Kids and Credit 

When is too early to teach kids about manners or values? It’s never too early. You just need age-speciifc lessons. That’s what I think about financial education. It’s never too early but we need to give right-sized lessons to various aged kids. Let’s talk credit and kids.Cash- Kids have no idea where money comes from. Try to imagine you have lost your memory and think of the various transactions that go on in a day that involve cash. Kids don’t know how you got the money, but they see you spending throughout a day. As a child matures lessons of more depth about how our family got this money would be helpful. They think it ‘grows on trees’ because they don’t really know how it got in your wallet. There are books on money with characters such as The Berenstain Bears and even coloring books to help gradually get the money message into your children’s lives.Credit- Credit is borrowing money to have something now instead of waiting until you have the cash in hand. When your baby runs out of allowance and still wants something, credit is when they try to get next week’s money this week. Credit is what people use when they haven’t saved for a purchase. Saving is when we plan ahead for a purchase.Get real- Now, get real. Start explaining how you do things. The house and car may be on ‘credit’ in that you borrowed money to buy them. You may have saved for some of the purchase but not all. When I taught a class with middle school kids through Junior Acheivement on credit and ‘savvy shopping’ I began with what a credit card looks like, compared to a debit card, and the functions of each. Use play money to explain how money from your job goes into the bank. That fills your checking account and allows you to buy groceries or pay the cell phone bill with a DEBIT card.A credit card, that looks perhaps nearly identical to the debit card, is not tied to money that has already been earned and set aside for the purchase. How would they like to give up their allowance money for someone to borrow? To go without their money they’d want something in return. And that something is interest.Kids like learning grown-up subjects. Make it practical, real, and they will quickly understand the ins and outs of money.Citations: Marion Syversen, [email protected] Check out our website that includes weekly streaming The information transmitted is intended only for the person or entity to which it is addressed and may contain confidential and/or privileged material. Any review, retransmission, dissemination or other use of, or taking of any action in reliance upon, this information by persons or entities other than the intended recipient is prohibited. If you received this in error, please contact the sender and delete the material from any computer. Email management, archiving & monitoring technology powered by Smarsh, Inc. Disclosure:Only securities and advisory services offered through Wall Street Financial Group, Inc. Registered Investment Advisor. Member FINRA/SIPC. Wall Street Financial Group, Inc., Norumbega Financial and all other entities listed herein are separate entities, independently owned and operated.