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Teaching Students To Keep Out Of Credit Card Debt - The
Parents Role
Parents have the full responsibility for their children and
their education. It is up to parents to teach their children
what's right and what's wrong, how to conduct themselves as good
citizens, how to cross the road safely and generally protect
themselves from harm. In fact, up until the time that child is an
adult, the parents have responsibilities in every part of that
child's life, right up until the time they are a college
student.
The influence of the parents, however, goes way beyond college
student days. Whether they like it or not, or even admit it,
everyone is influenced not only by the way their parents have
treated them, but also by the behavioural patterns of the
parents. That influence can be good, bad or neutral, but it is
there, and it affects many aspects of daily lives. One of the
main features of daily life is finance: money, debt, borrowing,
lending, spending, and credit cards all fall within that
sphere.
It follows that parents can have an influence on their
children's attitude to credit cards and credit card debt. As a
good teacher, mentor and financial adviser, the parent can help
to create a positive financial attitude in their children that
will help them through their college student days, and eliminate
or prevent credit card debt from their future lives.
What Can A Parent Do To Help Their Student Children Prevent
Debt?
Parents are not the only influence on their children. They and
their children face a barrage of marketing for credit cards that
has reached brainwashing proportions. Easy credit pervades
society like a highly contagious virus; it is difficult enough
for the parents not to succumb to the debt that follows easy
credit, let alone their student children. And if the parents
succumb, what chance do the children have?
Well, all is not entirely lost. All parents know, or should
know, that trying to force feed attitudes and habits on their
maturing children is likely to backfire. Many children are
rebellious, and will often be inclined to go against the parents
wishes or advice. That would apply as much to teaching how to
manage their finances as anything else.
However, if you accept that you cannot just force something on
your children, you can bring them up in an environment that may,
through their own observation, make the children think twice
about running up credit card debts as a student, and later still
in their lives. Here are just a few ideas:
1. Get the children into the saving habit from a young age,
but do it in a way that let's them see the benefits. Start a
savings account for them even as a one year old, and as they get
a bit older, just explain to them what it is and why. No harsh
lectures, just a simple explanation that you are helping them to
save money for something they will appreciate later. But not too
much into the future; saying they will not be able to touch it
until they are 25 will not help.
The savings theme can be on two levels. Part of the savings
could be long term, but part also for something the child will be
able to buy within a year. That way, the child has the
anticipation of a benefit within a reasonable time; the balance
of the savings can go on to accumulate. Ensure you have a savings
account that will pay interest on all money in the account, so
that when the first and subsequent interest payments are posted
to the account, you can show the child that they have this
"bonus" in their account. Explain it is the bank paying them
money for leaving their savings in the account.
It is important for the child to feel that it is their money
that is being saved, so explain it is part of their pocket money
being put away. Also encourage them, but not force them, to
sometimes put birthday or other gift money in the account too.
Over the years, this will, hopefully, become a habit that is a
useful contra to the debt culture. They will get used to the bank
paying them, so when it comes to considering credit cards later,
they may be more likely to question the large interest charges
the bank makes for using the credit cards.
2. Encourage children to earn a bit of extra pocket money by
doing little jobs around the house or in the garden. Say this
will help them save for whatever it is they want to save for. Car
washing, mowing the lawn when old enough, vacuuming; whatever
needs to be done, ask if they would like to do the jobs for the
extra money. Then, when paid, encourage them, but do not force
them, to save at least part of the earnings. Again, this could
become a habit that will stand them in good stead later on, and
they will tend to consider the working route to extra money
rather than expensive borrowing.
3. When they start doing more advanced maths, say at 9 or 10
years old, help them do a little budget plan for their savings.
That will be a simple but quite mature approach for them.
4. The most difficult of all is to set a good example, but do
not make a big fuss about it. Mention casually once in a while,
for example when there's a commercial on television for a credit
card, that the charges are so high, but it is probably best not
to give serious lectures and warnings about credit cards and
debt. Try not to use credit cards yourself, especially lavishly
and in front of the children.
There is not guarantee that any of the above will make one
iota of difference, but at least, as with many aspects of
parenting, you have given it your best shot.
This
student debt article was written by Roy Thomsitt, owner and
part author of the Eliminate Credit Card Debt Now website.
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