Teens and Money

According to JA Worldwide (formerly known as Junior Achievement), 11 percent of teens have credit cards in their own name, and 6.2 percent of 13- and 14-year-olds have their own plastic.

With this in mind, it's important to teach teens what interest is &mdash the percentage of your purchases you pay for the privilege of borrowing money from the credit card company &mdash and how quickly it can add up and what the real debt problem will be.  

For example, a $1,000 balance on a card with an 18 percent rate will take more than seven years and cost an extra $516 to pay off if you make only minimum payments. Tell your teen he'll be 25 by then and will need some real debt help. That should hammer the message home.
And Social Security seems like a not-so-sure thing. Investing for retirement is going to be your kids' responsibility. Explain to them if they can muster $100 a month &mdash less than $25 a week &mdash and put it into a brokerage account where they earn an 8 percent return, they'll have $350,000 40 years down the road.

That's what most people can expect if they start this habit when they get their first job. But what if they start 10 years earlier and invest the same $100 a month from age 15 to age 65? That little nest egg is worth $800,000. Their mouths will drop.
Finally, it's important to point out that it's not just what you say to your kids that matter, it's the behavior you model for them on a day-to-day basis. One quarter of the teens surveyed by Schwab said their parents often lecture them about money &mdash but then don't practice what they preach.

I've always felt that the most important money lesson you can teach your kids has much more to do with good parenting than good Debt management. If your kids have the opportunity to see you dealing with the choices in your own lives &mdash if you let them in on the fact that you'd like the BMW but can only afford the Honda, so that'll have to do &mdash they'll have a much easier time dealing with the fact that they, too, can't have everything they want when they want it.

About Christian Credit One, Inc.

Christian Credit One, Inc. is a national, non-profit Christian Credit Counseling  organization dedicated to helping consumers achieve financial wellness through Christian credit counseling and education. Established in 1994, Christian Credit One has helped over two million individuals achieve financial security. Christian Credit One is one of the top members of the American Association of Debt Management Organizations (AADMO), Christian Credit One manages clients across the country. Personalized and confidential consultations are available in person, by phone or online. Visit Christian Credit One or call 888-767-9155.

Greg McTaggart, Certified Credit Counselor with 22 years experience, licensed by AFCPE, Director of Christian Credit One and is an expert in budget and Christian credit counseling.  Having the combined experience as a licensed Real-estate salesman, Mortgage Broker, Real-estate Broker, Notary, Ace Member of the Cincinnati Credit Executives, Mortgage Assistance Counselor and Spokesperson of the radio talk show &ldquoThe Money Mentor&rdquo, Greg McTaggart is a qualified Christian Credit Counselor to help you.

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