My husband and I felt like 13 was a good age to talk to her about financial responsibility especially after we heard these sayings on a daily basis “I need”, “I want”, “Everyone else has”, “I’ll use my own money”, and “Why can’t I have a bank card”. This was also a time were we saw her money she saved from chores and babysitting quickly diminish. She always has items she is saving for. Currently she is saving for a Mac Laptop. The problem? She always has money in her wallet, making it easy and tempting to spend when the littlest temptation/product beacons her. This typically comes in the form of candy or other un-needed items I tell her I will not purchase for her.
After finding out that we were not going to just pick up and buy her a brand new computer just because she has to work on a computer each night for homework, she decided to start saving. My husband and I felt this was a good time to talk to her about Financial Responsibility the good, the bad, and the potentially ugly.
What we did:
- Bank Card: My husband took Hayli to get a bank debit card. This was a way that she could save her money in an account and should she need to make a smart purchases, she could use her atm card to pay or get money out of atm to pay. This card is linked to us. Meaning that we have access to her account and so does she to keep account of her spending through the online bank program. Should we decide to pay her for chores or babysitting, we can transfer it in her account. This also makes her responsible for keeping track of how much money she has, how much she needs to meet her goal, teaches her how to save, helps her think before making choices, and it keeps her money out of her pockets where it is more likely to be spent.
- Talked: We talked to her about safe spending, budgeting, and building credit. Although she is under 15, we felt like now was a great time to touch on such important issues. We explained to her that we are not going to be here purchasing everything she needs forever. We said that she needs to build a great educational foundation to get a great job and learn how to budget money or she will not go to far or be able to keep up the lifestyle she is used to. My husband and I try and take any open opportunity to remind, revisit, and explain in further detail.
- Examples: We gave Hayli examples so that she could better understand the importance of being financially responsible. We know many people who have lost their homes, jobs, and have major live changing experiences due to poor financial decisions. She knows these people as well and could better relate by us explaining to her how this happened and how to avoid it. We also explained to her what smart financial choices we are making so that she can see how beneficial it is to be smart when it comes to building credit and using safe spending habits.
I also explained to Hayli how credit cards were SO easy to get when I first started college. All I had to do to get big prizes was sign up for a credit card. The best part was being instantly qualified and received a $2,000 limit. It was extremely easy to reach the limit ad even HARDER to get the balance down. I started off my college/adult years in debit and don’t want her to do the same. Thank goodness I learned my lesson and hope to steer her in the right direction. I am not against credit cards for her, just pro-financial responsibly and being educated in how to make smart choices before acquiring a card (with limits of course, both amount and parental).
My daughter’s schools have not taught her financial responsibility, but then again I feel that is something I need to teach her. Did you know “More than half of parents (57%) with kids in high school and college give schools below average or failing grades in teaching kids responsible spending, with more than one-third (35%) giving a straight out ?F?. This is compared to 37% of parents who give schools an ?A? or ?B? for teaching safe sex, according to a recent American Express Survey.”
About Save Spend:
- In an effort to arm parents with tools and tips to educate their teens about responsible spending, American Express, along with financial expert Jean Chatzky and our very own Stacy DeBroff, launched the Safe Spend program. Designed to help parents teach their kids how to “Practice Safe Spend” before heading back to school, the program offers tips to make discussing the importance of money management a little easier:
- Protect yourself from a budget blowout: There are college expenses you plan for – food on the meal plan, books – and then there’s everything else. Laundry, late night pizza and other extras add up fast. Decide how much your teen will have for these variables, tell them to track all spending, then check back in a month to see how it’s working out.
- Understand that no means no: It happens to parents, too – paying for a killer outfit or electronic gadget with a credit or charge card, only to feel the delayed sticker shock at month’s end. Before your college student arrives on campus, talk about the types of spending temptations they may experience and should avoid while at school.
- Keep your teens close, and their spending closer: A card linked to your account proves ideal for teens in emergency situations. Parents never know when their young adult might need immediate access to additional funds to get themselves out of a jam. For example, their car might break down and they need to pay for a tow. You can give your teen a charge card like the American Express Additional Card with Custom Limits, that allows you to quickly and easily raise their spending limit – granting them access to additional funds – simply by going online.
To read all of the “Practice Safe Spend” tips, please visit: financialtools.americanexpress.com.
I wrote this review while participating in a campaign by Mom Central Consulting on behalf of American Express and received a promotional item to thank me for taking the time to participate.
