Kids and Cash
adapted from the Spring issue of Thrivent Magazine by Karen Worner
Make sure your sons and daughters know how to manage money BEFORE they head out into the world. “If you send your kids to college and expect they’re going to learn personal finance, you’re sadly mistaken,” says Dan Voss, a Thrivent Financial representative in Appleton, Wisconsin, who has taught Finance Majors at the University of Wisconsin-Oshkosh and found them short on personal finance knowledge. “Most have had very little exposure to reality….how much you have to pay in taxes from your checkbook, the cost of owning and maintaining a vehicle, paying for insurance on that vehicle, how to live within a budget, what health care costs and the like.”
That lack of knowledge is hurting your kids. “We owe it to them to explain the reality of personal finance through early training and advice,” Voss says. The high school years are a good time to begin, so they’re ready to handle money more independently once they go to college or move out on their own.
Here are a few ways to get started!
1. Help them realize the value of money.
Kids of all ages sometimes think Mom and Dad have unlimited funds, but you can teach them that isn’t the case. Talk about how much money you have to spend at the store or try bringing cash and show them that when the money in your wallet is gone, its gone.
2. Caution them about “minimum payments.”
To show the impact of only making the minimum payment on a credit card debt, show them your bill. Thanks to new regulations, credit card companies must now tell you just how much it will cost you in interest and how long it will take you to pay a debt using only the minimum payment.
3. Stress the importance of paying bills on time.
Chances are they won’t have any bills to pay before college, so have them help you pay bills once a month to see all the things that have to be paid for. Explain how late or missed payments can seriously hurt a person’s credit rating. The last thing a young person needs starting out in life is a bad credit rating. It could affect his or her ability to rent an apartment, but a car or even get a job.
If you would like more information on this topic find the full article at thrivent.com or call Mark Worner at Thrivent Financial for Lutherans at 763-682-6011.