Marketers and advertisers have already figured out that the teenage demographic accounts for a huge segment of the disposable goods market. They have the disposable income, and now, 10% of these teens even have a credit card.
So how does a parent help their teenager stay out of debt? Below you will find some simple guidelines and ideas. Most importantly though, talk to your child and encourage positive spending habits.
Step 1: Be Your Child’s Role Model - Chances are, your good spending habits will rub off on your children. Likewise, if you have debt issues yourself, it is vitally important that you discuss appropriate ways to handle money with your child.
Step 2: Give Your Child Knowledge – Set up a time to sit down with your teenager before they get themselves into debt. Discuss appropriate spending habits as well as options your teen has to set up a savings/checking account. Also make sure to identify a course of action should your teen get into debt: will they be required to repay their own debt, or will Mom and Dad take care of it or them.
Step3: Guide Your Child’s Spending – Pay attention to the money your child makes, then encourage them to save some of their money, wile making wise choices with the remainder. You have the right, even if it is their money, to make suggests and alter poor choices.
Step 4: Teach Your Child about Credit Card Debt – Many teens don’t know how seriously bad credit can affect their lives. Make sure they understand about increased interest rates and bad credit reports. ■
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