| Teaching Children about Money |
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Andrew
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| Teaching Children about Money |
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Give children age-appropriate financial help
NEW YORK (MarketWatch) -- Don't cave in to your teenager's pleas for a credit card or prepaid "allowance" card.
They're just not ready for plastic, says Janet Bodnar, executive editor of Kiplinger's Personal Finance. She offers a timeline for your child's financial development:
Start by teaching your preschooler to save his or her money. Kids this young literally need to see their money, so don't head for the bank just yet. "They think if their money goes in, they're never going to get it back again," explains Bodnar. Instead, keep your child's savings in a jar or piggybank.
Age 8: Open a savings account. By now, your child is old enough to understand that a bank will keep his or her money safe until it is needed.
Age 16: Open a checking account with an ATM/debit card. "Kids should have checking accounts when they get their first part-time job in high school," Bodnar says. "The key is that it's their money they have access to." Sometimes banks are reluctant to open a checking account for a minor, so be sure to ask about joint or custodial accounts.
Resist the prepaid credit cards marketed to this age group, warns Bodnar. "They're marketed for parents as a tool to teach the kids how to manage their money," she says. "Young kids don't really make a distinction between a prepaid card, a credit card or a debit card. They don't get it. They don't see it as a money-management tool. It's not their money. It's still mom and dad's money."
Age 18: If your child does not yet have a checking account, open one. It's a good preparation for college, and the best way for you to send him or her money in an emergency.
Age 21 or 22: Let your child get a credit card. Of course, you can't prevent him or her from applying after age 18, but Bodnar says a college senior is more prepared for credit. "When kids get credit cards younger in college, it's too much of a temptation. The idea of, 'Mom and Dad will bail me out if I get into a problem.'"
By Marshall Loeb, MarketWatch
Last Update: 12:01 AM ET Feb. 21, 2005
http://cbs.marketwatch.com/news/story.asp?guid=%7B2DF01AA9-D44B-4238-B123-578F13F9F1EE%7D&siteid=google&dist=google
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Mon Feb 21, 2005 5:20 pm |
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SnapThat
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I'd say that this advice is some pretty good stuff. While it's one it's kind of special to have your own credit/debit/prepaid card, it's not really something that's necessary.
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Mon Feb 21, 2005 5:41 pm |
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Epik
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Kind of makes you wish our parents had taught us some of the more important things (financially atleast) in life huh? Well, the past is the past, guess we'll be alright as long as we start thinking about our futures now.
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Mon Feb 21, 2005 6:55 pm |
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trshubby
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| Financial Ed for kids |
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It's a shame that the schools haven't caught on yet regarding the importance of real and substantial Financial Education. I am the parent of teenagers and we've taken it upon ourselves to get them pointed in the right direction.
One thing the author of this article didn't really mention was how vital it is to plan. Setting ambitious but attainable goals, and learning how to reach them, is a vital skill.
Since about age 10 we've focused our children on these principles:
Debt is bad.
Cash is good.
Have a plan.
Invest aggressively when you are young.
Money won't buy happiness but it will buy the freedom to truly enjoy life.
Squints is my hero.
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Mon Feb 21, 2005 7:44 pm |
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SnapThat
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Great way of breaking it down. You've taken a broad topic and simplified it immensely 
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Mon Feb 21, 2005 10:56 pm |
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titus_87
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there is a similar article that can be found at investing pub .com in the news section entitled The Younger the Better.
sleep on IT!
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Tue Feb 22, 2005 1:40 am |
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