Important Things All Teens Must Learn About Debt

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Important Things All Teens Must Learn About Debt

As a teenager, you really do think money grows on trees. When the milk carton is

empty, it’s simply refilled, and the cost is not an issue. When your shoes get holes

in them, mom whips out her magic card and off you go to buy brand new ones.

Unfortunately, many teens leave home with the notion that money is always there,

and that plastic equals security and stability. What your teen may not realize is that

the money you earn needs to be balanced and managed, and that they need to work

hard to get an education and earn a paycheck.

Debt Should Not Be Taken Lightly

With credit card offers in the mail every other day, it may seem that borrowing

money is no big deal. What many teenagers learn as they gradually grow into

adulthood is that student loan payments always come due, and interest rates on

credit cards always cost you money. Those payments that seemed so far away in the

future are currently knocking at your door, and you’ve got to understand financial

responsibility in order to avoid dangerous pitfalls throughout your life. Credit and

money is not a topic that should ever be taken lightly. Even if mom and dad are well

off, your teen still needs to prove themselves in the world before they can afford to

spend money lavishly.

prepaid

You Should Always Have A Backup Plan

A savings account will help to bail you out in many situations where you didn’t

expect to need money. Emergencies like car repairs, medical bills, and home

appliance repairs can eat into your grocery fund pretty quickly if you don’t have a

backup plan. Teach your teen the importance of having a savings account, and how

to determine how much money they should put into their accounts every month.

Peace of mind can be gained from having a healthy balance in a savings account that

no purchase can provide.

Student Loans Are Not Free

If your teen decides to head to college, they may have to borrow money to pay for

school. This is a viable and safe option if it is done correctly. Many young college

students fail to realize that student loans do carry their own interest rate, and that

they must be repaid once the student graduates or stops attending school. This

website allows your teen to plan ahead for college by depositing money into a

prepaid card for students that can then be used to pay tuition in the future. Be sure

to check your prepaid card for any fees to guarantee that you are choosing the best

one for your needs.

Teaching Your Teen Valuable Life Skills

There are so many lessons you must teach your children before they leave your

home, and how to make responsible financial choices is one of the most important

things you can give to your child to help them get ahead. The financial choices

they make while under your roof will translate into how they manage money in the

future, and you must be teaching them good money management skills in order to

keep them out of debt. Although you may have to set some serious rules, they will

thank you profusely at some point in their future.

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