Elisabeth Donati Are you concerned about your kids moving back home after college because they’re in debt up to their eyeballs? You should be! There’s talk that more kids leave college these days for financial reasons than academic reasons. Even the ones that do graduate often large amounts of credit card debt and school loans following them into their new careers. Luckily, this situation is completely preventable.
If you’re like most parents, you want your kids to grow up happy, health, wealthy and wise. Part of this equation requires them to learn how to be financially savvy. You try to teach them the value of a buck but all you get is rolled eyes and “yeah, whatever”? You may have tried given your child an allowance, made them save 10% or told them to earn their own money but nothing seems to instill the financial habits or behavior you’re looking for. These methods rarely impart thee financial smarts to kids needed to create adults who make wise spending, saving and investment decisions.
If you’re tired of feeling like your teenager’s ATM machine and the constant nagging when it comes to teaching your kids about money, read on.
Albert Einstein once said, “Setting an example is not the main means of influencing another, it is the only means.” If the statistics are even partly accurate, parents in America are setting a terrible example for their kids. For the first time in history, American’s are spending more than they are saving.
We all know that consumer debt is at an all time high, but it wasn’t always this way. Back before credit cards became the accepted way to buy things, most people bought things with cold, hard cash. This is the example that was set for kids that were born prior to 1950.
So what happened? Well, along came the credit card and things began to change. In 1950 Diners Club and American Express introduced the first ‘plastic money’ because having a credit card created a type of elitism by rich folks. Over time, what the rich had became highly desirable by those who wanted to be rich, or at the very least, look rich. Yet Mr. Thomas Stanley, in his popular book, The Millionaire Next Door, shows that the truly rich do not necessarily do the things and have the things that the majority of society thinks they do and have.
So, how is this translating into kids under 24 being the fastest growing segment of our population filing for bankruptcy? It’s partly because kids aren’t exposed to money and family finances until they are on their own. The main reason for this, parents tell us, is that they say it’s easy to talk to their kids about sex and drugs than about money. They also either don’t have the knowledge themselves or simply lack the tools and resources to teach their kids how money works. This means that kids often move out after high school and are faced with a world full of money but no idea how to use it. After all, dollar bills rarely come with instructions!
So, what can you do about all this? Here are some ideas that might help:
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