash to pay for purchases.
  3. Show your kid a credit card statement and explain the different line items. You can even have older kids listen as you request a lower interest rate from creditors. Don’t forget to explain how interest works.
  4. Explain to your teens why it makes sense to avoid getting a credit card until they have a steady job to pay the bills. Many parents make the mistake of getting their unemployed teens a card when they can barely afford to pay their own [2] credit card debt.

Give Kids Financial Tools

Start a dialogue about money early with your kids. The idea isn’t to frighten them or burden them with your financial problems. However, giving them practical information they can use will go a long way to helping them develop [3] fiscally prudent financial habits.

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URL to article: http://www.debthelp.com/blog/2009/07/27/talk-to-your-kids-about-your-credit-card-debt/

URLs in this post:
[1] debt reduction : http://www.ncnblog.com/2009/07/26/what-works-for-me-debt-reduction-mindset/
[2] credit card debt: http://www.daveramsey.com/the_truth_about/teens_and_credit_cards_3592.html.cfm
[3] fiscally prudent financial habits: http://www.msnbc.msn.com/id/32125205/ns/business-businessweekcom/