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.
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.